The Ins-and-outs of Cohabitation Agreements

A cohabitation agreement is a written contract between two people who live together. They are often considered to be a luxury and only for the wealthy, but they can be useful for all types of non-married partners in a relationship. 

Cohabitation agreements do more than just outline how you will share your finances, assets, and debts while you are living together. They make clear what happens if you separate from your partner or if one party dies.

Lawyers prepare cohabitation agreements for unmarried couples who own separate property, plan to own property together, or who have children. This is an easy way to layout the rules of the relationship and its end.

Generally, you do not need an agreement if you’re renting with your partner, do not have kids, and do not own any property – and have no immediate plan for these! If you own something of value like a family heirloom or your car, when you separate from your partner, they would have to prove in court that they are entitled to that asset. They do not have the automatic rights just because you live together or are in a long-term relationship (if not married!)

You need an agreement to protect you both.

A cohabitation agreement covers the rights and responsibilities regarding the property owned together or apart, earnings, and what happens upon separation or death. It’s important to have a cohabitation agreement because it can avoid the stress of family law court proceedings if you end up separating. Having an agreement allows you to:

  • set out how you want your debts, assets, and property divided – this could be 50/50 or something completely customized;
  • decide how much each of you pays towards expenses such as rent or bills or pet care;
  • outline any special arrangements for children (if any).

Contracting between two people has a lot of flexibility. A cohab agreement can include anything that is included in a marriage contract. What you include will depend on your particular situation. For instance, if you do not have kids with your partner, then it does not make sense to include parenting support or parenting arrangements in your cohabitation agreement. You can always amend the agreement in the future if your situation changes.


What you own

Before you get started, you’ll need to figure out what assets you own. Here are some things that should be included in the list:

  • Assets that are of value (like a car or investments)
  • Any assets that you expect to receive as gifts or inheritances or from a business venture
  • Assets owned jointly with someone else who is not the partner you are cohabiting with. For example, a family cottage that you own with your siblings or a business you run as a partnership.
  • Foreign assets, property, or out of country business interests

What you owe

You’ll need to include a clear and detailed list of the debts each party will be responsible for during your relationship and if you are to separate or one of you dies, including:

  • Credit cards
  • Mortgages
  • Lines of credit
  • Student loans
  • Property liens or other financial obligations (such as car loans)

Who is named as beneficiary in other documents

If you have other legal documents, like a will or pension plan, make sure that your cohabitation agreements adequately reflect the instructions in those documents. For example, you should check with your bank who you have named as the beneficiary for your accounts (savings, chequing, and investment). Your work may also provide opportunities to specify who gets what should something happen to you—for example, it could allow for a specific percentage of payouts from 401(k) retirement plans or pension plan. 

Update these documents after moving in together and repeat their instructions in your cohabitation agreement, so there isn’t any confusion about how things should go if one partner dies before another.

What you expect

You should also be clear about what you expect from the other person. This includes what you expect from the relationship and life together:

  • Do you expect to get married one day? Have kids? If so, then you need to consider whether this agreement will be void if one of those situations happens or if it will live on.
  • Do you expect to share expenses? Will contributions to the household and partnership be considered in the ownership of assets? Is there anything that would change this agreement, like a disability or a new job?
  • What kind of relationship do you want? Your agreement should reflect your values. For example, a couple who believes that the commitment to living together long-term means everything is split equally should still get an agreement! The law does not consider everything equal in cohabitation (and sometimes not even in marriage) so an agreement outlining your personal values is always a good idea.

How assets, debts, and responsibilities will be divided if you separate

A cohabitation agreement is a great way to not only have control over how your relationship will work, but to make sure you understand what will happen if you separate. An agreement is extra important for unmarried couples because there are less laws to protect them. 

You can include provisions about payments of debts, division of assets, whether you can buy each other out to get the asset (if possible for one partner to pay for the other person’s share), how you will choose to value your assets (appraiser?), if you’ll continue to care for a child post-separation, and so much more. It’s also important that there are provisions in place regarding pets.


We hope that this article has helped you understand the need for a cohabitation agreement and some of the key issues to consider when drafting one. As we’ve seen, a cohabitation agreement can be tailored to your specific needs and circumstances. However, as with any legal document, you should seek professional advice before entering into a cohabitation agreement. These documents can go from simple to complex and a lawyer will be able to tailor your agreement to your needs.