Who Really Needs a Cohabitation Agreement?
A former client recently asked me to prepare a cohabitation agreement. It was heartening to hear about her successful new relationship after a tough divorce. It had been a while since I had been asked for a cohab agreement, so I spent a couple of weeks polishing up my form. As I considered the provisions of the agreement in light of recent development in the law, I started to think: Who really needs a cohabitation agreement anyway? Four categories came to mind:
1. Committed unmarried couples. Divorce can be difficult, but when long-term unmarried couples split, the breakup can be brutal. The law provides rules, procedures, and remedies for married couples when they part ways, but those rules do not apply to unmarried couples. Lots of different laws can create legal nightmares for unmarried couples when they break up or one of the couple passes away. Tax laws do not authorize tax-free property transfers between unmarried couples; property laws do not specify who is responsible for paying a joint apartment lease when one of the couple moves out; unmarried couples cannot inherit from each other unless they have wills, and even then, death taxes may consume their inheritance. Property laws contain provisions for dividing joint property or allocating joint bank accounts, but those legal provisions do not adapt well to breakups. The procedures for partition of joint property or contribution to joint debts may be slow, inflexible and inequitable. A cohabitation agreement can spell out the consequences of a break up or the death of an unmarried partner, avoiding costly and protracted legal proceedings.
2. Couples who are married under common law. Common law marriage is a tricky subject, surrounded by myths and falsehoods. Pennsylvania no longer recognizes common law marriage for couples who formed their relationships after December 31, 2004. Perhaps the Commonwealth might recognize a common law marriage formed under the laws of another state, or a relationship formed here before 12/31/2004. But the outcome of such cases is very uncertain. A cohabitation agreement might help by memorializing the common law marriage and spelling out the consequences of divorce or death.
3. Unmarried same-sex couples. Pennsylvania does not solemnize same-sex marriages, so same-sex couples must create contractual relationships to protect their children and property. Cohabitation agreements, along with testamentary instruments, are essential to protecting their legal rights, not only upon breakup or death, but in many everyday situations such as hospital visitation, access to children’s school records, and authority to make financial transactions.
4. Married same-sex couples. This category might be surprising. Since some states permit same-sex couples to marry or enter into domestic partnerships, why should they need a cohabitation agreement? The reason is illustrated by a recent Texas appeals court case, in which there is a challenge to the Texas court’s power to divorce same-sex couples who were legally married in another state. If a same-sex couple has been married outside of Pennsylvania, there is no guarantee yet that Pennsylvania will have the legal authority to divorce them under its existing laws. A cohabitation agreement can provide a remedy.