If you can’t marry in the state you live in – or if you do not want to marry – domestic partner/cohabitation agreements (the terms are interchangeable) can help you make a plan for your partnership.
In broad terms, these agreements address the sharing of assets and expenses, and can document for a court and any other interested parties (i.e. an employer from which you wish to obtain domestic partner benefits) the “family nature” of the cohabiting parties’ relationship and living arrangements. Specifically, these agreements may define the partners’ financial obligations to one another and to their children, clarify the ownership of major assets such as real or personal property, and protect the partners’ rights should they ever terminate their relationship.
In the unfortunate event of a separation, a domestic partnership agreement can save the parties the time and expense of litigating their rights and obligations, particularly with respect to property. Clients who contact us after deciding to terminate their partnership most often find parting less stressful if there already is a signed agreement that states the partners’ wishes.
In the next three posts, we’ll cover three broad categories of issues Domestic Partner/ Cohabitation Agreements can help address – finances & property, family, and potential separation.
Finances & Property
If you are living with someone, domestic partner/cohabitation agreements can outline what you and your partner will each contribute to living expenses, mortgage, utilities, entertainment, real estate taxes, homeowners or renters insurance and other items relating to your place of residence or any other shared property.
Questions to Consider
- Do you have – or will you open – joint banking or checking accounts, joint credit cards, or investment accounts? You might want a joint account for only household purchases and separate accounts for credit card purchases or paying for personal items. If you have or want joint accounts of any kind, you may want to have both signatures for any withdrawals over a certain amount. If you and your partner decide to separate, how will you split the accounts?
- How is your home titled?
- If the home you live in is titled in one partner’s name:
- Did the non-owner partner contribute money to the purchase of the home?
- Does the non-owner pay any amounts to the mortgage for the property you are living in? What about for improvements on the home?
- Do these payments give the non-owner partner any ownership interests in the home?
- If the home or other real property is owned jointly,
- Did each partner share the down payment and settlement costs equally and/or share the mortgage payments equally?
- If you sell the home, how will the equity be distributed? Will it be in proportion to the amount paid on the home by each, equally, or some other way? How do you determine the value of the house? How soon does it have to go on the market?
- If you separate, who will have the right of first refusal to purchase the home? In what amount of time?
- If one partner moves out, will that partner have to continue to contribute to the mortgage, utilities, etc.?
- Is there property in the home that you brought into the household? Do you want the property to remain yours after a termination? This “separate property” could include family heirlooms or inherited property or property that just has sentimental value to you. Most couples have such property and agree that it belongs to the original owner.
Please check back for more information on Families and Potential Separations.