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With increasing frequency, couples are choosing to forgo the whole white-dress-and-black-tie affair and build a life together without a marriage license.

By doing this, people may think they can largely avoid the financial and legal mess of a divorce, should they ever part ways. However, if they choose to purchase property together or co-mingle any of their assets, things may actually be a bit messier than if they’d tied the knot.

One way to avoid major headaches is by preparing a Brooklyn cohabitation agreement shortly after the purchase of the home. This is a very simple, easy way to clarify your stake in the property and how it should be divided in the event you separate.

This message is especially timely as the housing market is making a comeback, following the 2008 crash and subsequent recession. A recent report indicated that in the last quarter of 2013, residential sales in Manhattan had spiked 17 percent from a year earlier.

It’s not clear how many of those were driven by cohabiting partners, but we do know that, according to the Centers for Disease Control and Prevention,  almost half of women between the ages of 15 and 44 were cohabiting between 2006 and 2010 – and the figure has been rising.

There is nothing inherently wrong or bad about purchasing a property with your non-married spouse, but you should be mindful of the potential pitfalls.

It’s understandable that the discussion of a potential break-up is not a comfortable one, but having it now could save you a great deal of time, expense and acrimony down the road. And if you don’t break up? Then you won’t have to worry about it.

A cohabitation agreement can clearly spell out who owns what and how the property should be distributed if you split. Most cohabitation property agreements will include the following stipulations:

  • How certain assets are owned;
  • Whether expenses and income are shared, and if so, how they are shared;
  • How new assets are owned;
  • How credit cards, bank accounts and insurance policies are to be managed;
  • How certain assets will be disseminated in the event of a separation, or at least the type of process that will be used in the event there is a dispute regarding property rights.

Specifically with regard to the house, a cohabitation property agreement will indicate:

  • How the deed lists ownership;
  • How much of the home your partner owns;
  • Whether there are buyout rights, and what those are;
  • What will happen to the home if you separate;
  • How eviction might be handled.

Keep in mind that these agreements, much like divorce settlements, aren’t going to impact the standing either of you hold with the mortgage company or other creditors. However, if your former spouse doesn’t uphold his or her obligations  under the agreement, you would have grounds upon which to take them to court and compel them to comply.

Buying a home together is a major financial responsibility. It can be a smart choice, but you must have your eyes open to all the possibilities. You buy homeowners’ insurance because you want to be prepared for the unexpected, and then hope you never have to use it. View cohabitation property agreements in the same way.

Call Gilmer Law Firm, PLLC at (718) 864-2011 to learn more about cohabitation agreements in NYC.