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How can I avoid legal and financial complications if I am planning to live with someone?
There is a very good answer to that question. We suggest that you and your partner ask your lawyers to draw up a cohabitation agreement. This is simply a written document that states your mutual rights and obligations with respect to joint and separate property, as well as any other financial obligations or expectations you wish to agree upon in advance of moving in together. If you discover that you and your partner have different ideas about the financial aspects of living together, it’s better that you find out now rather than later.Can’t we just draft this agreement on my computer? Does it have to be prepared by an attorney?
You can draft a cohabitation agreement yourselves, but please have an attorney(s) review it. Attorneys can identify any loopholes or mistakes of law. Plus, if one partner alone creates the agreement and it’s not reviewed by legal counsel, the terms of the agreement could later be construed by a court against the partner who drew it up.
Should we each have our own attorney?
Yes -- for the same reason people should have separate attorneys when drawing up a prenuptial agreement (more about these later). If your cohabitation agreement comes before a court, the court might question its validity if it appears that either one of you has not been fairly represented by counsel. This is especially true if a lot of money is at stake.
Do courts really honor cohabitation agreements?
Almost every state in the union honors written cohabitation agreements. Many states will consider oral or implied agreements, but since memories often differ during the dissolution of a relationship, it can be very hard to prove a point made by an oral agreement.
What is an implied agreement?
The court defines an implied agreement as a pattern of actions or conduct suggesting an unspoken understanding between the two parties in question. Such actions or conduct may include owning joint property, maintaining a shared checking or savings account, or a history of one partner working and the other staying at home. If you have been financially supporting the woman you live with for some time and the two of you break up, a court could find that the two of you had an “understanding” that this state of affairs would continue -- even if no such understanding was put into words.
How about an oral versus a written agreement?An oral agreement is exactly that -- an actual exchange of spoken words with a clear agreement reached. It’s better to have it on paper—that’s our advice. Written agreements are superior to oral and implied agreements. They are more specific about date and content, and they provide more peace of mind. In the worst case, they will clarify for a court the nature of your intentions when you drew up the agreement. Even better, they offer you and the person you love a chance to go over your finances with a fine-tooth comb, eliminating possible future areas of disagreement or misunderstanding.