As stated in Dixon & Moseley, P.C.’s blog post of February 25, 20191 (read it here) the idea of cohabitation between partners has become common in the United States. Couples may cohabit for a variety of reasons – younger individuals are choosing to cohabit before marriage at an increasing rate; partners with children may choose not to marry for a variety of reasons; some who have been “burned” by a past marriage may vow never to get married again but have found a new partner with whom they enjoy sharing their life; some may want to avoid the expense and stress of a wedding. As identified in that blog post, cohabitants sometimes need to take precautions so that they are protected, and their wishes are carried out in case the relationship fails, one cohabitant passes away, one cohabitant becomes incapacitated, or a variety of other scenarios. This begs the question, if two cohabitants are not married, how can they accomplish these goals? The answer may be entering into a cohabitation agreement. The following blog post outlines just some of the issues that cohabitants may face as they try to document their personal wishes and protect themselves.
The law on cohabitation agreements is not well-developed. Since marriage has been a “traditional” path for many, cohabitation agreements have simply not been challenged and taken up on appeal as readily as have divorce cases. Moreover, for agreements such as antenuptial/prenuptial agreements, there are very specific steps that couples must accomplish for an agreement to be enforceable (for example, each person in the relationship must disclose the entirety of their assets and liabilities (debt)). These agreements are often challenged after a divorce by the party who feels that the antenuptial/prenuptial agreement was “unfair,” so there is a significant body of law covering those types of agreements. Because long-term cohabitation has become more prevalent in the last several years, the law has not quite caught up with the trend.
Because the law on cohabitation agreements is not well-developed, more traditional notions of a contract should be considered. Under this theory, cohabitation agreements may look more like business contracts than an agreement between two individuals who care about each other and want to live together. One of the main elements of an enforceable agreement is called consideration. In its simplest terms, consideration meaning giving up something and getting something in return – for example, if you buy something, you give up your money while obtaining the item that you want, and the seller gives up the item while obtaining your money. This concept becomes trickier when two individuals are living together and are in a relationship. For one, the consideration cannot be against public policy – specifically, the contract cannot be for sex.2 Second, the contract cannot be illusory – meaning that the contract cannot look like the parties are both giving up something when they may not actually be doing so. For example, if Partner A3 states that he/she will give Partner B $1000 per month, so long Partner B agrees to his/her partner, Partner B is not really giving up anything – Partner B was Partner A’s partner before the deal was reached.
A stronger agreement would look something like the following:
Partner A agrees to provide Partner B with $1000 per month and to allow Partner B to live in Partner A’s house. Partner B agrees to perform all maintenance on Partner’s A’s house, pay for home insurance, and to supervise and care for Partner A’s dogs while Partner A is at work. Also, in exchange for Partner B’s contribution to the house, should Partner A and Partner B end their relationship, Partner A will provide Partner B with one-quarter of the purchase price of the house, and Partner B will then vacate the house within seven (7) days of the end of the relationship.
Cohabitation agreements have been held to be enforceable. Despite some of the potential pitfalls that may arise in creating a cohabitation agreement, courts have found them enforceable. A couple of examples follow:
Poulimas v. Ewing, 900 N.E.2d 84 (Table) (Ind. Ct. App. 2008): In this case, the Indiana Court of Appeals recognized the existence of a joint cohabitation agreement entered between the parties and used it in the division of property between Poulimos and Ewing after the couple split up. They were never married but had purchased a home together prior to their break-up.
Hemingway v. Scott, 66 N.E.3d 998 (Ind. Ct. App. 2017): Boyfriend and girlfriend signed a contract where boyfriend agreed to convey his house to himself and his girlfriend as joint tenants so long as girlfriend (1) contributed to the house’s maintenance and costs, and (2) did not cheat on him. If girlfriend did not contribute or cheated on boyfriend, she agreed to reconvey her interest in the property. Girlfriend then became pregnant by another man. Girlfriend moved out and then filed a petition for partition of the property (e.g. a “split”). Boyfriend counter-claimed and sought a court order forcing girlfriend to execute a quitclaim deed in his favor pursuant to the contract. The trial court found that girlfriend breached the contract, and she was ordered to convey her interest back to boyfriend. The Indiana Court of Appeals found that the contract was enforceable and that girlfriend, at the very least, breached the contract by failing to contribute to expenses after she moved out, and it upheld the trial court’s decision.
Other legal theories and concepts may be helpful. Sometimes, to effectuate a desired result if a cohabitation arrangement should terminate, the parties in the relationship can title their shared property in such a way as to effectuate their wishes (joint tenancy, tenancy in common, tenancy by the entireties, joint property, etc.). Each of these terms typically defines the parties’ rights in the property, each parties’ ability to make improvements or transfer the property, and what happens in the event of one of the parties’ deaths. Additionally, creating a basic estate plan may very well help effectuate the parties’ desires. Lastly, a creative attorney may even be able to draw from the Uniform Partnership Act to effectuate the wishes of cohabitants. Having an attorney with a comprehensive background in these areas may be able to draw on various areas of law to best serve your interests.
There are many other issues that cohabitating couples may want to address to protect themselves and to outline their goals as their relationship develops over time, and the attorneys are Dixon & Moseley, P.C. attorneys are accustomed to using their creativity and experience to serve their clients. Dixon & Moseley, P.C. attorneys’ practice throughout the State of Indiana and understand the issues surrounding a couple that wishes to grow and live together without getting married. This blog post is written by Dixon & Moseley, P.C. attorneys and is not intended as specific legal advice or a solicitation for services. It is an advertisement.