It is becoming increasingly common for unmarried couples to live together for an extended period of time. Perhaps their intention is to never get married. However, after accumulating property, it is sensible for both parties to come to some sort of agreement on how the property should be divided in the case that the couple separates.
This blog will give a brief overview on how a couple can start to create a cohabitation property agreement, and what it should include.
First steps in covering your house in a cohabitation property agreement
Buying a house together with your partner is a big step. As well as a great investment, it can also present some risk. It’s a good idea to create a cohabitation property agreement along with your partner that includes the following elements.
An agreement should define the ownership rights. If a couple are listed as “tenants in common”, in the event of the death of an owner, that person’s share of the house will go to whoever is listed in his or her will or trust. If the property is owned as “joint tenants with right of survivorship”, it means that in the event of the death of one of the owners, the other will automatically inherit the whole house.
The agreement should also include how much of the house each person owns, and if there are any buyout rights. If there are buyout rights, it should be specified how the house would be appraised. The terms of what the proceedings will be if you break up should also be defined.
It is a good idea to seek trusted legal advice on real estate transactions if you are considering creating a cohabitation property agreement.
Source: Findlaw, “Cohabitation property rights for unmarried couples,” accessed Aug. 01, 2017