I Will Never Marry Again! – What is a Cohabitation Agreement?

So your divorce sucked and you’ve vowed never to marry again!  But wait…surprise!… you meet someone and think if we just live together and never marry, that will prevent a divorce.  WRONG!  You could actually be putting your assets, finances, and even your relationship at more risk!

Especially if you’ve been divorced, you may be very protective of your assets and finances and the thoughts of cohabitating can seem threatening.  Relationships take time to develop trust and a feeling of security.  If you are eager to move in together but are leery of commingling assets and losing track of your separate property, then a Cohabitation Agreement may give you confidence. 

Let’s dig deeper, What is a Cohabitation agreement?

A cohabitation agreement is a legally binding contract signed by two people who live together in a committed relationship. It lays out how you and your significant other will divide assets, property, and financial responsibilities during the relationship and what happens if the relationship ends. People use this type of agreement to protect their assets and to ensure that their relationship is not viewed as common law marriage.


Having a written agreement that clearly states that you are not married and do not want governing marital laws to dictate how to allocate your assets and debts in the event you split up protects you from such mandates.  This agreement can create clear expectations of how to divide up household expenses and purchases.  It can also go over what each person gets if they do split up.


The only cons are if your relationship is not yet solid enough to handle entering into this agreement.  If you are not comfortable disclosing your assets and debts with your partner, then you may want to hold off.  You will need to reveal all the details of your finances as well as the property you own.  You will also need to talk about the “M” word.  Marriage.  You will be stating that your intention is NOT to present as a married couple, which could be painful if you desire to be married and are now settling on the fact that you are not going to be married. 

Our process

At Next Chapter Wealth Strategies, we sit down with the couple together and talk about what the couple is trying to accomplish, why they are seeking a Cohabitation Agreement, and then explain the pros and cons.  We also suggest they obtain legal advice if their financial affairs are more complex.

Once we get a feel for what the couple is trying to accomplish, we begin to learn more about the details of their finances, such as ownership of real property, vehicles, bank accounts, business interests, retirement assets, pension, future inheritances, etc.  Each person must disclose everything so that the agreement can be drawn up with validity. 

Couples then need to figure out when they will begin living together, what household expenses and other expenses will be shared, how to divide the household chores, if there is an expectation of sharing in appreciation and/or equity in the home, how to pay for vacations, unexpected home maintenance, how to make revisions to your agreement, etc.

We also review beneficiaries on life insurance policies, bank accounts, investment accounts, retirement accounts, wills, trusts, etc.  We discuss heirs and intentions for the couple to provide for each in the event of death, or if their assets are to be transferred to their children. 

What couples end up with

Our deliverables are a detailed mediated agreement that is to be notarized with separate exhibits that disclose their complete financial information.  The mediated agreement shall be legally enforceable once signed and filed with the court.  Most couples do not file the notarized agreement with the court unless they intend to enforce it.  Putting it in a safe deposit box or other safe keeping measures is a good idea.

Having clear expectations can ease anxiety and future resentment in a long-term relationship.  Knowing what expenses are shared and what expenses are separate can keep tensions down.  Planning a vacation, repairing a fence, menu planning with food shopping, cleaning toilets, and other events can cause strain if one person feels like they are doing or paying more for something than the other.  Discussing how to approach the overall duties in the relationships can help set the next chapter of your life up for success.

Investment advisory products and services are made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor.

Next Chapter Wealth Strategies is not affiliated with or endorsed by the U.S. Government or any governmental agency.

The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. 1733795 – 04/23