Cohabitation Agreements

Cohabitation, or a situation in which two people in a romantic relationship live together in the same household but are not married, is an increasingly common trend in today’s society. Couples often commingle or co-own property in such situations, which can complicate the division of that property if the relationship ends. This is especially true in the state of Illinois, which is one of the few states that does not legally recognize common law marriages and their attendant property rights. Hewitt v. Hewitt, 77 Ill. 2d 49 (1979). One potential solution for unmarried partners to protect their property rights comes in the form of a cohabitation agreement. 

Similar to a prenuptial agreement, a cohabitation agreement spells out how a cohabitating, unmarried couple will split up their assets if the union is terminated. For unmarried individuals who have no other legal remedy to protect their interests in Illinois should a relationship end, a cohabitation agreement provides a mechanism to divide property in an equitable manner. Typically, cohabitation agreements spell out how property or assets shared by the couple will be divided. In addition, some agreements address more personal matters, such as custody arrangements if children are involved, although this is not the case in Illinois.

Cohabitation agreements are contracts. Therefore, they are governed by contract law principles. There must be an offer and acceptance, adequate consideration, and mutual assent. Furthermore, the agreement must be reasonable and not unconscionable, and the parties must have entered into the agreement without impediments such as duress or undue hardship.

In most jurisdictions, a cohabitation agreement can be as broad or as narrow as desired, depending on the couple’s preferences. It may address one asset or issue, such as how to divide a residence, or it may address a multitude of issues that one might typically see in a divorce proceeding, such as alimony, division of assets, childcare, etc. Either way, the parties must clearly define what is being considered under the agreement. The agreement should clearly address what happens in the event the parties separate or either party dies. Furthermore, it should define how the parties will decide on disagreements and address if or how the parties plan to support one another. Finally, if needed, the agreement should contain standard contractual language such as good faith and fair dealing, consequences for breach, severability clauses, choice of law provisions, arbitration clauses, and modification clauses.

It is important to note that cohabitation agreements are limited in the state of Illinois. In 1979, the Illinois Supreme Court held that an unmarried person has no legal right to their partner’s property if the relationship terminates. Hewitt v. Hewitt, 77 Ill. 2d 49, 66 (1979). This ruling was later upheld in the 2016 case of Blumenthal v. Brewer, 2016 IL 118781, ¶ 63. Furthermore, per the Illinois Marriage and Dissolution of Marriage Act, Illinois will only recognize a common law marriage if it was legally entered into in another state and the couple later moves to Illinois – otherwise, Illinois does not recognize common law marriage. 750 ILCS 5/.

So what are the practical consequences of these rulings and laws for cohabitation agreements in Illinois? For one, the potential scope of an agreement is limited. Since Illinois courts cannot intervene in property disputes between unmarried couples, they cannot settle issues that must be decided by a court in traditional divorce cases, such as child support or custody. Thus, cohabitation agreements in Illinois must be limited to things such as property or other assets. Furthermore, an Illinois court’s willingness to enforce an agreement may be questionable given the rulings above. 

Nevertheless, a cohabitation agreement is a valid option for unmarried couples looking to cohabitate and share property. It allows the parties to protect their interests and set the terms for how property is to be jointly owned. Furthermore, it lessens the ownership complications inherent in jointly owned property should the relationship come to an end. 

Should you have additional questions regarding the subject matter hereinabove, or should you wish to explore a cohabitation agreement as an option, please call us at 847-705-7555 or email Attorney Chance W. Badertscher at CBadertscher@lavellelaw.com to schedule your free and confidential one-hour consultation.