This is a growing legal concern because many more couples now live together
without marrying. Some want to test their relationship. Older folks may
live together because marriage would disqualify them from social security
or pensions. Others want to avoid responsibility for the care of an ill
partner or the many other legal and financial complications that arise
from marriage. These concerns become particularly acute when one party
has substantially more wealth.
Cohabitating couples should have a cohabitation agreement to define the
couple’s rights to property. The agreement designates each party’s
separate property before cohabitation and provides for the distribution
of assets acquired both jointly and singly during cohabitation. The cohabitation
agreement may also resolve the responsibility for joint obligations, such
as leases, utilities or insurance. Several palimony cases demonstrate
that cohabitation agreements are as vital for cohabitating same-sex couples
as for heterosexual couples.
Cohabitation agreements are also vital if one partner is considerably wealthier.
This avoids the poorer partner’s claim that the cohabitation was
for personal care and services on the promise of compensation. A cohabitation
agreement precisely defines the nature and purpose of the relationship
and whether it involves compensation for services.