In our modern society, a cohabitation agreement is becoming more and more popular nowadays. Especially among the young generation, it is widely common to go for a cohabitation agreement. Basically, it refers to an agreement where a couple chooses to live together before their marriage.
There are plenty of reasons behind living together before marriage. A cohabitation agreement helps a couple in their financial hardship, ownership, and even in child support. But this kind of agreement is completely different from a civil partnership or marriage partnership.
So, in this article, we are going to explore everything about cohabitation agreements in detail. Keep reading the entire article to explore more.
Definition of Cohabitation Agreement
In simple words, this term refers to an agreement where two or more adult people decided to live together as a couple before any marriage contract. But cohabitation agreement also deals with certain rights and responsibilities between both parties. When a couple intends to live together, they have to go through some financial arrangements. And this will also fall under the cohabitation agreement.
Each and every cohabitation agreement is not the same. Different situations and circumstances can make the agreement slightly different. It also depends on the basic needs and the standard of living of a couple. When a couple is agreed upon such an agreement, it records all the important facts about the ownership of properties. It also has some arrangement coverage, such as child support, shared debts, household cost, etc.
Advantages of a cohabitation agreement
There are so many advantages and benefits of a cohabitation agreement. When you are in a breakdown of a relationship or planning to minimize your living cost, then a cohabitation agreement can be a very good option for you. It can give you financial supports and also some peace of mind. Below are given some advantages of the cohabitation-agreement,
- This agreement helps to records all the legal rights and ownership of a couple in their property. It also reduces the litigation costs and ownership disputes among the couple.
- This agreement will also help to get the flexibility in the financial arrangement for a couple.
- After a divorce or breakdown of a relationship, a cohabitation agreement can help both of you in financial hardship when a couple struggles with their financial stage.
- Cohabitation-agreement plays a very useful role in household costs, child support, or even other daily costs. It works as a safeguard for your financial security. It will also make sure the rights of your children in the future.
Cohabitation Agreement vs. Marriage or Civil Partnership
Generally speaking, marriage or civil partnership is a far stronger partnership and legal rights than a cohabitation agreement. Because in a civil partnership, a couple has an equal share in their joint property. Whereas the cohabitation agreement does not have this option to share the joint assets.
Also, when a couple is married. It will fall under the family law. And if a marriage breaks down or a couple wants to get separated, then the law will provide financial or spousal support. So it can be said that civil partnership is more protective and secured than the cohabitation agreement.
So in some cases, a cohabitation agreement is a better option. And also, for certain situations, marriage or civil partnership is better. Therefore, it can be an endless debate. Nonetheless, a couple will decide which one they should go for. Both have some good and also downsides. So, the circumstances or situation of a couple will guide them on what you should go for.
Coverage of the cohabitation-agreement
The best part of a cohabitation agreement is that a couple has some option to choose what exactly they want in their cohabitation agreement. And they have to choose it during the process of the agreement. But there are some fundamental factors that will always come in your cohabitation agreement. There are given in the following:
If you live in your own home, then after the breakup, the other partner has no right to live in that home. If the other partner pays for your home maintenance costs and mortgage, then again, according to the law, they have no right to stay in your home after the separation.
In some cases, there are some exceptions. If both of you are agreed on property ownership during the cohabitation agreement, then the other partner will have the legal right to access your property. Also, you can share your property with your partner.
And the legal rights from your shared property may change over time when you want to contribute to the maintenance cost in order to access the property. You also need to make sure that you have legal rights to access that property in the future. You have to keep certain factors in your mind. They are;
- Property ownership for the parent who will look after the child (i.e., custodial parent)
- If one of your dies or injured, then who will get the ownership of that property.
- If any of you finds them in financial hardship, then how are they going to contribute to the mortgage.
- How will the shared loan or shared property be divided after the separation?
Hold the ownership
Suppose you live in your own home with your partner. Then it is always better to hold your homeownership as a tenant in common. This is a very good option that will give you the flexibility and the proper legal right to hold your own. So, if you and your partner separate, then you can easily access your owned home.
In some cases, you already make a cohabitation agreement regarding your property right. Then again, it is a good idea to hold your property ownership as a tenant in common. This will not only help in the flexibility to leave your ownership but also there are so many advantages of the tenant in common.
In some cases, some property division is quite easy. For example, bank saving or physical money. But some possessions are really hard to divide. Such as, if you possess any inherited furniture before your marriage, then it will be a bit hard to divide that property after the separation.
Not only these, if you guys have any insurance policy or pensions, then after the separation, but it is also quite complex to divide those assets. That is why, if you guys have a cohabitation agreement before living together, then it will be easier for both of you to get your wealth.
This is one of the best parts of a cohabitation agreement. Even if a couple is not married, then again, they have to bear some monthly maintenance costs. Both of you guys decide who will pay the monthly maintenance costs if you guys live together.
And this process by the cohabitation agreement is much easier than any civil partnership. But it is always recommended to split up the payment between you and your partner so that it can be easier and safer for both of you guys in any circumstances.
Perhaps, you guys do not have any children now, and it doesn’t mean that you guys will not have a child in the future. That is why the cohabitation agreement also covers child support. If a couple is not married, then the biological mother will get the primary child support or all the custodial rights.
When the child grows up, then that child’s best interest, educational expenses, and other expenses will be concerned. In such a situation, both parents need to contribute to that child’s support depending on their financial stability and income.
A cohabitation agreement also covers all the benefits of insurance settlement. Especially, when one partner is severely injured or dead in an accident, then the insurance company will most likely provide compensation for the loss. But when a couple is not married or is not in any civil partnership.
Then it is quite hard for them to prove that they were living together. That is why a cohabitation agreement makes it so easy. Even if you guys have any shared business, then under the cohabitation agreement, your insurance company will also provide a settlement for any losses.
Cost of cohabitation-agreement
The cost of a cohabitation agreement will completely depend on a couple. Typically, the cost will depend on how they want to live, how do they want to pay their maintenance costs, some legal process, and so on. The overall costs for a cohabitation agreement can be somewhere between $700- $2000.
Additionally, a cohabitation agreement is much more cost-efficient than a civil partnership. But there is some exception too. In some cases, the costs for a cohabitation agreement can be more than a normal civil relationship. And it will completely depend on how a couple wants to live their life together.
The bottom line
Whenever a couple wants to go for the cohabitation agreement, they need to follow certain legal processes and rules in order to make it done. But sometimes, it may seem difficult for some people, especially for people who haven’t dealt with such a situation before.
That is why it is highly recommended to seek help from a professional lawyer. If you are stuck in any step or need any additional assistance, then a lawyer can help you in this regard. Hopefully, this writing helped you to understand everything about the cohabitation agreement in detail.