A cohabitation agreement is a domestic contract.  It is not the same as a marriage contract.  Like all family contracts, it should not be viewed as a lack of love or future commitment to your new partner, but rather your conscious need to set out the manner in which your finances and property will be shared or divided in the event of a split or death; based on your wishes and intentions, not on state law.

At present, cohabitating partners, have very few rights to property, when compared to married couples.  Typically, the property you bring into the relationship, plus any increase in its value, usually continues to belong to you alone.  This would include investment assets, registered accounts, real estate, or chattels.  The main reason for drawing up a cohabitation agreement is to provide for a division of property if the relationship breaks down.  The most straightforward way is to state that all property remains the separate property of each individual and to provide in the contract for a “separation of property regime.”  This means that all property, including assets that are owned before cohabitation, plus any increases in value, and all property acquired during the relationship is owned strictly according to title.

Christine’s Tip:

This type of domestic agreement is very different to a marriage contract and not usually something that is ideal to each partner for the long term.  That being said, cohabitation agreements are not as rigid as marriage prenups, and contracts can be crafted with more freedom and/or creativity based on the particular conditions and circumstances that each party is in when they begin their union.