Cohabitation Agreement

[InterprovincialParents]

I guess what you are saying is that as she accumulates equity in the home I would reap that benefit as well as the life insurance. I guess we can have some sort of scale every x amount of years the life insurance policy changes so she is not having me reap extra benefits.

Yes, that would be more fair and equitable.

[SuperDad300]

Cohab Agreement

I guess what you are saying is that as she accumulates equity in the home I would reap that benefit as well as the life insurance. I guess we can have some sort of scale every x amount of years the life insurance policy changes so she is not having me reap extra benefits.

[InterprovincialParents]

Understood but we could put in the cohab agreement that she must have life insurance for approx 150k-200k to be fair to me right?

Yes. But then HER estate loses out.

[SuperDad300]

Cohab Agreement

Understood but we could put in the cohab agreement that she must have life insurance for approx 150k-200k to be fair to me right?

[InterprovincialParents]

okay but she is also putting down a downpayment on her end so not just the 3 months 7k down.

So back to the trust thing. Leave he house to her and she get a life insurance policy for me? I would need coverage as well if I die she would accumulate 150k what if she dies? I would need to be protected just as she in the spirit of fairness.

In the spirit of fairness, the house becomes hers if you die, and you have already paid half...so she just profitted by what, 150K? But if she dies, you get the house and the mortgage...big difference. That's all.

But ask me again tomorrow when I am less ornery with the forum...I might be more soft-hearted and willing to advise generousity

[SuperDad300]

Cohab Agreement

okay but she is also putting down a downpayment on her end so not just the 3 months 7k down.

So back to the trust thing. Leave he house to her and she get a life insurance policy for me? I would need coverage as well if I die she would accumulate 150k what if she dies? I would need to be protected just as she in the spirit of fairness.

[InterprovincialParents]

Call me a cynic, but I have seen the most reasonable people become greedy materialistic vultures upon separation, divorce, and death.

[InterprovincialParents]

Three months worth of closing costs, versus 25 years....hmmm...

If you are co-owners, you can write in your will that your half goes to your estate and not to her, but it can be easily contested, and often is, lasting years...at which point, the life insurance has gone to fight the battle against losing the house...especially if the life insurance lists her as beneficiary...she does not need to, nor is she required to, spend it to pay off your estate if you are co-owners. The house reverts to the living owner should a joint owner die.

I think you would be better getting life insurance listing your children as beneficiary (or in trust). When you die, she can sell the house, taking the profits from the sale, since our real estate market is not crashing anytime soon...

[SuperDad300]

Cohab Agreement

Great insight. We somewhat thought about this and we will not have mortgage insurance. However we will state in the cohab that we must both have life insurance policies for each other so that the other person can buy that portion of the home. We will clearly state in the cohab that my 1/2 the home goes to my estate and hers goes to her estate.

In essence we would be screwed if someone passes away as the home would be unaffordable but we counter that by having life insurance.

I guess if she splits after a few months she loses 3 months worth of mortgage payments closing costs ect..

Thoughts?

[InterprovincialParents]

sorry...my own fault for not reading the entire thread...

One thought on your new idea...you pay half upfront, and cosign...you split, she defaults, you are stuck with her mortgage as well, as the co-signee. While I try to remain optimistic, here is the worse case scenario:

You pay 1/2, co-sign other half. 3 months later, you split...she is not to be found...moves, changes jobs...you have no option of finding her to enforce the cohab...do you have a contingency plan for that? And, if you are co-owners, and you die, the home automatically goes to her. There is no option for any equity to children...I had assumed you would pay, and mortgage, with her paying other utilities, etc, to ensure you retained sole ownership.

My apologies.

[SuperDad300]

Cohab Agreement

We would plan on being joint owners of the home everything split 50/50. In the cohab agreement we plan on stipulating that I pay my 1/2 the home front and that she will assume the mortgage for the other 1/2 of the home.

I am a little confused in your statement of me owning the home outright.

[InterprovincialParents]

Thanks for the replies.

Does this sound fair for both parties (summary of assets in first thread).

I put approx 20% down and I own the home. She pays approx $900-1k for living expenses and I am responsible for the mortgage. I would own the home outright.

Is this fair to both parties?

It might seem fair, but not to the courts. If you own the home, and she pays 1k per month, the courts will see that as part of the mortgage unless otherwise stipulated. A rental agreement can cover that off, with her paying perhaps for groceries and utilities and you paying the mortgage and taxes. Your best bet is a rental or cohab that stipulates very clearly that her payments are not towards the house upkeep, mortgage, or taxes.

[SuperDad300]

Cohab Agreement

I have first option to buy her out by neutral appraisers. If the house is 300k, I put 150k nowand lets say she has put 10k down. If neither of us want the home we sell it - lets say the house is now worth 400k. I would get my original 150k + another 50k she would get the 50k + 10k (although not really 10k bcause most of it would be interest on the mortgage.

In essence it's her responibilty to pay the mortgage hower she sees fit.

[Rioe]

The risk I foresee is what happens if something goes sour and you separate. Then, she gets half a house she hasn't finished paying for yet. If both your names are on the mortgage, I'm not sure you can get away with saying that's her half. And what if you renew in a few years at a higher interest rate; then she might end up paying more overall. And what if house values plummet? Then your half and her half might become kind of unequal. Just stuff to consider.

[SuperDad300]

Cohab Agreement

We have in the rough draft of the agreement that we split everything. She is responsible for the entire mortgage which would be half and I am putting my half now. Also we would not put mortgage insurance but in the agreement we both must have life insurance policies. I have 2 kids from a previous marriage so want to make sure if something happens assets are distributed fairly.