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Wisconsin cohabitation agreements are legally enforceable written contracts that allow unmarried partners to define property rights and financial obligations of a co-owned residence. Because Wisconsin does not recognize common-law marriage, these agreements are essential for protecting individual property and avoiding disputes. They are commonly used by unmarried partners, but can also be used by friends who plan to co-own and reside in a shared home.
At their core, cohabitation agreements are civil contracts between two or more people containing promises, conditions, and rules regarding how the people will live together, typically within the same home. While it is technically possible for married persons to enter cohabitation agreements together, they are most commonly signed by unmarried people who co-own property. Without a cohabitation agreement, the owners are under broad, default ownership rights as defined throughout various historical Wisconsin statutes and case law.
Cohabitation agreements are a property-centered contract used to exchange legally binding promises. Cohabitation agreements are a type of contract that describes how multiple owners of a piece of real estate will live together, setting rules and parameters in place such as setting a household budget or moveout procedures if the relationship breaks down. They are similar to real estate co-ownership agreements generally, albeit that in cohabitation agreements the parties are typically planning to live and reside under the same roof together.
Cohabitation agreements should be used any time more than one unmarried person owns a home or other piece of real estate that they plan to mutually reside in together. A more general real estate co-ownership agreement would be used if the parties own real estate properties together, but do not reside in the same home. Cohabitation agreements are most commonly entered into by unmarried romantic partners, and to a lesser extent between friends.
The goal of a cohabitation agreement is to resolve disputes between the owners that may arise, by setting a legal framework in place beforehand. Even sincere romantic partners or friends with the best intentions can eventually find themselves arguing and disagreeing on how to co-manage a household. A cohabitation agreement can give peace of mind to the parties and help create solutions to their problems ahead of time.
Cohabitation agreements are especially important for unmarried couples, as serious arguments or a break-up occurring are a real potential. If the relationship has been short-term to begin with, the risks are even greater. Unlike the divorce process, which has a long history of developed law and common procedures that divorce attorneys understand, unmarried co-habitants do not have such an established legal background.
Instead, co-owners who reach an irreconcilable disagreement must file a special type of lawsuit called a “partition” against each other, which asks a judge to order one owner buy the other out, or else sell the property at a public sale. Partition actions can be very expensive, requiring specialized lawyers who are experienced and familiar with real estate litigation (as opposed to the plethora of divorce and family law attorneys available, with much larger practice areas).
In a divorce, the court usually presumes that all property owned by the couple is 50/50 marital property (absent a prenuptial agreement). However in a partition action to break up the real estate property of unmarried persons, the court is more likely to consider arguments about which party contributed more to household costs or a larger portion of the down payment, potentially altering the ownership equity each party has away from true equality (example: 80/20). But as a double-edged sword, if the parties are disorganized and cannot provide documentary evidence as to who contributed more to the home’s costs, a partition court is likely to find the ownership at 50/50. A cohabitation agreement fixes the problem of trying to prove in court who owned what equity percentage in the home by having the parties agree at the outset to it in writing, creating stability and protection.
The established equity interest a party has affects the value of his or her buyout, or payout in the event of a sale. Oftentimes, one romantic partner will contribute significantly more to the home’s down payment and costs than the other partner, even though the parties put both of their names on the deed. Perhaps only one partner could qualify for a mortgage. A cohabitation agreement can create peace of mind for the couple by establishing that the party who contributed more owns more of the home’s equity–or otherwise tailor the equity specifically to the couple’s wishes. Cohabitation agreements can also include moveout procedures, if the parties break up their romantic relationship, to create a peaceful pathway during an already stressful time.
The purpose of a cohabitation agreement is to put a legal framework in place to govern how two or more homeowners will operate their joint household together, with the possibility of also establishing equity ownership rights in the event of a sale or buyout. The ultimate goal of these agreements is to resolve disputes between the co-owners ahead of time, so that a set of procedures is in place to settle future arguments.
Cohabitation agreements can include a variety of provisions covering different topics, including but not limited to:
A cohabitation agreement cannot include provisions that control child support, custody, or visitation. Only a family court of law can make determinations on these rights, in the child’s best interests and as a separate right of the child.
Cohabitation agreements also cannot include the standard illegitimate contract provisions or dynamics, such as:
Cohabitation agreements should also not be used to entirely replace estate planning documents, such as a will. While cohabitation agreements can reference and open the door to setting death procedures in place, this should only be done in conjunction with signing a cross-referenced will to truly give the framework strength in court.
Pros of a cohabitation agreement are that it sets a stable legal framework in place to resolve potential disputes that may arise between two or more co-owners who live together in the same household. There are not many cons to these agreements, other than the cost to have an attorney professionally draft them or the light awkwardness of having the conversation with one’s romantic partner or friend. But in the grand scheme, cohabitation agreements are positive documents that help resolve arguments and ultimately create more peace, especially for folks who are not married and therefore cannot rely on divorce law or prenuptial agreements.
Cohabitation agreements work by setting a set of exchanged promises in place between the parties, such as their equity shares in the home or moveout procedures. If a party breaches or violates those promises, the other party can file a petition to have a local judge enforce the cohabitation agreement, holding the parties accountable to what they agreed upon. Being aware of this, many parties comply with cohabitation agreements voluntarily to avoid paying expensive legal fees over enforcement litigation.
Cohabitation agreements touch on similar dynamics and topics as prenuptial agreements, however, the prenuptial agreement is a document specifically tailored towards a potential divorce of the parties. Cohabitation agreements would rarely discuss divorce terms, as they are typically entered into by intentionally unmarried persons. A prenuptial or marital property agreement is a much more appropriate document to sign if the parties plan to get married or are married, as there are Wisconsin statutes and case law developed over the years that specifically and comprehensively address prenuptial agreements within family law settings.
Yes, if drafted professionally and signed in voluntary, sound mind, cohabitation agreements are absolutely legal and enforceable.
Cohabitation agreements do not legally need to be notarized, but it is extremely wise to do so and highly recommended. Notarizing the document helps ensure that neither party can later deny signing it in court. Notarization raises its legitimacy, which affects its enforcement. Depending on how serious of terms are put in the agreement (ex: inheritances or large financial promises), an attorney may recommend that 1-2 witnesses also sign the document, further solidifying its evidentiary basis.
