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Writer's picturePaul Premack

Cohabitation Agreement can avoid implication of marriage

 

He owns an Airplane.
He owns an Airplane. Is it Community Property?

Dear Mr. Premack: I own two houses, a business, a plane and a boat. I don't want to get married, but my girlfriend of several years wants to move in with me and has hinted at marriage. I am asking various lawyers and my CPAs, and I want to ask you: Are there estate planning legal tools that will protect my financial assets if we decide to move in together? SS from Seattle


Both Texas and Washington State are community property states, so as soon as you get married the default law starts creating community property assets. The same is not true when you simply share a residence. While you are unmarried, your assets remain your separate property, and her assets remain her separate property.


The real issue under the laws of both states is: how does a marriage happen?

First, the traditional idea of a formal marriage – getting a license and being married in a civil or religious ceremony – creates a valid legal marriage in both states.


Second, in Texas, the law provides for informal marriage, sometimes called common law marriage. You are married if you reside together, agree that you are married, and tell others that you are married. This is as legal and valid as a formal marriage. It initiates the creation of community property and other spousal rights.


Third, in Washington, while there is no common law marriage, there is a legal doctrine known as “committed intimate relationship” that may be based on a registered domestic partnership or on a less formal but “marriage-like” relationship. If you live together continuously for a significant time, you pooled resources, and you acted like a married couple, then Washington law may treat you as married. That means that if you separate, she can file for divorce and seek a property division.


The solution, in either state, is to enter into a written agreement that clarifies the situation. We call them “cohabitation agreements”. In the agreement, you make it clear that you are living together for your joint convenience and pleasure but that you do not intend to marry, have not agreed to marry, and will not tell others that you are married. You can also specify the terms of occupancy.


Since you own the house, having someone else reside there creates legal issues. Are you liable for her personal property if there is a fire? Will she follow the law, avoiding bringing drugs or other illegal activities into the house? What if she has a guest who falls down and is injured? What if you decide that it is time to end the relationship, ask her to leave, and she refuses to move? What if all goes smoothly, you get serious, and decide to enter into a formal marriage?


The cohabitation agreement should make it clear that she has the status of a tenant. She should have her own renter’s insurance to cover her personal belongings. She should indemnify you against harm to anyone she invites into the house (even so, your homeowner insurance should cover injury to a visitor). You should agree that you are not married and are not in a marriage-like relationship, and that consequently there is no community property. The agreement’s terms which keep your assets separate should be updated but will also continue to be valid if you later enter into a formal marriage.


Work with an experienced Estate Planning attorney to draft the legally binding cohabitation agreement. Do it before she moves into your home.

 

Paul Premack is a San Antonio Certified Elder Law Attorney, handling wills and trusts, probate, and business entity issues. View past legal columns or submit free questions on legal issues via www.Premack.com.


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