Cohabitation Complexities

(Also applies to prenuptial and married couples)
More couples are living together without being married than ever before in our nation’s history. You probably know couples in this situation.  You might believe that this could never happen to me. I was married for 40 years when my wife died after a short illness. That happened 10 years ago. I’ve spent that time helping clients work through the legal challenges and options that arise when a couple cohabitates. Most widows or widowers who are living with each other do not want to get married again but want the economic efficiencies of living together:  i.e., companionship, travel and a bridge or golf partner. The following is a list of the nuts and bolts necessary to start a discussion for yourself or loved ones.

Immediate Challenges

  • What is your overall intent with the relationship?  Review each person’s finances.
  • List each person’s assets and liabilities.
  • Where will you live?
  • Will you buy or rent a house together?
  • Will one person own the residence?
  • Will the residence be jointly held or in a trust that spells out what happens in the event of a death or separation?
  • Mortgage, maintenance and operating expense for residence.
  • Children living in joint residence.
  • Business careers. Including benefits of the business or career such as:
    • Retirement and deferred compensation plan.
    • Defined benefit plans.
    • 401(k).
    • IRA.
    • Employee stock ownership.
  • Trust interests including trust interests from others.
  • Ownership of furnishings and artwork.
  • Management and control of separate property.
  • Gifts to family members.
  • Acquisition of joint property income and use of such income.
  • Motor vehicles.
  • Support, alimony, maintenance or other compensation.
  • Bank, credit and other accounts.
  • Payment of living expenses.
  • Provisions for children.
  • Define separate income and debt.
  • Compensation for services rendered.

Incapacity Challenges

  • Durable powers of attorney.
  1. Medical
  2. Financial
  • Guardian/conservator.

Inheritance Challenges

  • Property or estate at first death:
  1. Last will and testament.
  2. Use of residence.
  3. Gift of residence to survivor.
  4. Survivor paying rent.
  5. Tangible personal property division.
  6. Education of children from prior marriage.
  • Disposition of assets upon death of both parties:
  1. Residence.
  2. Tangible assets.
  3. Intangible assets.
  4. Division of common property.
  • Disposition of assets upon the termination of the cohabitation.
  1. Separation of property.
  2. Support and maintenance.
  3. Medical expenses and insurance.
  4. IRAs, pension and profit sharing plans.

This is only a partial list because there is too much information to provide in a short article.   As you can see, the issues can be complicated and should be addressed and put into writing.  You can accomplish this in a variety of ways, including but not limited to, different types of contracts, trusts, wills and powers of attorney. The real backbone of this type  planning is a cohabitation agreement.  If you find you are in this situation, or know someone who is, call us so we can discuss this these options in more detail.