01/06/2011 09:14 pm ET Updated May 25, 2011

Cohabitation Agreements More Important Than Ever

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. ( 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.