Why Should I Have A Cohabitation Agreement?
Between 1960 and 2000, the number of unmarried cohabiting couples increased one thousand percent in the United States. Currently over 11 million people in the U.S. live with an unmarried partner.
There are many reasons couples today choose to live together, either before or instead of getting married. Some want to test the waters before taking the plunge into marriage; some want to save money on rent and other bills; and some, such as those living in Missouri, cannot legally marry their same-sex partner. Unlike married couples however, cohabitating couples do not benefit from certain legal rights conferred by marriage. These rights include the right to divide property, allocate certain debts, receive spousal support in the event of a break-up, file joint tax returns, receive survivor’s benefits from retirement plans and Social Security, and receive certain employment and health benefits. In order to compensate for the lack of government-granted rights and benefits, more and more unmarried couples are choosing to enter into cohabitation agreements, which expressly secure some of these omitted rights and benefits in a private written contract agreed to by both partners.
Cohabitation agreements are not only useful for defining the expectations and obligations of the parties in the relationship; they can also provide protection in jurisdictions which permit causes of action between unmarried couples following a separation. For instance, several states, unlike Missouri, have acknowledged the concept of “palimony.” In a palimony case, a former partner may sue for relief in civil court claiming a breach of an implied or express agreement. The court will look at the conduct of the couple during the relationship and determine if there was an agreement or understanding regarding the division of property or support. If one partner quits a job to provide housekeeping or childrearing services while the other provides financial support the court may find an unspoken understanding that one partner would support the other, even after the relationship is over. Or a court may find that property accumulated by the couple during the relationship should be divided evenly between both partners, even if only one partner paid for the property or titled the property only in one person’s name.
Maintenance is provided for by law under certain circumstances in the event of divorce, dissolution of marriage or legal separation. In contrast, palimony is not guaranteed even in states that recognize the concept. To award palimony the court must find a clear implied, oral, or written agreement between the partners regarding specific property and support issues.
In states such as Missouri which do not recognize palimony, a spurned partner may have other legal means to get money or property from an ex-partner. If one partner does unpaid work for the other, either in a business or around the house, that partner may be able to recover the money they should have earned from the work. If one partner contributes significantly to the value of property in the other partner’s name, the court may impose a constructive trust on the property so both partners can enjoy its benefits. It is important to keep in mind that cases such as these are rarely brought in Missouri; thus, the benefit of a cohabitation agreement becomes more important for Missouri residents seeking benefits and rights based on their efforts and contributions to the relationship. Also, since we live in a highly mobile society, it is possible that a cohabiting couple could move from Missouri to a state that establishes or grants more rights and benefits to unmarried couples.
As the popularity of cohabitation has increased, state and federal legislation has not kept pace. Courts need to find alternative ways to protect those involved in nonmarital relationships and ensure that a resulting breakup does not cause one partner to have to rely on public assistance or create some other inequity. This is particularly true in the case of same-sex couples, who in the vast majority of states are not legally allowed to obtain the rights and protections of marriage. A cohabitation agreement is an alternative and preferable way to protect these rights without resorting to the uncertainty of litigation without a written agreement.
What is a Cohabitation Agreement?
A cohabitation agreement is a formal, legal agreement between a couple that chooses to live together rather than marry. These agreements are flexible, and may cover a wide variety of issues, but their overall purpose is to clarify the financial commitments and responsibilities of each partner. A cohabitation agreement should not be confused with a prenuptial agreement. A prenuptial agreement is made in contemplation of marriage; a cohabitation agreement is made specifically because the couple does not plan to get married or are unable to legally do so.
If a couple with a cohabitation agreement gets married they must enter into a new prenuptial agreement before the marriage. Upon marrying the cohabitation agreement will no longer be valid. Once a couple is married their relationship is governed by family law, while cohabitation agreements are governed by contract law. As with any contract, both partners should be represented by attorneys during the drafting to ensure that the agreement is fair to both sides.
What Information should a Cohabitation Agreement Contain?
Cohabitation agreements can cover a wide variety of areas and are generally more flexible and less regulated than prenuptial agreements. Cohabitation agreements should be tailored to suit the individual needs of the couple, but generally such agreements will address the following:
1. Property and Finances. A cohabitation agreement should cover the distribution of property in the event of death or separation. It should list all property that each partner brings into the relationship and its value, and state that such property will remain in the possession of the original owner after the relationship has ended. If the couple intends to acquire property together during the relationship, the agreement should stipulate how that property will be divided in the event of death or separation. Furthermore, if one partner is the main or sole income provider, the agreement should stipulate whether, and to what extent, the income-earning partner will support the non-earning partner both during the relationship and after it ends. Finally, if the couple intends to combine finances and jointly pay for purchases, the agreement should state how such payments and resulting debts should be divided.
2. Housing. Housing is another major issue that cohabitation agreements should address. For instance, if a couple has purchased a home together, a cohabitation agreement can stipulate that in the event of the death of one partner the other will be able to continue living in the home. Alternatively, a cohabitation agreement can stipulate that the deceased partner’s share of the home will be preserved for distribution according to the deceased’s will, rather than pass to the living partner. A cohabitation agreement can also set the terms of rental payments by one partner to another or define the rights and obligations of the non-owning partner as to the home if only one partner is to be the owner.
3. Children. If the couple has children together, a cohabitation agreement may also set forth provisions regarding support, custody, and visitation with the children in the event of separation. However, a cohabitation agreement is not binding as to decisions regarding children and the court will have the final say on these issues, should they arise.
4. Medical Issues. Some states allow cohabitating couples to be placed on one another’s employee sponsored health insurance plan. A cohabitation agreement can specify how such an arrangement will be handled. Many hospitals have rules that prohibit non-family members from making medical decisions on behalf of a patient or even visiting a patient. A cohabitation agreement can designate each partner as a “health care proxy” for the other, which will allow partners to make emergency medical decisions for one another as well as permit visitation at hospital facilities. A couple may even choose to designate one another as guardians. A guardian is responsible for a person’s medical, financial, and personal decisions in the event that the person becomes incapacitated.
Why you should have a Cohabitation Agreement?
As more and more couples, young and old, are choosing to live together without marrying, cohabitation agreements are becoming more important and more commonplace. Because society does not yet bestow the rights and privileges of marriage on those who cohabit, these agreements are necessary to protect and benefit both partners and their respective families. Furthermore, cohabitation agreements help to clarify the relationship, express the clear intent of the parties and ensure both partners are on the same page before making a commitment to live together. Finally, when a relationship ends, whether by death or separation, the consequences may linger indefinitely. A cohabitation agreement helps ease the transition, and provides guidance and security during a difficult time.
The family law attorneys at Paule, Camazine & Blumenthal, P.C., are available to help you if you need assistance related to the matters discussed in this article, or if you need assistance with other family law matters.
This article is intended as a source of general information or of topics of interest and is not intended to furnish or render legal advice on any specific problem or issue. It is not a substitute for professional advice. Advice and counsel from an experienced professional should be sought for any specific problem.