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Cohabitation Agreements

Friday, May 16, 2014

Boulds v. Nielson - Just Because You Weren't Married Doesn't Mean You Won't End Up in Court

Cohabitation has quickly become "the new normal" for couples in the U.S., with women more commonly choosing to live with men first before marriage, and many of those relationships never being legally formalized.

However, Manhattan divorce attorneys know that just because a couple wasn't married doesn't necessarily mean that disputes won't be handled in court, or that former cohabitants won't have to divide property or pay support.

In the recent case of Boulds v. Nielson, the Alaska Supreme Court supported the lower court's findings, which essentially handled the separation of a cohabiting couple much the way it would a divorcing one.

Here, the pair were together 16 years. During that time, they lived together, raised children together and owned property together. He claimed her as a dependent on his taxes. However, they never married.

The court determined that their union had been a legal domestic partnership, and as such, matters of child custody and property and asset division could be appropriately litigated in family court.

The proceedings were largely uncontested, save for the issue of certain insurance and retirement accounts. Namely, these involved an insurance death benefit, a 401(k) retirement account and a union pension. The holder of these counts argued that they belonged to him alone. His former girlfriend argued otherwise.

The court found that the insurance death benefit and the 401(k) account were his alone, but the union pension benefits were not, and could be considered a domestic partnership asset subject to division.

The man appealed that federal law barred division of his union pension with a non-spouse, and that the lower court had erred in considering only his initial intent to share the pension with his then-girlfriend for the benefit of their kids.

However, the state high court rejected the notion that federal law barred distribution of union pension benefits to non-married spouses. Under state law, the court found, she was entitled to half.

This mirrors what we might expect to see at the conclusion of a New York City divorce trial, though each state varies a great degree on what it considers to be a "common-law marriage" or a "domestic partnership," and legal protections vary greatly.

In New York, domestic partnerships can be obtained through the city clerk's office. Though they were more heavily utilized for homosexual couples before gay marriage was green-lighted, they are still available, and aren't limited to gay and lesbian couples. Among the benefits of a domestic partnership:

  • Entitlement to health insurance benefits;
  • Authorization to be awarded monetary compensation for a partner who dies in the line of duty as a firefighter, police officer, school crossing guard, correctional officer or sanitation worker - or any other city worker killed in the course of duty.
  • Be considered in housing subsidy arrangement;
  • Afforded all next-of-kin visitation rights in hospitals, nursing homes and health care facilities;
  • Entitlement to receive workers' compensation benefits from eligible spouses.

Still, equitable division of property in the event of a separation for a couple with a domestic partnership or who are simply cohabiting is not necessarily a given.That's why we usually recommend drafting a cohabitation agreement that spells out all relevant division of property, should you decide to part ways.

These matters can be more complex than they appear on the surface, and the advice of an experienced family law attorneys is typically warranted.

If you are contemplating a divorce in Manhattan, call our offices at (718) 864-2011.


Friday, March 28, 2014

Cohabitation Agreements Crucial if Couples Seek to Own Joint Property

With increasing frequency, couples are choosing to forgo the whole white-dress-and-black-tie affair and build a life together without a marriage license.

By doing this, people may think they can largely avoid the financial and legal mess of a divorce, should they ever part ways. However, if they choose to purchase property together or co-mingle any of their assets, things may actually be a bit messier than if they'd tied the knot. 

One way to avoid major headaches is by preparing a Brooklyn cohabitation agreement shortly after the purchase of the home. This is a very simple, easy way to clarify your stake in the property and how it should be divided in the event you separate. 

This message is especially timely as the housing market is making a comeback, following the 2008 crash and subsequent recession. A recent report indicated that in the last quarter of 2013, residential sales in Manhattan had spiked 17 percent from a year earlier. 

It's not clear how many of those were driven by cohabiting partners, but we do know that, according to the Centers for Disease Control and Prevention,  almost half of women between the ages of 15 and 44 were cohabiting between 2006 and 2010 - and the figure has been rising. 

There is nothing inherently wrong or bad about purchasing a property with your non-married spouse, but you should be mindful of the potential pitfalls. 

It's understandable that the discussion of a potential break-up is not a comfortable one, but having it now could save you a great deal of time, expense and acrimony down the road. And if you don't break up? Then you won't have to worry about it. 

A cohabitation agreement can clearly spell out who owns what and how the property should be distributed if you split. Most cohabitation property agreements will include the following stipulations:

  • How certain assets are owned;
  • Whether expenses and income are shared, and if so, how they are shared;
  • How new assets are owned;
  • How credit cards, bank accounts and insurance policies are to be managed;
  • How certain assets will be disseminated in the event of a separation, or at least the type of process that will be used in the event there is a dispute regarding property rights. 

Specifically with regard to the house, a cohabitation property agreement will indicate:

  • How the deed lists ownership;
  • How much of the home your partner owns;
  • Whether there are buyout rights, and what those are;
  • What will happen to the home if you separate;
  • How eviction might be handled. 

Keep in mind that these agreements, much like divorce settlements, aren't going to impact the standing either of you hold with the mortgage company or other creditors. However, if your former spouse doesn't uphold his or her obligations  under the agreement, you would have grounds upon which to take them to court and compel them to comply. 

Buying a home together is a major financial responsibility. It can be a smart choice, but you must have your eyes open to all the possibilities. You buy homeowners' insurance because you want to be prepared for the unexpected, and then hope you never have to use it. View cohabitation property agreements in the same way.

Call The Law Office of George M. Gilmer at (718) 864-2011 to learn more about cohabitation agreements in NYC.


Wednesday, February 5, 2014

Benefits of a Prenuptial Agreement in Brooklyn

There is a skewed view of Brooklyn prenuptial agreements as being something of a weapon for wealthy spouses, eager to shield deep coffers from the hands of their less rich, less sophisticated partner. And of course, there is the notion that such agreements are deeply unromantic, undercutting the notion that marriage is forever, which is what you agreeing to when you enter the union. 

In reality, a good prenuptial agreement can do a lot to protect both spouses. Ultimately, it can save both parties a lot of time, energy and money that might otherwise be spent waging a bitter battle if things don't work out as planned (as will be the fate of at least 50 percent of all marriages). 

For example, a well-written prenuptial agreement can ensure children from prior marriages are protected according to your wishes should something happen to you. They can also shield both parties from joint liability debts. So for example, if the wife is the subject of a malpractice claim, a prenuptial agreement could protect her husband from extensive legal responsibility should she lose that case, thereby preserving assets for both spouses. Additionally, the contract can be beneficial in terms of titling marriage assets for the purposes of estate tax planning. 

But of course, broaching the subject of a prenuptial agreement remains a delicate subject. Even for a couple who talks about everything, simply raising the subject for discussion can be thorny. So what is the best way to go about it?

First, we recommend raising the issue shortly after the engagement. In an ideal world, this is something that would be negotiated and signed well in advance of the wedding invitations going out. Bombarding your intended with an agreement in the days or even weeks before the ceremony can make them feel as if they have been ambushed. This is no way to begin your journey together. You want to both be on the same page and comfortable with the terms of the agreement. Neither of you should sign anything until the agreement has been reviewed by two separate attorneys - one representing each of you - to ensure the agreement is mutually beneficial and each of your assets and interests are protected. 

Secondly, when you approach the conversation, make sure you are honest and forthright. Perhaps you have a family history of nasty divorces. Maybe you have children from a prior marriage and you want to make sure they are protected. In some instances, you may have an inheritance you want to shield. Whatever the case, be open. Your new spouse will respect you more for it and it will likely make the process move more smoothly. 

Bear in mind also that another reason to be upfront is that there has to be full disclosure in order for a prenuptial agreement to be considered valid. That means you are going to have to let your new spouse know how much you earn, how much you're worth and the extent of your assets. Again, ideally these would be discussions you would have already had, but at the very least, you will have to disclose them prior to signing the agreement. Keep in mind that if your spouse doesn't acknowledge certain property as separate at the time you married, he or she can always come back and later claim it was marital property, meaning it could be subject to division.

Be prepared for some level of negotiation. Try to approach this with a mature and open mind and with the legal advice of an experienced family law attorney. This means you will need to consider too any possible changes up the road. For example, both parties may be self-sufficient at the moment, but it's possible that once children come along, one could choose to become a full-time, stay-at-home parent. Your agreement should encompass these kinds of contingencies. 

Finally, do your best to be reasonable. Remember: This is the person you want to spend the rest of your life with. A good prenuptial agreement will ensure that both parties walk away happy - and together. 

If you are interested in learning more about how to draft a prenuptial agreement in Brooklyn, call our offices at (718) 864-2011.

Additional Resources:

How to Request a Prenuptial Agreement and Still Get Married, Jan. 24, 2014, By Daniel Clement, The Huffington Post

 


Friday, October 18, 2013

Brooklyn Cohabitation Agreements on Rise With Decline of Remarriage Rates

Increasingly, those who have been divorced or widowed are opting out of second or third marriages. 

However, that doesn't mean they are ending up alone. Instead, new analysis of federal data by USA Today indicates that more often, couples are opting for cohabitation. 

It's certainly understandable, particularly following a bad experience, that people would avoid taking another plunge. But that doesn't mean you can't put some legal protections in place that will help to shield both of you in the event of a nasty break-up. In Brooklyn, cohabitation agreements serve to outline both parties' rights, responsibilities and boundaries in the event of a death or break-up. 

Unlike a prenuptial agreement, there is no promise or expectation of marriage - and that is just fine for a growing number of couples. 

At the National Center for Family & Marriage Research at Bowling Green State University, researchers say remarriage rates in the U.S. have plummeted by 40 percent over the last two decades. Researchers found that this was true regardless of age. 

The data compared remarriage date from 1990 with that in 2011. Back in 1990, 50 out of 1,000 divorced or widowed persons sought remarriage. By 2011, that figure reached 29 out every 1,000 divorced or widowed individuals. 

While researchers found that remarriage had become less popular for all ages, it was losing traction with those under the age of 35, where a 55 percent decline was noted among those 20 to 24. Those 25 to 34 saw a 40 percent drop. 

There are believed to be two major factors here: cohabitation and older age at the time of the first marriage. 

Today, the average age of a first marriage is 27 for women and 29 for men. That means that at the time of divorce or widowhood, they may be well into their 30s or 40s, and not eager to jump into a new marriage. 

Cohabitation is also a major factor. When we look at what cohabitation meant a generation ago, it was akin to "living in sin." That's not an attitude we see much anymore. 

Neither do LGBT relationships have the same kind of taboos associated with them that they did years ago. That has also played a role.

Census data from 2012 shows that there are approximately 7.8 million people cohabitating together, increasing from about 5 percent of couples in 1990 to nearly 12 percent in 2012. Of those, nearly 40 percent have been married before. 

A number of couples have cited concerns about whether it's possible to make a remarriage work. We do know that remarriages are more likely than even first marriages to end in divorce. That has people wary. 

First marriages have the advantage of allowing couples to define what marriage is to them, to establish an internal culture. Second marriages tend to be harder because, with children, parents area already deeply bonded and there is a rhythm, a routine and culture that is already established. For an outsider to come in is not impossible, but it's certainly tough. 

Still, that doesn't stop people from spending years if not decades or the rest of their lives living with their new loves. 

However, there is a common misconception that long-term cohabitation simplifies things. There is a belief that if things end, they won't need to involve lawyers or litigation or messiness. But the truth is, cohabitation, as opposed to marriage, reduces your legal rights under the law. If you share any property or debt or assets, dividing it up gets to be much tougher and, in some cases, less fair. 

This is where cohabitation agreements can be so valuable. They provide the protection, without the commitment. 

If you are interested in drafting a Brooklyn cohabitation agreement,, call our offices at (718) 864-2011.

Additional Resources:

Remarriage rate declining as more opt for cohabitation, Sept. 12, 2013, By Sharon Jayson, USA Today

More Blog Entries:

New York City Divorce Lesson's From a Billionaire's Split, Sept. 6, 2013, Brooklyn Cohabitation Agreement Lawyer Blog


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