In recent years, more and more couples have chosen to forgo marriage in favor of long-term partnered relationships. Whatever the motivation behind this shift, the impact of such a decision can be significant in a few areas, including real estate and property ownership. Married couples who end up going through a divorce have equitable distribution rights in Pennsylvania, meaning the court can step in and decide how to divide their property fairly. However, unmarried couples do not have this same protection.
If you are considering buying property or moving in with your long-term partner, you must consider how this will impact you if the relationship ever ends.
Cohabitation Property Agreement
A cohabitation property agreement is a legally binding contract that outlines a variety of terms in a relationship. Specifically, it is often intended to protect each partner’s personal belongings and provide a framework for financial responsibilities and division of property. These agreements provide necessary clarity and support if there are ever disagreements about how such things should be handled.
Benefits of a Cohabitation Property Agreement in Pennsylvania
Anyone considering moving in with or buying real estate with their romantic partner should consider the benefits of a cohabitation property agreement. They offer numerous advantages and can provide protection for both partners.
Protection of Individual Assets
Your agreement can include stipulations regarding what property you owned prior to the relationship and which assets you will keep in the event of a breakup. You and your partner can include terms that outline how shared property, like furniture you bought together or a home titled in both your names, will be handled if the relationship ends.
Division of Debts
Assets aren’t the only property that unmarried couples can accrue during their relationship. Debt is also a major consideration and something you may want to include in your cohabitation property agreement. Adding debt into the contract will ensure that neither partner will be unfairly burdened with debt if you break up.
Sharing Financial Responsibilities
These agreements can do more than provide protection for a potential breakup; they can also address how financial obligations are handled during the relationship. Including how household bills and expenses will be divided can help prevent future disagreements and start the period of cohabitation or co-ownership with clear expectations.
Valuable Protection for Unwed Couples
Married spouses enjoy many legal rights and protections that their unmarried counterparts do not, especially in the area of property ownership. This lack of protection prevents many unwed couples from reaching major life milestones, like owning a house together. Cohabitation property agreements provide legal safeguards for couples who choose not to marry or are not ready to marry yet.
Creating a cohabitation property agreement is a relatively simple process with the help of a real estate attorney. If you and your partner are ready to have an open and honest conversation about your financial goals and property ownership, contact The Law Offices of Leo T. White, LLC, for a confidential consultation. Our real estate experience and legal acumen make us perfectly suited to help you create the ideal cohabitation property agreement. Call us at (610) 579-9141 to schedule your consultation.