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Liz Mandarano

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Cohabitation Agreements More Important Than Ever

Posted: 01/06/11 09:14 PM ET

Many couples today decline marriage but what happens when financially lopsided couples who decline the protections of marriage, break up? Wealthy individuals or those who anticipate large inheritances may want to protect their assets. Likewise, those who enter into a relationship and sacrifice time and effort in supporting it in non-financial ways will want to ensure their security should a break-up occur.

The recent Pew Research Center study found that 39 percent of Americans say marriage is becoming obsolete. Like most states, New York does not recognize common law marriage and does not allow same sex marriage or civil unions. Therefore, individuals who cohabitate, even for decades, are legally considered strangers when it comes to property rights. It is therefore critical that unmarried couples who live together discuss financial expectations, personal obligations, and identify property rights should the relationship end.

Although they don't like to admit it, States often legislate or fail to do so with morals in mind. And the law looks unfavorably on people who do not marry. By declining to examine the needs of a fast growing population that has opted out of the traditional marriage setting, New York fails to protect a significant portion of its population.

So without legislation or an active judiciary, how do unmarried cohabitants protect their rights? Ms. Lisa-Nicolle Grist is the Executive Director for the Alternatives to Marriage Project, Inc., a non-profit organization that advocates for individuals who are single, cannot marry, or cohabitate. (www.unmarried.org). The organization recommends partners have cohabitation agreements, as well as wills. These agreements may be beneficial if:

• You have significant assets or an anticipated inheritance.
• You own a business or property purchased before or during the cohabitation.
• There are children from a previous relationship.
• There is an income disparity.
• You or your partner has debts.
• One person is sacrificing economic power to raise children.
• To properly compensate a caregiver.
• To clarify personal expectations of the relationship.
• To clarify financial support during the relationship or upon its dissolution.
• To specify health insurance coverage.
• To determine the right to serve as a guardian in the event of incapacitation or to make medical decisions.
• You want clarification on a variety of issues such as how expenses are handled, infidelity, and separation and death provisions.

Let's say a woman supports her boyfriend through business school. They cohabitate, but decline to marry for political reasons. After 10 years, they break-up. Over the years, his success ultimately earned him millions. In New York, a married woman has the laws of equitable distribution to protect her. The unmarried woman? Zip. Although laws are in place to protect any minor offspring of this relationship, the cohabiting woman has no property or financial rights without a written agreement. Yet the break-up rate for cohabiting couples is similar and even higher than divorce rates- 40% of will break-up within five years. One can only imagine the economic impact given the lack of safety netting involved.

The lesson? New York needs to acknowledge a trend that shows no sign of long-term reversal and examine the financial impact that occurs when a cohabiting couple break-ups in the same manner it examines the impact of divorce. New York then needs to enact appropriate legislation that protects both sides just as when a marriage ends. Until that time, cohabiting couples should contract, either by themselves or preferably with the assistance of an attorney, as to such as issues as financial obligations and property division upon the termination of the relationship.

 
 
 
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02:25 AM on 01/14/2011
I have never, ever understood this mentality that people should be entitled to something or other after a divorce, let alone a vague relationship ending. Who cares whether he was successful during their marriage or not? Why in the world does that give her any claim to his assets? Fortunately alimony laws aren't popular outside the United States, but they've never even made historical sense; women have almost always had family to fall back on in the event they were left destitute after a split, so what exactly is the rationale behind handing over a partner's assets, of which she had no stake in earning?
07:22 PM on 01/13/2011
The lack of rights for same sex couples and the fact that they are not recognized in NYS, this agreement makes perfect sense. What if a same sex couple has a child together (adoption or donor/surrogate), in the event of the death of one of the partners or if the relationship ends, how is custody determined, this can be clearly outlined in this type of agreement. In addition, the monetary rights, who canbe beneficiary of such things as IRA's, etc are better protected with this type of documentation.
11:16 AM on 01/10/2011
often times people are in cohabitati­ng relationsh­ips and don’t realize that should their relationship end, they have no rights.

I have two words for you, Liz: personal responsibility. If you choose not to get married, you're choosing to not protect yourself financially should you join finances, support the other, or accept support from the other. If a couple chooses to set some things up ahead of time, the agreements you mention can be drafted up. That's their choice.

But to assert that the state should step into people's personal lives when they clearly opt out of letting the state dictate the terms (as with marriage/divorce)? Absolutely not.
06:00 PM on 01/08/2011
I have to say I also disagree with the conclusion that New York should enact legislation governing cohabitating couples (and completely agree with Kai). Many couples cohabitate precisely because they want to avoid the bundle of obligations that a marriage contract entails. Why anyone cohabitating would believe they have the same rights as someone in a marriage is beyond me. If they want the same rights they can get married or enter into an agreement. However, if you have the state legislating the rights of cohabitating couples, it's much more likely that you're going to have a lot of people inadvertently screwing themselves by living with someone. I'm a high-earning female and have lived with men I would not marry because I don't want to risk half my assets. If the state is going to determine that living with a man is going to put my assets at risk, what choice is left to me? As for the woman who lives with a man for years, has his children and then finds she doesn't have anything to call her own when they split up, I can only say "boohoohoo." I shouldn't have to pay for someone else's ignorance or stupidity with my freedom. Some of us sisters are doing it for ourselves.
04:15 PM on 01/08/2011
Unless you have children together, cohabitating should not give you the same rights as marriage. If you want the rights and responsibilities that come with marriage: get married. Raising children aside, just because you've lived off someone elses earning potential for the duration of the relationship shouldn't give you the right to that lifestyle. For example, if Suzie works 50 hours a week as a manager of a lucrative business, and her boyfriend Quintin spends most of his time playing vidoegames and is intermittently employed, should she be responsible for supporting him when she finally realizes he's useless? I think not.
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Laurie Israel
09:31 AM on 01/08/2011
The success of a marriage is strongly correlated with the sharing and generosity of the parties to each other. That's why cohabitations have a much better chance of failing than marriages. When people keep their property to themselves, they send a strong message of lack of commitment to the relationship. Separating property weakens a marriage. That's why prenups are generally a death knell for (first) marriages. Cohabiting just means you're not really totally committed to your partner. Divorce laws in all states try to strike a fair and equitable balance to address the list of topics that you've listed that could be included in a cohabitation agreement. So why not just marry? And why not do it without a prenup? Cohabitation without marriage and prenups and cohabitation agreements send a message of distrust to your significant other and a distrust of the law (which is designed to be fair). You're together because you love each other, right? Then walk the walk.
03:34 PM on 01/08/2011
I think what you're overlooking is that marriage itself is inconsistent with modern civilization. If you look at the centuries since the Dark Ages, an enduring theme has been the breaking away from notions of bondage to institutions and rulers, and the rise of freedom and self-determination. The end of legal slavery, the rise of equal rights for women, the signing of the Magna Charta, all this and more points to the long march toward individual freedom.

Marriage is one of the last vestiges of the Bad Old Days. Marriage is what is called in legal circles an "adhesion contract", with enormous legal obligations on the primary earner and no obligations whatsoever on the party who does little or nothing. A marriage license is like a winning lottery ticket for people who don't want to work.

Fast forward to today: cohabitation without mandatory legal contracts is a true alliance of equals. If one or the other party wants something guaranteed, it is what economists praise as an "arm's length transaction" without coercion. *This* is the way for humanity to live in an enlightened era.

Remember too that if cohabitation becomes a legal minefield for men, then men will avoid cohabitation in droves, just as they are shunning marriage. Men will simply re-route to avoid whatever traps are set for them, with increasing efficiency thanks to the Internet and info sharing.
04:26 PM on 01/08/2011
Great post Kai. If someone decides to leave me, why should she get anything she hasn't earned ? She should have her own money and anything we bought together be split 50-50.
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mansterEZ
searching for secular humanist fact-based truth
12:40 AM on 01/08/2011
I have been in a cohabitation arrangement for 18 years and counting. We keep separate finances and help each other out of jams from time to time. Also have separate wills which we update every year or so. We have considered living separately every so often, but find more compelling reasons to stay together and tolerate the irritations. Never never let a grudge last more than 3 days. Being pissed is totally non productive. We both find marriage to be a burden and have seen many acquaintances go their separate ways over the years. Our friends admire our commitment and freedom to make our own choices as individuals; something that marriage encumbers.
08:48 PM on 01/07/2011
Fragile families (those who split up and share children) might certainly benefit, since having a safe, decent and financially stable set of two homes is certainly in the best interests of all. The child support system is overwrought with attempts to keep the child/ren from unwed parents from suffering from the unqiue financial burden of living apart and raising children.
07:14 PM on 01/07/2011
Excuse me, but just because two people decide to live together does not mean that they have to leach on the other persons' finances and/or properties in the case of a breakup. Your reasoning is very draconian.
If I want to protect my girlfriend in case something happened to me, I would name her as a beneficiary in my will: End of story.
But to form a written agreement for compensation in case our boyfriend/girlfriend relationship ends? That's just ridiculous. Thank God New York and other states don't recognize any rights for co-inhabitants.
If 2 people want to subjugate themselves to the Law of the state, they can get married.
07:13 PM on 01/07/2011
Best Advice for ALL MEN: Don't sign that Marriage Certificat­­­­e.
I read recently that in France, they offer a "Civil Union" document for couples whom are co-habitat­­­­ing. If the relationsh­­­­ip does not work out, then a simple document is given by the local government immediatel­­­­y. No costly divorce proceeding­­­­; No expensive lawyers, and certainly no judge deciding your fate and financial future.
The best thing that men can do is meet a woman that they get along with and love and perhaps live together. If the relationsh­­­­ip works for many years, great. If not, at least the guy will not end up 50% poorer, as in what occurs in a divorce.
If a woman needs or expects to get married because they want security, then look for someone else. If a woman loves you, it should not matter whether you sign a piece of paper or not. But quite honestly, signing that marriage certificat­­­­e can create severe hardship on the finances of a man.
And with 70% of marriages ending in divorce, it's not worth the risk to lose 1/2 your wealth and your home.
Need proof, look at the recent video interviews of Johnny Depp and Oprah. They talk about their relationsh­­­ips with their partners without marriage and they are very happy.
12:49 PM on 01/10/2011
You repeatedly address men in your comment forgetting that in more and more relationships, the women are the bread winners. Feel free to update your comments to the 21st century
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Shaun Hensley
The American Experiment has failed
08:10 PM on 01/10/2011
Which means fewer and fewer women will find any need for male companionship, we know.
11:00 AM on 01/07/2011
Why bother with all the legal wrangling about who gets how much of someone else's money? Keep it simple and elegant:

Every adult is responsible for their own way in life. Where people are incapable of supporting themselves, the role of the state is to provide a safety net.

Latching onto another person and siphoning off income and assets is wrong. That is being a parasite and there's no excuse for it today.

That is also exactly why people co-habit (and not marry). People don't WANT all this horrific legal barbed wire entangling their lives. Is it any coincidence that people are avoiding marriage in droves, to seek a relationship in its purest form, and the (ahem) marriage lawyers keep trying to convince people to wade into that bramble patch of legal contracts again?

There's that saying, attorneys thrive on other peoples' misery. It would seem to be true here.
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Shaun Hensley
The American Experiment has failed
08:11 PM on 01/10/2011
When you live with someone and share expenses for any length of time, there is going to be community property.
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Erinaleks
Architectural Artisan, Free Thinker
10:46 AM on 01/07/2011
You are a step away from making marriage mandatory. I understand how fair the legal system is in family court. Hard to understand why anyone wouldn't want to have a lawyer on retainer?
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Liz Mandarano
10:16 AM on 01/07/2011
Yes Ben, sometimes that is the case, but often times people are in cohabitating relationships and don’t realize that should their relationship end, they have no rights. Thanks for reading, Liz.
05:02 PM on 01/12/2011
So because of others' ignorance everyone else should get married?
02:31 AM on 01/14/2011
I don't understand this clamoring about "rights". Rights to what, exactly? You mean some kind of human right? If "cohabitating relationships" are now equatable to marriage, why have marriage in the first place?
12:17 AM on 01/07/2011
I thought people co-habitate to for the reasons you are trying to protect them from.