Tips for Cohabitating Unmarried Couples

With the divorce rate on the rise, in the spirit of “if it ain’t broke, don’t fix it” many couples are opting to forgo marriage in favor of simply cohabitating. But while living together as a committed couple without getting married may avoid the drama of divorce, cohabitating couples face many of the same issues faced by married couples. For this reason, it is important for unmarried couples who live together to be proactive in laying the legal groundwork for how they plan to live together and how to handle matters in the event that they want to go their separate ways.

Of course, this isn’t the easiest conversation to have with your partner. In fact, it’s no less difficult than discussing a pre-nuptial agreement. Planning requires couples to tackle real world considerations and while it may risk bursting the romantic bubble, the potential for disaster is worth the risk. The reality is, the apparent ease of cohabitation without marriage is an illusion that can quickly become a catastrophe if circumstances change or the relationship ends.

If you are considering cohabiting with your partner, here are a few things worth considering:

  1. Cohabitation Agreements: a “cohabitation agreement” is a catch-all term for a contract between two people that sets out how they want to organize their finances and economic life together. It might sound a lot like a prenuptial agreement, but unlike a prenuptial agreement, a cohabitation agreement demands all of the requirements of a contract (an offer, an acceptance, and consideration for performance). A prenuptial agreement, on the other hand, has the actual marriage as the triggering event for the effectiveness of the agreement. Another difference is that cohabitation agreements are enforced through the Civil Courts, rather than the Family Courts. Finally, a cohabitation agreement can be an especially important thing for same-sex couples in Pennsylvania. For example, if a same-sex couple is legally married in another state and they decide to move to Pennsylvania, the Commonwealth will not recognize their marriage and is unlikely to enforce a prenuptial agreement between the parties if the marriage was a condition for the agreement. By entering into a cohabitation agreement, a same-sex couple in this situation can protect their property rights in Pennsylvania should the couple split. Unfortunately, until the Commonwealth affords same-sex marriages the same full faith and credit as traditional marriages, cohabitation agreements might be the only way for same-sex couples to protect themselves in Pennsylvania.
  2. Common Law Marriage in Pennsylvania: It doesn’t exist. At least… not any more. The Commonwealth abolished common law marriage by statute in 2005. As a result, unless the requirements were met for common law marriage before the effective date of the law in 2005, a cohabitating couple will not be able to enjoy the privileges of marriage unless they apply for a marriage license and actually get married.
  3. Taxes: While some say nothing is certain in this world but death and taxes, the tax status of unmarried cohabitating couples can be somewhat murky. Although it’s clear that unmarried couples cannot usually take advantage of the “married, filing jointly” status, they may nevertheless be able to take advantage of credits, deductions and exemptions that many married couples enjoy – especially if they have children together and/or one party earns considerably less than the other.
  4. Titles and Deeds: It is extremely important for unmarried couples to title property appropriately. The way property is titled significantly impacts each party’s right to the property. For example, a jointly titled checking assumes that all the funds deposited are equally owned by each party. Intent matters – if couples elect a “right of survivorship” or title the asset in a way that reflects their intent to affect a joint ownership, then in the event that the couple breaks up or one partner predeceases the other, the asset will pass more easily to the intended owner. But remember, legal ownership also means legal liabilities.
  5. Emergency Contacts/Next of Kin: Imagine this – your partner is seriously ill or injured and when you arrive at the hospital, the staff says you that only “family” may visit and because you are not legally married, you don’t qualify! Careful planning can avoid a heart-wrenching and frustrating situation like this one. Taking the time to have a durable power of attorney or living will drafted on yours and your partner’s behalf will ensure that you are each afforded the access you deserve. Of course, you should identify your partner as an emergency contact with your medical provider and insurance company, but do not rely entirely on this designation. It’s just not worth the risk.

Our Pittsburgh family law firm can assist you in drafting domestic partnership agreements also known as cohabitation agreements.   Contact us for experienced advice in this area.