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July 19, 2023 Feature

Cohabitation and Premarital Agreements

Ronald W. Nelson

The modern family is a much different family unit than in the past.

In 1980, Americans’ rate of marriage was 10.6 per 1,000 population and 63.2 percent of the whole population. By 2018, the rate of marriage declined to 6.59 per 1,000, and 53.4 percent of U.S. adults were married, down from 8.9 per 1,000 population and 58.9 percent of the whole population in 1995. Curtin & Sutton, NCHS Report “Marriage Rates in the United States, 1900–2018.” In addition to a decline in the rate and percentage of adults in a marital relationship, the age at which first marriage is entered has gone from 22 years of age in 1980 to 27.8 years in 2018 and is still rising.

Over that same period, the share of unmarried partners living together in the United States rose from 3 to 7 percent, with the number of unmarried partners living together nearly tripling from 6 million to 17 million. Moving in together has become an important transition in relationships in the United States. Studies show that about 70 percent of first marriages among women under the age of 36 began in premarital cohabitation lasting an average of 32 months before marriage. Kuperberg, Premarital Cohabitation and Direct Marriage in the United States: 1956–2015.

In the 1950s, when unmarried cohabitation was virtually unheard of—and society strongly looked down on it—responsibilities and obligations between intimate partners (spouses) were set by the laws of each state. Those state laws generally provided a set way in which couples’ financial holdings and obligations would be divided if they were to divorce, with the division of their accumulated property and debt being handled in one of two general ways depending on where they lived: “community property” mainly in the western United States and “equitable division” in the eastern United States, with “alimony” (spousal support) granted to the dependent spouse, and matters regarding the couple’s children determined in other ways.

Premarital (or “prenuptial”) agreements were generally used as death-focused property agreements to protect family wealth by the wealthier spouse (typically the husband) while assuring that the dependent spouse was assured an adequate living upon the death of the wealthy spouse. But, over time, premarital agreements grew into more divorce-focused agreements so that the couple was better able to anticipate how their marital property would be distributed rather than having to “throw their lot” to the chances of the laws of the state in which a divorce was filed. (See Family Advocate, Spring 2023.) The use of premarital agreements has steadily increased to the point that some studies suggest that as many as 10 percent of married couples have entered into either a premarital agreement or some kind of post-marital agreement in which the parties have worked out how their property will be distributed if they separate or divorce.

Even today, with modern families, however, there is often a strong emotional reaction to discussions about premarital agreements. Sometimes, that is because the partners have different views on how to handle their individual finances. Sometimes, it’s because one partner wants to control the finances of the relationship for comfort or because of that partner’s history. Sometimes, it’s because the partners don’t have an equal financial standing or awareness. And at still other times, it’s because they don’t think about it or don’t want to talk about it. If the couple is married, it may not matter because the “default” will kick in if they don’t have a valid premarital agreement. But if the couple is unmarried and living together—even if they are planning on later getting married, their risks of unforeseen problems drastically increase without specific discussions and written agreements.

Rarely is the transition from dating to cohabitation planned. Instead, it is often a “natural progression” from meeting to dating to spending overnights together to moving in together, a progression commonly referred to as “sliding vs. deciding.” But sliding into relationship transitions puts relationships at greater risk for problems, particularly problems when the couple avoids discussions about their day-to-day and future expectations and responsibilities. Some relationship events are pleasurable at the time but end up sowing the seeds for later disagreement rather than mutual commitment. With each transition, a couple becomes more emotionally reliant on each other while likely making assumptions about how the practicalities of their lives together work out. But at each stage growing towards more constantly living with each other, it is more important that they discuss and specifically agree how they will operating in their growing relationship.

Even though many couples tend towards “sliding” into cohabitation, they usually have some discussions about how they will handle finances when living together—at least after they’ve decided to “move in together” rather than shuttling between their separate homes. These informal agreements are the beginnings of what should be a longer and more detailed agreement about the couple’s expectations and responsibilities while living together—formally known as a “cohabitation agreement.”

So, what should a couple thinking about living together plan for, and what should they include in their cohabitation agreement? The classic lawyer answer is, “It depends.” On what does it depend? Many things. Many different things because each couple is different, and each person’s relationship with an intimate partner is different, as well as their history in other relationships and in dealing with family and money.

Make sure that you keep notes about your discussions. Because these discussions are the essence of your future. These notes form the basics of a couple’s agreement to live together and the basics for a more formal cohabitation agreement.

Even if you have discussions about how you will work through finances and responsibilities during cohabitation, it’s important to put your understanding into a formalized document. The more detailed, the better. And while making a contract about how you are going to live life together may seem unromantic, good relationships are built on trust and understanding.

How to Talk about Moving In Together

  • “Decide” to move into “living together” rather than “sliding into it.” Talk about what living together will mean; what your expectations of each other are now, and what they may grow to be. Talk about your expectations for companionship, independence, work, school, and life. Talk about how living together might enhance and challenge your existing relationship, your hopes and fears, and you needs and wants.
  • Figure out where you will live together. Will you live in the home that one or the other already occupies? Will you find another new place to live together?
  • Talk about your expectations for what will happen when you are living together, including how you will split housing costs, costs for upkeep and maintenance of the home in which you both live, utility costs, food and entertainment costs, and how you will share the daily duties of maintaining your new shared home. Do you need a “chore sheet?” Does one of you like one aspect of a daily task? Does one of you hate a part of that task? What will happen if one of you doesn’t like housework? How can you agree to share the load so that each of you takes over some things that each likes and doesn’t like—or is able to find a good balance where each of you is able to do mostly what they like sharing the “dirty work?”
  • Talk about how you will handle finances—even if you’ve discussed and agreed how you are going to handle daily tasks. Will you set up a combined account for household expenses? How will each of you contribute to that account? Or how will you split up bills so that neither one of you feels potentially slighted or taken advantage?
  • Will you buy separate pieces of personal and household property, or will you buy or contribute to ownership of property items with an expectation that it is yours together?
  • Talk about what happens if you can’t resolve conflict. What happens if you break up? It’s a tricky thing to do, talking about separating when you are just getting together. But it’s part of communicating and making sure that you go into your new arrangement with eyes wide open—not just because you don’t want little things to interrupt your joy, but “it’s the little things that matter.”
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Ronald W. Nelson

Ronald W. Nelson PA

Ronald W. Nelson is the principal of Ronald W. Nelson PA in Overland Park, Kansas, where he focuses his practice on complex family law issues Mr. Nelson has an extensive appellate practice, having handled over 125 appeals.