You and your partner are planning to move in together soon. It's crossed your mind that setting up a cohabitation agreement might be a good idea, considering some substantial assets are involved. It's smart to give this option some thought. Consider the reasons that a cohabitation agreement is important.
Detailing Ongoing Financial Obligations
The two of you may find it beneficial to set up a legal agreement as to your financial obligations while cohabitating. This might cover who is responsible for the mortgage payment, utilities and other living expenses, or how much each of you will share in the payment percentage.
Setting up Power of Attorney and a Will
Having power of attorney and a will in place protects you both from interfering family members in case one of you becomes incapacitated or passes away.
Having Financial Protection After a Breakup
Marriage and civil unions provide for some type of equal division of assets if the couple breaks up, depending on the state in which you live. If you split up after cohabitating, you may be subject to the whims of a jury in regard to division of assets. If your name is not on the real estate title, for example, you could lose any claim to your fair share, even if you've been contributing to the mortgage and living expenses all along.
Addressing Other Relationship Factors
A cohabitation agreement may also detail aspects of a relationship that aren't exactly financial in nature. Both of you may want to set up a legal arrangement that addresses who keeps the pets if you break up, for instance.
Realizing That Juries Are Unpredictable
It's probably impossible to imagine that you and your partner could ever have such an acrimonious breakup that he or she might sue you. However, this type of situation does happen when people split up after living together.
For example, if you paid for the bulk of the bills, and especially if the two of you agreed you would be the only one working, a jury might find that you should make support payments. They might believe that your living arrangement led to your ex not having a good job or any way of bringing in enough income for essential needs such as rent, food and utilities.
Your ex may have plenty of witnesses to provide testimony about your casual agreement.
What Can You Do Now?
Talk with your partner about setting up a cohabitation agreement. Stress the importance of this for your partner as well as for yourself so you don't meet with resistance. Go to sites like this to contact a family law attorney for further information on how to begin.