Dating Prenup: Moving In Together? Protect Yourself

Living together: You may view it as a prelude to marriage, a matter of convenience, or an end in itself. After all, not every committed couple wants — or currently has the legal right — to get married. So why not live together? According to the U.S. Census Bureau, more than 12 million unmarried partners currently share a household, an 88 percent increase over the number of cohabiters in 1990. And while the number of cohabiting couples has skyrocketed, the law has not kept up: There’s still no automatic legal protection for your property or assets if you and your beloved eventually part ways.

The last thing you want to think about when you’re moving in together may be a breakup, but this is one area in which it pays to be prepared. Face it: Splits happen, and nobody is immune. Lately, to protect themselves where the law is lacking, more and more couples are turning to a sort of dating prenup — also known as a cohabitation agreement or a living-together contract — to lay out the everyday issues in black and white, and to protect their assets in the event that things go south.

“I wish I had thought of that before I moved in with my boyfriend,” says Meg, 38, of Madison, Wisconsin. “We met online at Loveawake dating site. We were together for 11 years, lived together for eight, and fought for five of those. By the time we finally called it quits, we were so angry and bitter with each other, we were bickering over silly things like dishtowels and DVDs, and a fountain pen. I mean, really, a pen! But what made it even worse for me was that we had moved from New York City to San Diego for his job. I was hesitant to give up my own job — which I loved — and my own friends and life in New York. I basically left my entire support system behind and put my trust in our relationship. Before we moved, he promised me that if things between us didn’t work out, he would pay for my move back to NYC; he made about five times more than I did, and moving is so expensive. That made it easier for me to move to San Diego — it was as though he acknowledged what I was giving up in exchange for being with him.”

His promise ended up being worthless, Meg says. “Unfortunately, he ‘forgot’ his agreement when we broke up a few years later; I ended up packing up my things and moving back east with the last $1,500 I had. I left with a chair, a dresser, a coffee table, and some red bowls that he had always said he hated. If it were up to him, though, I’d have left with nothing; we fought over everything. I had to buy a bed and all the basics, because I had sold mine before our move out west; he had claimed his was better and nicer, and of course, we bought things together ‘for our future.’ It takes thousands of dollars to find an apartment in New York, and I ended up going into debt just to get settled. It took six and a half years to dig myself out of that hole.”

Meg’s situation is all too common; statistically, 50 percent of cohabiting couples will part ways. And no state law recognizes community property for unmarried couples. Having a clear agreement in place can help you avoid arguments about who does what during the relationship and what will happen if it comes to an end.

You’ll want the cohabitation agreement to be in writing. So, what do you need to cover when you’re drafting one up? First of all, write out the day-to-day financial details, such as what percentage each person will contribute to the mortgage/rent, utilities, transportation and food costs. You can note which of you will be responsible for paying the bills each month, and even how you’ll divvy up housework duties, especially if one of you can’t stand to fill the compost bin but doesn’t mind washing and drying the dishes. This section can be as broad or as detailed as you desire, but simpler is better. The point isn’t to document the fun out of your relationship; it’s to come to an agreement on the things that are important to each of you.

“When my boyfriend (now fiancé) and I were first talking about moving in together, we realized we had different views about who should do what around the house,” says Jennifer, 26, of Richmond, Virginia. “I love to cook, he’s a self-titled grillmaster, and we both hate to clean up afterward. But we didn’t feel like we needed to spell out cooking and cleaning duties in an agreement; it seemed nitpicky, and it was something that just evolved as we went along. But we do have a written agreement as to how much we’ll each pay toward our joint mortgage and our utility bills. We also put in writing that we’re each responsible for our own car and student loans,” she says. “It’s not the most romantic thing to do, but romance shouldn’t drive practical decisions.”

Second, it’s crucial to address the bigger questions — the issues that could pack a crippling financial and emotional punch if something were to go wrong. Here’s where you’ll note what will happen to your home or apartment if the two of you don’t wish to continue on together; how jointly purchased property and other assets will be split up; whether one person can buy out the other’s interest in the house, boat, car/truck, or vacation share, and how the price will be determined; whether one will help pay the other’s moving expenses; and so on. This section requires frank conversation and transparency. Depending on your finances and assets, you may benefit by seeking legal advice.

Sound overwhelming? It doesn’t have to be. An attorney specializing in family law can help you put together a contract, or you can go the do-it-yourself route. There are 20 fill-in forms available in Living Together: A Legal Guide for Unmarried Couples (Nolo, 2008), including forms for sharing a rental property, the gradual co-ownership of real estate, the sharing of property acquired during the relationship, and more. The guide offers advice on every facet of cohabitation, including ten tips for writing a cohabitation agreement.

Having a written agreement in place can give cohabiting couples peace of mind, and it doesn’t necessarily indicate a lack of faith in the relationship. You’ll know that, if worse comes to worst and the relationship ends, you’ll both be protected by a written agreement you made for your mutual benefit.