Cohabitation Agreements - Part 2

It’s a fact that the great majority of unmarried couples living together in New York do not have a written cohabitation agreement. That is to say, they have no document that sets forth their respective rights and responsibilities toward each other. Unfortunately for them, the New York courts and legislature haven't filled in the blanks, like they have done for people who are married. 

As a consequence, in the event that an unmarried couple should split up or one of them should die, the likelihood of expensive and unpredictable litigation is increased because nothing will have been settled in advance. Here are just a few more good reasons why a couple might consider having a cohab:

• To guarantee the financially less secure partner an equitable settlement.
  
• To properly compensate a party for his or her role as a caretaker.
  
• To allow the financially more secure party to limit exposure in the event of a breakup.
  
• To disclose expectations of the relationship, both financial and personal.
  

Each couple can, and should, design their own cohabitation agreement to say exactly what they both want to put into as well as get out of their relationship. Cohabs can be customized to address the particular needs and desires of each couple. Typically, however, they cover one or more of the following key points:

• Allocating responsibility for payments relating to the common residence, including mortgage, insurance, and repairs.
  
• Handling the payment of debts.
  
• Distributing property in case of death or breakup.
  
• Dividing the principal residence upon breakup of the relationship or if one of the parties dies. For example, setting up the property ownership as 'joint tenants with rights of survivorship' will allow the surviving partner to stay in the shared home.
  
• Specifying health insurance coverage.
  
• Creating a 'health care proxy' that will allow each partner to make decisions about the other’s health care in case of emergency.
  
• Determining the right to serve as guardian/conservator in the event of incapacitation.
  
• Establishing the right to make medical decisions.
  

It makes sense to invest a small amount of time and money now in order to avoid major headaches and expenses later. Ideally, a cohab should allow each partner to feel safe in the knowledge that if the relationship were to break down, then the agreement will safeguard them financially. Think of a cohab as an insurance policy. Obviously, you hope that you will never need it. But, if and when the time comes, you’ll be glad you’ve got one.

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Cohabitation Agreements - Part 1

With more and more couples choosing to live together instead of getting married, it is increasingly common for unmarried partners to have a Cohabitation Agreement in order to ensure that their intentions and expectations are clear and, if necessary, enforceable. Obviously, you don't need a contract if you have no assets or are in a brief relationship. But, in a long-term and serious relationship, whether you're planning on moving in together or you've been cohabiting for many years, a “cohab” can be just as necessary, if not more so, than its more famous cousin, the prenup.

As you set up a household together, each of you has certain expectations regarding your finances and your obligations to each other. You may expect that each of you will retain your own separate property, and neither of you will be obligated to support the other. Your partner may have the opposite expectation. If you and your partner break up, these conflicting expectations can lead to tremendous distress and unhappiness.

In New York, unmarried couples – gay, lesbian, and straight – do not automatically get a legal framework that governs their relationships. When they break up, unmarried couples are afforded no protection under New York’s Domestic Relations Law. There is only limited relief available (i.e., child support) in Family Court. Unlike other states, New York does not recognize either common law marriage or palimony. Particularly with respect to property rights, the aftermath of a break up or the death of one of the parties can be more devastating to an unmarried person than to a similarly situated person who is married.

Although New York courts can adjust property rights on divorce in order to reach a result that is fair to each of the parties, the situation is far different for unmarried couples. When unmarried partners split up, a judge can only determine who owns what property and in what shares based only on the parties’ actual contributions and/or intentions. When the chips are down, it may be difficult to prove actual contributions, and either or both of the parties may have honestly forgotten (or conveniently forgotten) their original intentions.

If you are planning to mix assets or share expenses, it makes sense to put your agreement in writing, especially if significant money or property is involved. A cohab can provide the framework for unmarried couples to confirm their intentions and record their respective contributions. The sooner you agree on how to share your property while you are together and how to split it should you break up, the less confusion and aggravation you are likely to face later.

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