Cohabitation Agreement

A cohabitation agreement is a written contract entered into by two people who live together and are not married, defining the financial and property arrangements between them and, in many cases, what happens if the relationship ends. It typically covers ownership of assets each partner brought in and of assets acquired together, how ongoing household expenses are shared, whether one partner will support the other during or after cohabitation, and how any joint debts will be handled. It is a contract, not a marital instrument, and it operates under general contract law rather than family law.

The gap the agreement fills is real and one-sided. Marriage is unusual in American law as a status that automatically confers a broad set of legal and financial protections. Federal law recognises spouses for tax filing, unlimited transfers during life and at death, retirement-account rollovers, Social Security spousal and survivor benefits, Medicare and Medicaid spouse protections, and FMLA leave. State law confers intestate inheritance rights, elective share, homestead protections, and the presumption that assets acquired during a marriage belong to both partners. None of these attach to an unmarried couple by default, and no document short of getting married gives them all.

The document can settle what is between the two partners privately. A well-drafted agreement specifies which property each partner brought into the relationship and remains individually owned; what happens to property jointly acquired (a shared car, joint furniture, joint bank accounts); how ongoing expenses are shared — pro rata by income, evenly, or by fixed dollar amounts; whether one partner will make support payments to the other during or after the relationship; how joint debts are handled if the relationship ends; and how future disputes will be resolved (mediation, arbitration, ordinary litigation). Most states enforce a written cohabitation agreement on general contract principles, provided the consideration is not sex itself (a limitation from the 1976 California case Marvin v. Marvin, still the leading precedent).

What the document cannot do is confer a status. It cannot create intestate inheritance rights: if one partner dies without a will, the survivor is generally not an heir under state law however long the couple lived together. It cannot make a partner a spouse for Social Security, Medicare, or federal tax purposes. It cannot make an unmarried partner an automatic beneficiary of the other's retirement account — those beneficiaries are set by contract, not by relationship. So the agreement is only part of the answer. The other part is the estate paperwork that a married couple gets by operation of law and an unmarried couple must build one document at a time.

An effective cohabitation agreement is drafted with each partner represented by their own attorney, or at minimum with each partner advised by an attorney they choose. Full financial disclosure at the outset — accounts, debts, and income for both partners — makes the agreement much harder to challenge later on the ground that one partner did not know what they were signing. The agreement is signed and, in most states, notarised. It generally addresses property already owned and property acquired together, how expenses will be split, what happens to jointly titled property if the relationship ends, and any post-separation support.

A hypothetical example. Priya, an emergency-room physician, and Ben, a freelance illustrator, decide to buy a house together after five years of dating. Priya has $180,000 in savings and $170,000 of student loan debt; Ben has $22,000 in savings and no debt. They put $150,000 down on a $600,000 house — $120,000 from Priya's savings and $30,000 from Ben's — and take a joint mortgage. Their agreement records that Priya's down payment is her separate property and returns to her first on any sale, that the remaining equity is split by their proportional contributions to the mortgage over time, that each will keep their own retirement accounts, and that if they part they will list the house within 90 days. Six years later they marry; a short addendum decides whether the agreement continues, expires, or converts into a post-marital arrangement.

Pros

• Creates certainty about property and expenses in a relationship the law does not recognise, so a separation or a death does not turn on what either partner remembers or wants to concede.
• Protects a partner who is financially exposed by the relationship — who moved for the other's job, took on caregiving, or contributed to a jointly used but singly titled asset.
• Complements the estate documents. A cohabitation agreement fixes property between the partners; the will, powers of attorney and beneficiary designations decide what happens at death or incapacity.
• Encourages full financial disclosure, and the conversation the drafting requires is often more valuable than the document itself.

Cons

• Cannot create rights that only marriage confers — federal tax filing, Social Security spousal or survivor benefits, unlimited spousal transfers, automatic health-insurance eligibility, intestate inheritance.
• Enforceability varies by state. A few states limit how far the agreement can reach on separation, and the sex-as-consideration limitation from Marvin still governs everywhere.
• Modifications and additions need to be executed as carefully as the original. An informal side agreement is a common source of dispute.
• Not a substitute for the estate paperwork. On its own, a cohabitation agreement does not put a partner in a will, on a beneficiary form, or on a healthcare directive.