A cohabitation agreement is a way for an unmarried couple to spell out their rights and obligations when it comes to financial and other commitments. It’s similar to a prenuptial agreement, except the parties do not get married. In the past, New Jersey allowed for spoken palimony commitments to be enforceable, but now it needs to be in a signed writing with mandatory attorney review.

Relationships are emotion-based. If the relationship becomes serious, commitments need to be based on more than emotion. There needs to be a sensible approach to living together, with each party protecting their interests. Many marriages and couples living together split up over financial disputes. Creating a cohabitation agreement forces the couple to confront issues that few of us like to talk about: money, wealth, debts, and how they should be divided if something bad happens, like the parties break up or one of them dies.

Unmarried parties can create agreements that also cover child custody and support, but the agreement, if challenged in a legal action, would need to withstand review by a judge. Normally, child support payments are in line with state guidelines and child custody issues are based on what is in the best interests of the child.

It makes sense for both parties to discuss their financial commitments to each other, because the risk of separation is high. Like marriages, one party may forego a job or a career and earn no or a reduced income to care for a child — in the hopes of financial support from the other partner after the child is grown.

Unfortunately, financial rights are not built into the parties’ informal partnership.  Marital rights simply do not attach to unmarried partners.

If the two break up, a stay at home parent or a lesser earning one, without a written agreement, wouldn’t be entitled to support. If the couple is the child’s parents, the non-custodial parent would need to pay child support until the age of 18 to 23, depending upon college attendance. Part of the agreement should also involve estate plans and life insurance coverage — so if one party dies unexpectedly, the survivor will get some financial support. Parties should not simply rely on the other party’s promise to make them the beneficiary of a will or life insurance policy. Get it in writing, signed and notarized, including enforcement provisions in case one of you “forgets” about the agreement when times change.

If you are serious about a relationship and think it may last,

• Talk to your partner before living together — and don’t make assumptions about finances.
• If you are bringing funds and assets into the relationship or if you will be devoting time and labor to raising a child, create a parenting and financial agreement.
• Talk to an attorney about a cohabitation agreement and what it should cover. There may be tax issues, so speaking with an accountant could be a good idea. Estate and inheritance laws are well established when the couple is married, not so much when the couple just lives together. It’s best to address these issues while the parties are healthy and actively engaged in the relationship, not put pieces together after a relationship fails or one dies unexpectedly.
• Create a complete and accurate list of your assets, finances, and debts. The agreement should accurately voice the parties’ intentions in detail and be written to avoid ambiguities that could cause a future dispute.

If you plan on living together, or are already doing so, and want to discuss how a cohabitation agreement could work for you, call the Central Jersey law offices of Hanan M. Isaacs, P.C., at 609-683-7400, or contact us online, for a near-term reduced fee initial consultation.  We can discuss your situation, how the law may apply to you, and advise you about your best options to protect your legal rights and interests.  Call now.  You will be glad you did.