Do You Need a Cohabitation Agreement?

A cohabitation agreement (also called a living-together agreement) is a legal contract that outlines financial and property arrangements between unmarried couples who live together. While not romantic to discuss, it's a practical way to protect both partners, especially when one has relocated across the country to close the distance. This guide explains what they are, when you need one, and what to include.

What Is a Cohabitation Agreement?

A cohabitation agreement is a legally binding contract that clarifies:

• How you'll share expenses and manage finances
• Who owns what property and assets
• What happens if you break up
• How you'll handle debts
• Property division if the relationship ends
• Support obligations (in some jurisdictions)

Think of it as: A prenup for unmarried couples. It's about clarity and protection, not distrust.

Why Cohabitation Agreements Matter

Legal Reality for Unmarried Couples

Unlike married couples, unmarried cohabitants have limited legal protections:

• No automatic right to each other's property
• No guaranteed division of shared assets if you break up
• Limited ability to make medical or financial decisions for each other
• No spousal support (alimony) obligations in most states
• Complicated situations if one partner dies without a will

A cohabitation agreement creates the clarity and protection marriage would otherwise provide.

Special Relevance for Long-Distance Couples

When one partner relocates to close the distance:

• The moving partner sacrifices significantly (career, support network, home)
• Power imbalances can develop (one partner knows city, has job, has support)
• Financial stakes are higher (moving costs, potential lost income)
• If relationship ends, moving partner may have no legal recourse

An agreement acknowledges these realities and creates fairness.

When You Should Consider a Cohabitation Agreement

Strongly Recommend If:

• One partner relocated: Especially if they left career or home
• Income disparity: One person earns significantly more
• Asset disparity: One person owns home, car, significant property
• Children involved: From previous relationships
• Debt disparity: One person has significant debt; other doesn't want responsibility
• Business ownership: One or both own businesses
• Family pressure or concerns: Family wants to ensure you're protected
• Previous bad breakup: Either partner burned in past relationship
• Large joint purchases planned: Buying property, car, or major assets together

May Not Need If:

• Both partners are young with few assets
• Similar incomes and no significant property
• Short-term living arrangement (less than a year)
• Planning to marry very soon
• Both completely financially independent with clear boundaries

When in doubt: Create one anyway. It's easier to have it and not need it than need it and not have it.

What to Include in a Cohabitation Agreement

1. Property Ownership

Clarify who owns what:

Separate Property

• List property each person owns before moving in together
• Specify this property remains separate if you break up
• Include: homes, cars, furniture, savings accounts, investments

Shared Property

• Define what you'll own together
• Specify ownership percentages (50/50 or based on contribution)
• Include: jointly purchased furniture, shared accounts, jointly owned vehicles

Future Property

• How will property acquired during cohabitation be owned?
• What if one person's income buys something—is it shared or theirs?

2. Financial Arrangements

Living Expenses

• How you'll split rent/mortgage (50/50, proportional, other)
• How you'll divide utilities, groceries, household expenses
• Whether you'll have joint accounts or keep finances separate
• Who pays for what (be specific)

Large Purchases

• What dollar amount requires joint decision?
• How will jointly purchased items be divided if you break up?
• Who keeps receipts and tracks contributions?

Debt

• Each person lists their current debts
• Clarify you're not responsible for each other's pre-existing debt
• Define how you'll handle jointly incurred debt

3. Housing Arrangements

If One Partner Owns Home

• What rent (if any) does non-owner pay?
• Does non-owner contribute to mortgage? If so, do they gain ownership?
• Who pays for repairs and improvements?
• What happens if you break up? (Non-owner must leave? Timeline?)

If Renting Together

• Are both on the lease?
• What if one wants to leave before lease ends?
• Who gets to stay if you break up?
• How do you split the security deposit?

If Buying Together

• Ownership percentage based on down payment contribution
• How you'll split mortgage, property taxes, maintenance
• What happens if you break up? (Sell? One buys other out? Refinance?)
• Process for determining buyout price

4. Support and Relocation Acknowledgment

Especially important when one partner relocated:

• Acknowledgment of sacrifice: Document that Partner A relocated and left job/home
• Support during transition: Will relocating partner receive financial support during job search?
• Timeline commitment: Minimum commitment period before breaking up?
• Breakup support: Will stationary partner help with moving costs if relationship ends?
• Temporary support: Brief financial support to help relocating partner get back on feet?

Example clause: "Partner B acknowledges that Partner A relocated from [City] to [City], leaving established career and support network. In the event the relationship ends within 18 months of cohabitation, Partner B agrees to provide [financial support / moving assistance / X months notice] to Partner A."

5. Breakup Provisions

Plan for the worst while hoping for the best:

Division of Property

• How you'll divide jointly owned property
• Process for valuing shared items
• Who gets first choice on disputed items?
• Mediation process if you can't agree

Housing After Breakup

• Who moves out? Or do both move?
• What notice period is required?
• Who's responsible for rent during transition?

Pets

• Who keeps pets if you break up?
• Shared custody arrangements?
• Who pays vet bills and ongoing care?

6. Review and Modification

• How often you'll review the agreement (annually recommended)
• Process for modifying terms (both must agree in writing)
• What triggers automatic review (job change, major purchase, etc.)

7. Other Important Provisions

• Medical decisions: Can you make medical decisions for each other?
• Estate planning: Do you leave each other anything if one dies?
• Insurance beneficiaries: Who's designated on life insurance, etc.?
• Dispute resolution: Mediation before litigation if you disagree

Sample Cohabitation Agreement Outline

How to Create a Cohabitation Agreement

Step 1: Discuss Whether You Need One

Approach the conversation carefully:

Good framing: "I've been reading about cohabitation agreements, and I think it could be helpful for us to have clarity on finances and property. It's not about not trusting you—it's about protecting both of us and making sure we're on the same page. What do you think?"

Avoid: Springing it on them or framing it as distrust.

Step 2: DIY or Hire Attorney?

DIY (using templates) works if:

• Your situation is straightforward
• No significant assets or property
• Both partners agree on all terms
• Limited budget for legal fees

Hire attorney if:

• Complex finances or significant assets
• One partner owns property
• Children involved
• Business ownership
• Disputes about terms
• You want maximum legal protection

Cost: Attorney-drafted agreements typically cost $500-$2,000 depending on complexity.

Step 3: Full Financial Disclosure

Both partners must disclose:

• Income and employment
• Assets (bank accounts, investments, property)
• Debts (student loans, credit cards, car loans)
• Credit scores (relevant for joint purchases)

Lack of transparency can invalidate the agreement.

Step 4: Draft the Agreement

• Use template or work with attorney
• Be specific and detailed
• Address all scenarios you can think of
• Use clear language (avoid ambiguity)

Step 5: Review Together

• Read through entire agreement together
• Discuss any concerns or changes
• Make sure both fully understand and agree
• Consider having separate attorneys review (especially if complex)

Step 6: Sign and Notarize

• Both partners sign agreement
• Get it notarized for added legal weight
• Each partner keeps a copy
• Store in safe place

Step 7: Review Regularly

• Review annually or when circumstances change
• Update as needed (new job, major purchase, etc.)
• Document all modifications in writing

Common Concerns and Objections

"Doesn't this mean you don't trust me?"

Response: "It's not about trust—it's about clarity. We both have different ideas about what's fair, and this ensures we're on the same page. It protects both of us and prevents misunderstandings."

"This isn't romantic."

Response: "You know what's really unromantic? Fighting about money and who owns what if we break up. This lets us focus on our relationship without worrying about the practical stuff."

"If we're planning to stay together forever, why do we need this?"

Response: "I hope we do stay together forever. But 50% of relationships end, and I want both of us protected if that happens. People get married planning to stay together forever, and they still sign marriage certificates with legal protections."

"This makes it seem like we're planning to break up."

Response: "We're not planning to break up—we're planning for every scenario responsibly. Just like we have insurance we hope we'll never use."

Legal Enforceability

Cohabitation agreements are legally binding in most U.S. states and countries if:

• Both parties entered willingly (no coercion)
• Full financial disclosure was made
• Terms are reasonable and fair
• It's in writing and signed by both parties
• It doesn't violate public policy

What courts generally won't enforce:

• Provisions related to child custody (courts decide based on best interest of child)
• Unconscionable or extremely one-sided terms
• Terms encouraging divorce or separation

Note: Laws vary by state/country. Consult local attorney for specific guidance.

Alternatives and Additions

If You're Not Ready for Full Agreement

Consider lighter alternatives:

• Financial MOU: Memorandum of Understanding outlining financial arrangements (less formal)
• Expense tracking: Joint spreadsheet documenting contributions
• Relationship contract: Non-legal document clarifying expectations

Additional Legal Documents to Consider

• Power of Attorney: Allows partner to make decisions if you're incapacitated
• Healthcare Proxy: Designates partner to make medical decisions
• Wills: Ensure partner inherits if you die (not automatic for unmarried couples)
• Beneficiary designations: Name partner on life insurance, retirement accounts

When to Update Your Agreement

Review and potentially update when:

• One partner's income significantly changes
• You buy property together
• You have or adopt children
• One partner receives inheritance or large gift
• You start a business together
• You move to a new state (laws differ)
• Your relationship changes (engagement, marriage plans)

Final Thoughts

A cohabitation agreement isn't a sign of distrust or pessimism—it's a sign of maturity and mutual respect. It acknowledges that you're building a life together while also protecting both partners if things don't work out as planned.

For couples where one partner relocated to close the distance, it's especially valuable. It acknowledges the sacrifice made and ensures fairness if the relationship ends. It's a way of saying: "I recognize what you've given up, and I want to make sure you're protected."

Yes, it's awkward to discuss. Yes, it feels unromantic. But so is fighting about money, property, and who owns what when emotions are high and the relationship is ending. Handle the practical stuff now so you can focus on building your life together without worry.

Think of it as relationship insurance: you hope you never need it, but you're glad it's there if you do.

Ready to prepare for living together? Check out our guides on setting clear expectations, what to expect when cohabitating, and budgeting for your move.