Michigan Cohabitation Agreements: The Complete Guide

Cohabitation Agreement: What is it?

A cohabitation agreement is a legal document between two people who live together and have established or intend to establish a romantic or intimate relationship. These agreements typically outline how assets and debts will be divided in the event of a separation. The document can serve to set expectations for both parties, whether it is related to the division of assets or other issues such as pets or visitation rights with each other’s children.
Because Michigan is not a "common law" state, cohabiting partners have no legal right to each other’s property after a breakup unless a legal document is in place. This can come into play when one partner has contributed financially to a home or business owned by the other. In that case, the agreement provides each party with rights to the other’s assets and debts.
Both parties benefit from the creation of a cohabitation agreement. The intent of the document is to avoid conflicts and resolve disputes whenever possible. Doing so can save both time and money in the court system.
For example, in correction to the hypothetical that we used earlier , another option in a cohabitation agreement could be the right for partner A to occupy an apartment for six months to allow him or her to find a new place to live. Other potential provisions include visitation rights with a partner’s children, support for pets owned by either party, and providing for issues involving personal property.
Cohabitation agreements can also help couples who are not yet living together. For example, the document may stipulate how much each party contributes to household expenses and how to cover costs for things like business venture investments, which may involve substantial assets.
Cohabitation agreements are often used by married couples who are separating. When that occurs, it is common for the parties involved to have shared assets and debts. Couples may want to look at how those will be divided and how finances will play out during the divorce process.
Although Michigan law does not require agreement among parents who have children in common, some couples choose to include provisions in a cohabitation agreement for issues such as custody and where their children spend the holiday or summer time periods. These agreements can help keep families intact and allow the parties to continue living in the same home together even after their romantic relationship has ended.

Cohabitation Agreements and the Law in Michigan

Cohabitation Agreements in Michigan are not sanctioned by statute but are a recognized device in Michigan law for property and support matters. While common law does not recognize the concept of common law marriage after a certain date, it does recognize the law of contracts. Cohabitation contracts are enforceable if they are entered into in contemplation of a valid marriage (but that is not always the case) and are based upon voluntary consent, reasonableness at the time of the making, and consideration. This allows the judge to insert an element of equity into the proceeding. Courts are to consider the situation of the parties at the time, circumstances surrounding the agreement, how the agreement is followed, and the facts pertinent to the agreement.
Agreements pertaining to sexual relations are not enforceable. Likewise, agreements for property division in contemplation of marriage are recognized as contracts. Courts will enforce agreements between competent adults as long as they are not contrary to public policy or morals. As long as the agreement does not make provision for marriage, cohabitation agreements are enforceable in Michigan, based on the contract laws of the state.

Anatomy of a Michigan Cohabitation Agreement

When putting together a cohabitation agreement, there are several elements that you will want to include. The following are some of the important elements that should be included:
Property Division
One of the biggest issues you can face when dissolving a relationship involving a cohabitation arrangement is the division of property. You can avoid a major headache by addressing this in your cohabitation agreement. You and your spouse should each have an inventory of your property, such as real property, vehicles, contents of the home, retirement accounts, bank accounts and other financial accounts. Once you have an accurate list of all your assets, you can divide them up in the cohabitation agreement that you sign prior to moving in together. If you have children, you will also want to include the custody arrangement for them, if applicable.
Financial Arrangements
You’ll also want to figure out how you’re going to handle the finances of the household. While many people would not expect to have to spend time figuring this out with someone they are romantically involved with, it can save you a lot of trouble down the road. Address how you intend to handle housing—will you split a mortgage and rent a place together? Will you each pay for your own utilities and groceries? If either party has children, what is the arrangement there as far as child support goes? What kind of budgeting system will you use?
Dispute Resolution
It is important to also address how you plan on coming to any resolution, should a dispute arise. This could include traditional litigation, mediation or arbitration. Both parties should sign the behind the cohabitation agreement.

How to Write a Cohabitation Agreement in Michigan

To ensure that the agreement is comprehensive, clearly understood by all parties involved, and legally binding, you should carefully follow these steps. The first step in the process of making a cohabitation agreement is to sit down with your partner and have an honest discussion about what you want to be included in the document as well as what you are comfortable documentation with. You and your partner should discuss everything from whether you will use your significant other’s last name if you get married to what will happen to your property and debts in the event of separation or death. If you have children (children from a previous relationship or any together), you should carefully discuss how you will address these matters in the event you separate from your significant other. While parents are not required to have a written parenting agreement, many cohabiting couples still do. Parents can detail physical custody arrangements, visitation, child support and medical expenses, and can provide for educational decisions and religious upbringing. A legal professional should be consulted if you have minor children. If your partner is agreeable, once you have discussed these issues and have determined what each party is comfortable with documenting, you should both do your own research regarding cohabitation agreements as well as contact your family lawyer. Your family lawyer should be able to assist you in drafting the legal document based on the particulars of your relationship and needs. If you are unable to reach a consensus regarding the terms of the agreement, your attorney may recommend litigation through the domestic relations court or that one party proceed with hiring an attorney. It is important to have the language in the cohabitation document be clear and concise and to avoid ambiguous or vague terms. You and your partner should carefully read the document before signing to make sure it is truly what you both wish and understand. While many cohabitation agreements are valid, complete, and satisfy the expectations of all parties, an ex or next romantic partner may still choose to challenge the document. A judge will determine whether or not the agreement is enforceable. As a general rule, a cohabitation agreement will not be able to conflict with statutory or public policy. That means that there is a greater chance that the agreement will be upheld if it simply addresses how the two individuals intend to go about things from an administrative standpoint.

Cohabitation Agreements vs Prenuptial Agreements

Both cohabitation agreements and prenuptial agreements can provide for many of the same things. However, there are significant differences in the situations where the parties may find one or the other appropriate. First, obviously, to enter into a prenuptial agreement the parties must be planning to marry. Second, the law provides that certain provisions in prenuptial agreements are void as against public policy if they contain any provision for parenting time or custody for minor children, or transfer of liability for a child’s support. Cohabitation agreements, on the other hand, can provide for all these matters, and either party could later make a claim for breach of contract and specific performance should the other party fail to comply with a valid cohabitation agreement provision .
In some circumstances provisions in a prenuptial agreement addressing support for a spouse may be deemed invalid depending on each litigant’s financial status at the time of the marriage and whether the circumstances have changed so dramatically that the original expectations are no longer reasonable. A cohabitation agreement does not afford the same protection, and case law provides that parties to a cohabitation agreement are required to maintain the terms of the agreement unless and until the relationship is over; accordingly, parties should carefully consider the terms they negotiate.
Finally, if the parties enter into a cohabitation agreement and never get married, they still have rights to bring a breach of contract action for any provisions of the agreement that are not followed or are violated. A prenuptial agreement would be moot if the parties do not marry.

Cohabitation Agreement Myths

There are numerous myths and misconceptions surrounding cohabitation agreements in Michigan. Understanding these potential misunderstandings can save you from a lot of headache, so it is important to not let them go unchecked. Familiarizing yourself with common misunderstandings can only be of benefit.
The first misconception is that the terms of a cohabitation agreement take precedence over other elements of state law. Michigan law is complex, and recurring is the theme that courts cannot change the law through an agreement or contract. Co-parenting arrangements that are made in a court of law may have a higher legal standing than a cohabitation agreement, while a cohabitation agreement may carry more weight than a verbal child support agreement.
A second common misconception is that once you enter into a cohabitation arrangement in Michigan, your assets become jointly held. Other than items specifically mentioned in a cohabitation agreement, all assets are separated and will be treated as such under Michigan law. This is merely a safeguard for the individual—there is no actual transfer of assets unless there is a specific contract separating assets to be held in common, and even then those terms must comply with Michigan law.
The third common misconception is that cohabitation agreements can be used to circumvent spousal support and alimony requirements. These types of financial agreements are covered under Michigan spousal support laws and take legal precedence over a cohabitation agreement. Similarly, visitation rights in a relationship do not have precedence over visitation rights through a divorce settlement; however, cohabitation agreements can help solidify the agreement with more detailed terms that suit the need of both parents.

Cohabitation Agreement Case Examples

To paint a more comprehensive picture of how cohabitation agreements can function in Michigan, we’ve included the following case studies:
Example 1: Sarah and Tom, both in their late 30s each owned their homes and accumulated a considerable amount of assets prior to entering into a relationship with one another. They also saw the benefits of having a cohabitation agreement, and as such negotiated and drafted an agreement that outlined distribution of assets should the relationship end in divorce. While they were not married under Michigan law, the two recognized the value of accurately defining their property rights in the event of an annulment or non-conversion from a domestic partnership to a marriage. They were able to draft an agreement that limited their exposure to lengthy litigation over the division of assets should they end their romantic relationship in the future.
Example 2: Trisha and Rob had been living together for four years before they decided they would have a child. The two were excited to embark on this new milestone together, but their excitement quickly turned to concern when they were confronted with the realities of the costs associated with becoming first time parents, as well as a change in their legal statuses. Trisha and Rob decided to get married, which would give Rob the rights to be on their infant’s birth certificate and the ability to cover him on his health insurance provided through his employer. Trisha likewise discussed with her employer about the possibility of filing a notice of dependant tax status with her daughter’s last name being hyphenated to include both hers and her husband’s last names. The whole process was pretty straightforward for the couple, as they had taken the time to analyze the pros and cons of getting married and had exchanged an anti-nuptial/cohabitation agreement outlining their expectations and intentions as a couple and asserting their separate property rights.
Example 3: Rose and Charlie were in a domestic partnership agreement with one another for a few years before they decided to split. During the course of their relationship, they could not quite agree on who owned certain items of personal property, as neither had obtained legal documentation regarding the contents of their home. In separating, Rose and Charlie were at an impasse about whether certain framed pictures were Roses or Charlie’s. The two settled on approximately $2,500 in settled personal property, and as part of their settlement agreement, both parties waived any further claims to property that had not been addressed. If either had sought a divorce in the circuit court instead of entering into an amicable separation, they likely would have been stuck litigating these issues for weeks, if not months or longer. It is important to note the differences between a domestic partnership agreement, which comes into effect on the date it is signed by the parties, and divorce proceedings commenced in a circuit court, which do not take effect until six months after the date they are filed.

Revocation or Modification of an Existing Cohabitation Agreement

Like marriage and divorce, the areas of cohabitation law are riddled with important legal nuances and complexities. After executing a cohabitation agreement, cohabiting couples in Michigan may find it necessary to revoke or amend the initial contract. Couples frequently arrive at this need due to life events such as parenthood, career opportunities, or differences in personal preferences that have evolved over time.
Cohabitation agreements do not have an indefinite shelf life; they can and should be revoked or amended if past agreements no longer apply to the cohabiting couple. For instance, a couple that moved in together early in their relationship may believe their agreement no longer covers them as parents, so they may choose to amend their existing contract to accommodate their more mature lifestyle.
Another possibility is that a contract is subject to imminent expiration. If the terms of a cohabitation agreement state that the contract remains in effect until a specific future date, the parties may mutually seek to extend the existing contract or revise the timeframe to guarantee its future enforceability in Michigan. Note, however, that it is vital to comply with Michigan law even when modifying previously established contracts; if the court finds an adjustment too out of step with legal precedent, they may refuse to enforce the contract.
Finally, spouses may wish to modify portions of their cohabitation contracts in response to a significant life change. Following the birth of a child , one or both partners may desire to revise their obligations and responsibilities under the existing agreement so that those responsibilities reflect information relevant to their new circumstance.
Essentially, revisions to a previous agreement should occur if the couple experiences any kind of breakup due to divorce, death, or separation and desires to create a new agreement or if circumstances shift so significantly that former elements of the contract are no longer valid. When the two parties can only make such a fundamental change by revoking or amending previous agreements, the parties must observe appropriate formalities to avoid any issues that could throw their agreement ahryeas.
Cohabitation agreements, like most other kinds of binding agreements, may include a termination clause. These clauses specify that the parties in question no longer wish to honor the terms of their contract and would like to void prior contracts. A termination clause may include such provisions as:
One notable factor concerns whether the contract maintains its validity following the death of one or both cohabiting partners. Generally, a cohabitation agreement remains in effect after one partner passes away. As a result, spouses may use cohabitation contracts within the context of estate planning as a means of allocating wealth. In the wake of a death, the surviving spouse may enforce the cohabitation contract, while the deceased spouse’s family members must abide by the terms of the contract.