LEGAL ALLIES, TRUSTED PARTNERS

Why do you need a Nonmarital Cohabitation Agreement?

Amidst the housing crisis, the nation is seeing a surging number of adults living with a non-spouse romantic partner.[1] Although this new norm has proven to be very practical particularly in the Bay Area, it is equally as important for those partners to establish a Nonmarital Cohabitation Agreement.

Understanding the basic fundamentals of this agreement will ensure you do not miss any critical components to protect you financially.

What can a Nonmarital Cohabitation Agreement cover?

Even though California does not recognize Common Law Marriages, cohabiting with a non-spouse partner can inadvertently create shared property interests. A cohabitation agreement allows you to clarify ownership interests in your current and future assets and clarify expectations for support in the event the relationship is terminated, whether by separation or death.

A cohabitation agreement should clarify the parties’ assets including those acquired (1) before the relationship, (2) during the relationship or (3) by gift or inheritance. Couples typically include the following key points in their contracts:

  • Distribution of property in case of death or breakup;
  • Financial support during the relationship or after;
  • Payment of debts from before and during the relationship;
  • Division of the principal residence upon death of one partners or breakup;
  • Creation of a joint tenants with rights of survivorship, allowing the other partner to own the shared home if the other dies or adding both partners’ names to the deed;
  • Decide on support, custody, or visitation rights for minor children, although the court can disagree with this and decide differently based on what’s in the best interests of the children;
  • Determination of health care insurance responsibility; and
  • Creation of advanced health care directives or health power of attorneysto allow both partners to make decisions about the other’s health care in case of incapacity

Cohabitation agreements cannot, however, include personal conduct provisions.

What makes a Nonmarital Cohabitation Agreement vulnerable?

The legal requirements for valid cohabitation agreements tend to parallel the requirements of other contracts, because they’re essentially just another type of contract. There must be consideration, knowledge of the terms by both parties, and it must be in writing. Consideration is an exchange of value between both agreeing parties. For example, one partner can agree to pay all rent expenses in exchange for the other partner to take care of all home maintenance, such as cooking or cleaning. With that being said, couples cannot use sexual favors as consideration.[2]

In addition, failure to include a well-drafted severability clause can leave your agreement open to unenforceability in its entirety if a section of the agreement is found to be invalid.

For a comprehensive overview of California law governing cohabitation agreements, see Contracting for Cohabitation: Adapting the California Statutory Marital Contract to Life Partnership Agreements Between Lesbian, Gay or Unmarried Heterosexual Couples, https://digitalcommons.law.ggu.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1603&context=ggulrev

[1] https://www.census.gov/library/stories/2018/11/cohabitaiton-is-up-marriage-is-down-for-young-adults.html.

[2] Marvin v. Marvin, 557 P.2d 106, 113 (Cal. 1976).