Living Together and Property Agreements

When couples get married, they enter a contractual relationship that commits them to an established set of laws and rules governing their rights and responsibilities toward each other. Among other things, those laws establish their property rights when they get divorced. But when unmarried couples move in together, they don't automatically agree to any state-imposed contractual relationship, and they don't gain any legal rights to each other's property or responsibilities toward each other. That can create problems if they split up—and sometimes even while they're still together—particularly when they've lived together a long time and merged at least some of their finances.

One way to prevent those problems is to create a cohabitation property agreement. But before you do that, you should understand the basic legal requirements for these agreements, who needs them, and what they should cover.

What's a Cohabitation Contract?

A cohabitation agreement is type of contract between two people who are living together as unmarried partners. Like any other contract, it's basically an agreement to do (or not do) certain things in return for some benefit—what's known in legalese as "consideration." A valid contract must include consideration. Otherwise, it's essentially a promise to provide a gift—and, as such, courts won't enforce it.

Cohabitation contracts are a way for unmarried couples to spell how they've agreed to handle their property and finances during their relationship and in the event that they part ways.

As long as you have a cohabitation agreement that meets the legal requirements in your state (more on that below), you may ask the court to enforce the contract if your ex refuses to do what they've agreed to do.

Are Cohabitation Property Agreements Legal?

Until the 1970s, courts generally refused to enforce contracts that were based on relationships between unmarried couples, because they assumed that the consideration for the contract—such as the benefit that a higher-earning partner received for sharing property with the lower-earning partner—was sex. That meant courts saw these contracts as akin to paying for sex—which is illegal.

That started to change with the famous Marvin case, in which the California Supreme Court held that unmarried couples may enter into enforceable contracts with each other about their earnings and property rights, as long as "sexual services" aren't the consideration for those agreements. (Marvin v. Marvin, 557 P.2d 106 (Cal. 1976). Although the Marvin case applied only in California, courts in almost all other states eventually followed this basic principle—albeit with some variations on the specific requirements for a valid, enforceable cohabitation agreement.

Requirements for a Legal Cohabitation Agreement

The legal rules for cohabitation agreements have mostly developed through court decisions rather than laws. Although almost all states recognize these agreements to some degree, courts in different states have taken varying approaches to what are popularly known as "palimony" agreements. For example:

• Some courts will enforce cohabitation agreements as long as sex isn't explicitly a consideration under the contract—in other words, as long as the agreement doesn't state that the couple's sexual relationship is among the benefits that a partner receives in return for giving up some property rights. For instance, one partner might agree to provide homemaking services and companionship as consideration for the couple's agreement to pool their resources and share property acquired during their relationship.
• However, even when a cohabitation contract mentions considerations like homemaking and cooking, a court will probably not enforce it if sexual services are an inseparable part of the consideration—meaning the agreement actually rests on the couple's sexual relationship. (Jones v. Daly, 122 Cal.App.3d 500 (Cal. Ct. App. 1981).) And some courts will look askance at any agreements that mention love or affection as part of the consideration for the contract.
• A few states, such as Texas, require that any cohabitation agreement must be in writing and signed. (Tex. Bus. & Com. Code § 26.01 (2023).) But the courts in most states will recognize at least some oral agreements—or even, rarely, might find an "implied" agreement based on a couple's actions (more on these issues below).

Warning: Cohabitation Agreements Still Aren't Legal in Some States

In a few states, the courts hold fast to the older view that cohabitation agreements aren't legal. For instance:

• Because courts in Georgia and Louisiana continue to view sexual relationships between unmarried adults as "immoral," they won't recognize these couple's agreements. (Abrams v. Massell, 586 S.E.2d 435 (Ga. Ct. App. 2003); Ga. Code § 13-8-1 (2023); Schwegmann v. Schwegmann, 441 So.2d 316 (La. Ct. App. 1983).) This is true even when a couple's cohabitation agreement explicitly states that it's based on a partner's services as a caregiver. (In re Succession of Rhodes, 918 So.2d 626 (La. Ct. App. 2005).)
• The situation in Illinois is only a bit more nuanced. The Illinois Supreme court has held that cohabitation agreements couldn't be enforced because they violate the state's public policy—specifically, the fact common law marriage isn't legal in Illinois. However, courts in that state might enforce some contracts between unmarried individuals if they're independent of the couple's marriage-like relationship. (Blumenthal v. Brewer, 69 N.E.3d 834 (Ill. 2016); 750 Ill. Comp. Stat. 5/214 (2023); Spafford v. Coats, 455 N.E.2d 241 (Ill. Ct. App. 1983).) So, for instance, couples might be able to have a valid contract to share ownership of certain property as long as their agreement states that it has nothing to do with their personal relationship.

It remains to be seen whether courts in these states will change their views on this issue. In the meantime, you should speak with a local lawyer if you live in Illinois, Georgia, or Louisiana, and you're hoping to create a cohabitation agreement that would hold up in court.

Who Needs a Cohabitation Property Agreement?

Some unmarried couples who move in together keep their finances separate, splitting rent and other household bills as if they were simply roommates. But many other couples—especially those who live together for a considerable amount of time—blend their finances at least to some degree.

Obviously, you don't need a cohabitation contract if you're in a brief relationship. But very few couples in the early stages of a relationship know how long it will last. And couples who started out by keeping their money separate often begin merging their finances gradually—without ever talking about what that means for their relationship and futures. That's almost always a mistake that will come back to haunt them—particularly if they split up.

If you break up but have a clear, written cohabitation agreement, you're more likely to avoid an expensive court fight over your property, debts, and any expectations for future payments between you. But cohabitation agreements aren't only about what happens when the relationship ends. They can also help couples be clear and up-front about their needs and expectations, which can minimize the chance of misunderstandings down the road.

Cohabitation agreements are especially important if you and your partner:

• buy property together, including personal property and major purchases like a house or condo
• take out joint credit cards or co-sign for loans
• open a joint checking account
• share living expenses
• have an understanding about your respective careers and household responsibilities—for instance, if you plan to delay or forego work or educational opportunities by taking care of the home and raising children (if you have kids together), while your partner supports you financially, or
• want to avoid potential battles over palimony by making it clear in a written agreement whether one partner will or will not make any payments to the other in case of a break-up.

Why You Should Put a Cohabitation Property Agreement in Writing

It is true that in some states and some circumstances, a judge might find that an unmarried couple has an enforceable a cohabitation contract even though the partners don't have a written agreement. For example:

• Courts in most states will recognize oral (spoken) cohabitation agreements—at least in theory.
• In some states and certain situations, courts may also recognize "implied" (unspoken) agreements based on couples' actions—such as combining their money in joint bank accounts, pooling their resources to buy property, taking title in that property jointly, and living under an arrangement where one partner provides most of the financial support while the other is a homemaker. (Carroll v. Lee, 712 P.2d 923 (Ariz. 1986).)
• Also, courts in a few states (such as Washington) may treat some unmarried couples as if they were married—for purposes of dividing their property—when they've lived together in a stable, marriage-like relationship, even if they didn't have an explicit cohabitation property agreement. (Koher v. Morgan, 968 P.2d 920 (Wash. Ct. App. 1998).)

As a practical matter, however, the lack of a written cohabitation agreement can lead to a host of legal problems. If you and your ex don't agree about the existence or specifics of an oral (or implied) agreement, it will be very difficult—and expensive—to prove your claims in court. Whether the two of you want to keep your property separate or share some (or all) of it, the only way to protect yourself and honor both of your intentions is to have a written contract that both of you have signed.

Putting your contract in writing needn't be time-consuming or dreary. Nor does it demonstrate a lack of trust in each other's word. To the contrary, it's a healthy dose of realism, recognizing that memories fade and feelings change over time. Approach the task in the spirit of clarifying your understanding and preserving the shared memory of two fair-minded people.

If your partner isn't willing to sign an agreement, don't rely on any oral promises. It's best to consider yourself to be without a contract at all.

What Should a Cohabitation Property Agreement Cover?

A cohabitation contract can be comprehensive, covering every aspect of your relationship, or it can be specific, covering only one transaction (such as buying a house). The agreement should spell out exactly what you both want, and how much you want to share property and finances, if at all. Here are some issues that couples typically include in a cohabitation property agreement:

• how they'll handle ownership of any property either or both of them acquire during their relationship, including property they buy, inherit, or receive as a gift
• their expectations about pooling resources and finances, as well as other contributions to their relationship
• how they'll handle paying for household expenses, such as food and utilities
• how they'll handle obligations to each other and a landlord when they share a rented home
• whether they'll have separate or joint control over their earnings
• if they buy a residence together, what will happen to it if they split up
• what will happen to their other property if they separate or either dies
• how they'll allocate responsibility for any joint debts after a breakup, and
• whether one partner will pay some kind of support to the other after their relationship ends.

(Learn more about what to include in a cohabitation contract, along with tips for preparing it and what to do when it's done.)

Cohabitation Agreements to Keep Property Separate

Especially in the first year or two after they get together, many unmarried couples keep all or most of their money and property separate—with the occasional exception of a joint account to pay household bills or an agreement to purchase one or more items jointly.

You may think that keeping your property ownership separate is so simple that you don't need a written agreement. Think again. As we've seen, some courts may recognize oral or implied cohabitation agreements. So the lack of a written contract might be an invitation for your erstwhile partner to later claim that you had a spoken or unspoken agreement to share your property.

Here are a few things you might include in an agreement to keep your property separate:

• All of the property each partner owns (including personal property, real estate, and financial assets) as of the date of the agreement will remain the owner's separate property, and neither partner will make any claim to property in the other person's name.
• Income, as well as anything purchased with that income, belongs absolutely to the partner who earned that income.
• Any gift or inheritance that either partner receives will belong absolutely to the one who receives it.
• Each partner will maintain separate bank accounts, retirement accounts, investments, and credit cards.
• You may decide to keep a joint checking or saving account for a specific purpose or to buy a particular item of personal property together. Unless you've agreed otherwise in writing, you'll own these assets equally (50/50).
• Neither partnerwill be responsible for the other's debts.
• You'll equally share routine household expenses, but neither will be obligated to reimburse the other for any excess contributions to those expenses unless you agree otherwise in writing.
• If you separate, each of you will be entitled to possess all of your separate property immediately, and neither will have any obligation to provide financial support for the other.

Attach a list of major items you own to the agreement (at least list all items worth $100 or more). Be sure to update your list from time to time—once a year is a good period.

Cohabitation Agreements to Share Property

Either when you move in together or at some later point in your relationship, you may decide to share your income and property. Typically, this agreement may:

• state that all earned income either of you receive after the date of the agreement, as well as any assets acquired with that income, will belong in equal shares to both of you regardless of title on the property
• spell out any exceptions, such as for gifts, inheritances, or income from previous investments
• clarify that property either of you earned or accumulated before the date of the agreement will remain that partner's separate property and won't be transferred to the other partner except in writing
• state that if you separate, you will equally divide all of your jointly owned property, while each of you will keep your separate property, and
• explain your agreement about any right to postseparation support—for instance, by stating that neither of you will owe the other support regardless of your financial conditions or differences in income.

Attach a list of all the property each of you owned separately before the agreement, as well as a list of your jointly owned property (which you'll need to update regularly).

You should have separate agreements if you plan to buy and co-own or take title to a home together or buy a car or other major purchase together.

Getting Legal Help Preparing a Cohabitation Property Agreement

You can learn more details on creating a cohabitation contract, find sample contracts for different situations, and get access to downloadable forms in Nolo's book, Living Together: A Legal Guide for Unmarried Couples.

If you're not sure whether living together contracts are valid in your state, you can ask a local attorney. It also makes sense to get a lawyer's help to prepare or review any agreement that involves a lot of money or property. You'll want to find a lawyer who's knowledgeable about family law and contract law in the context of unmarried couples. And if your agreement involves complicated estate planning, you should consult with a lawyer who has expertise in that area.