Cohabitation Raises Legal Issues

According to the 2000 U.S. Census, the number of unmarried partner households rose 72% nationwide during the 1990s. Changing values and economic conditions have combined to make cohabitation a part of the national culture and raised important legal issues for those who choose to live in this manner.

Unlike married partners, those who cohabit do not share legal rights to property, inheritance, income and debts. And, if children are involved, additional issues of custody and support arise.

As unromantic as it may seem, a clearly written partnership agreement at the beginning of a relationship becomes the proverbial ounce of protection worth more than a pound of cure. The time to make these decisions regarding property ownership, inheritance and support is before any triggering events occur. To attempt to prove the existence of an agreement after the fact, and without a written contract, can be costly and time consuming.

Even without formal documents, traditionally married couples have certain rights to property, protected by law. Those rights, such as the right to inherit property upon the death of a partner, are not available to the unmarried couple, same-sex or otherwise. Executing an appropriate contract can protect these rights.

For a contract to be valid it must pass four basic tests. First, the parties to the contract must be capable of contracting. This rules out a contract involving a minor or someone deemed incompetent. Second, there must be valid consent. To be valid, the parties must agree without coercion, duress, undue influence or fraud. Third, the contract must have a lawful object, not an illegal activity.

And fourth, after the precedent-setting Marvin v. Marvin case of 1976, the contract between partners cannot be based primarily on the rendition of sexual favors. The Supreme Court of California held in the Marvin case that contracts between unmarried couples are not against public policy and are enforceable, as long as the contracts are not founded explicitly on the consideration of sexual services.

The major elements of a living-together agreement should include property ownership and property rights, inheritance rights and support. Like a business agreement, property ownership should address the issues of title and division of ownership interests, credit toward future property interests created by contributions to property, the rights of the parties in the event they choose to dissolve the partnership, and, equally important, inheritance rights.

Inheritance rights are a particularly sticky issue, since state intestacy laws have been written to favor a blood family member, never an unmarried partner. Therefore, a valid will and/or living trust are a must if the partners intend to pass on property to each other at death.

Partners can agree to pool their earnings for mutual support. Or, they may choose to treat income earned by each as that person’s separate property. Or, as the Marvin case pointed out, one may be the breadwinner while the other provides non-income producing support.

Unmarried couples do have one advantage over traditional married couples, especially in community property states. They may transfer property between partners for the purpose of avoiding future creditor claims, something difficult to accomplish in community property jurisdictions.