Cohabitation Property Rights for Unmarried Couples

When unmarried couples live together for a while, they accumulate a good amount of property. But what happens to that property when they break up? The legal rights of unmarried couples are not the same legal rights and protections given to married couples.

Divorce laws cover how to divide property acquired by a married couple should the marriage end. There are no such laws for unmarried couples who jointly own property. Before you begin living with a significant other and buying property together, you may want to look into a property agreement or cohabitation agreement.

The laws governing property, inheritance, and family are different in every state. This page provides an overview of cohabitation property rights but you should talk to a family lawyer in your state for legal advice.

Cohabitation Property Agreements

A cohabitation property agreement is a legally binding contract that spells out who owns what and how to distribute the property if the couple separates. This is especially important if a couple acquires real estate together. This kind of agreement is similar to a prenuptial agreement that parties who get married sign before they legally marry.

Each agreement determines how to divide the property a couple acquires during the relationship should the relationship end. You may still end up going to court to enforce a cohabitation agreement, but it can reduce the time spent litigating and defending your property law rights.

A cohabitation property agreement should address the specific needs of the relationship between you and your partner. Most agreements address the following:

• How are specific assets owned?
• How are income and expenses, including mortgage payments, shared?
• How will newly acquired property and assets be owned?
• Who will manage bank accounts, credit cards, tax payments, and insurance policies?
• How to divide assets in the event of a separation?
• What will be the process (courts, mediation) for resolving disputes?

Including Your House in a Cohabitation Property Agreement

Buying a house is a huge financial responsibility, and when jointly purchasing a home with a romantic partner, there are added complications. Include the purchase of your home in your cohabitation property agreement to avoid unpleasant surprises down the road.

To ensure you do not cut yourself out of your real property rights, consider the following elements in your cohabitation agreement:

• How to list ownership on the property deed: If you own the house as joint tenants with the right of survivorship, after one owner dies, the other automatically takes ownership of the house. If you own the house as tenants in common, when your partner dies, their share of the property gets passed to their beneficiaries or relatives according to intestate laws. These are important distinctions because if one of you passes away, the deed to the house controls who owns the house as it is not included in probate.
• Buyout rights: If there are buyout rights, how will the house be valued? The couple can provide a basis for appraisal, such as an appraisal by their realtor. The parties will also have to decide how much time to allow for the full buyout payment.
• What happens to the house in a break-up: Decide if the house will be sold and how to divide equity or if one of you is going to buy out the other and keep the house if you separate. You should also decide how long the partner keeping the house has to refinance (if you’re both on the mortgage).
• Eviction: In most states, if someone has been living with you for a certain number of months, they have a legal right to live there, even if they aren’t on the lease or deed. In such a case, you have to go through a formal eviction to remove the person from the premises. You will have to go to your local courthouse to file a Complaint for Eviction or something similar.

Support Payments

Many people use the term “palimony” to refer to financial support paid to an ex-partner when the couple was never married. Palimony is not a legal term and carries no legal significance. Members of unmarried couples have no right to support unless the two have previously agreed on it.

To avoid disputes about palimony, it is in the couple’s best interest to include whether or not to pay support in a written agreement. For example, in California, the courts have found that an ex-partner can sue for support if they can show that even an implied contract existed.

Including Income in a Cohabitation Property Agreement

Separate property could change by circumstances or by one of the partners claiming that there was an agreement to something when there was not. This becomes even more important when one of the partners makes significantly more money and supports the other partner.

Consider the following example. Unmarried partners, Pat and Sam, decide to move in together. Pat is a successful surgeon and Sam is unemployed. They use Pat’s income to purchase a home that Sam will fix up. To protect their individual property rights in case they break up, they decide to enter into a written cohabitation property agreement.

In the agreement, they decide that after Sam completes the home improvements, they will become joint tenants with the right of survivorship. They also agree that they equally own all furniture and fixtures in the home. Their agreement explains that if the couple breaks up, Sam would remain in the house to care for their child and Sam will compensate Pat for Pat’s portion within five years. Aside from this house payment, the couple will not exchange support or other payments.

Liability for Debts

In most cases, partners who are not married are not held responsible for the debts of their partner. However, if the couple has a joint account or acts as a co-signer, they may be liable for debts or nonpayment. In some states, registered domestic partners can be liable for debts involving basic living needs, like food, clothing, and shelter.

Surviving Partner Property Rights

A surviving cohabiting partner generally has no property rights to the deceased person’s individual property if the deceased partner dies intestate. Intestate means that they pass away without a will. If the couple owns real estate as joint tenants with rights of survivorship, the surviving partner will inherit the deceased partner’s half.

State laws recognizing domestic partnerships may include the rights of domestic partners to inherit intestate, much like a spouse would inherit intestate upon the death of the other spouse. However, the best way to provide for the surviving partner is by leaving a will or living trust.

Property ownership is an important topic to discuss with your significant other before you cohabitate. It can cause costly legal issues if the relationship ends if you don’t have these discussions, and reach written agreements. It’s best to speak with a family law attorney for more information about what legal rights a cohabitation agreement can give you and your partner.