Cohabitation is increasingly common as couples choose to live together for longer periods of time before they wed or go their separate ways. A cohabitation agreement allows the parties involved to specify how expenses are to be handled and how certain property or assets are to be acquired or divided.
In this way, a cohabitation agreement can define the effects of commingling of finances and personal assets, which makes things easier should the parties decide to separate. In this regard, however, it is important to keep in mind that cohabitation agreements are intended for people who do not plan on getting married. A cohabitation agreement does not automatically convert to a prenuptial agreement should the parties later decide to marry.
If you are planning on living with someone or are currently cohabiting and want to protect your interests and rights, contact the family law attorneys at Hogan Omidi, PC. We have offices in Cherry Creek and Aspen.
Why Is A Cohabitation Agreement Important?
When couples marry, most assets or property acquired over the course of their marriage will be defined as marital property by statute. In the event of a divorce, both spouses are entitled to an equitable share of that accumulated wealth. Both spouses are also responsible for debts incurred.
Unmarried couples are not similarly protected, no matter how long you have lived together. As a result, if you and the person you live with jointly purchase furniture, electronics, or even a car or a pet, there is no predictable legal way to determine how property is divided if you later separate. A cohabitation agreement lays out a roadmap for determining who gets what should you eventually separate and/or spells out how debts and living expenses are paid while you are together. For instance, you can specify who gets specific items or you can create a buyout clause that requires one party to reimburse the other for any items he or she wants to keep. For couples who choose not to marry, these agreements may be a way to formalize your claims and expectations.
What Happens If We Decide To Get Married?
If you decide to get married, a cohabitation agreement can be used as a template for a prenuptial agreement. While a cohabitation agreement does not automatically merge into a prenuptial, many of the same issues and concerns can be addressed by referencing what your cohabitation agreement set in place. If you already have a cohabitation agreement and would like more information about how similar terms can be included in a “prenup,” our attorneys can review your current agreement and advise you as to what is in your best interest.