A Horrible End to a Beautiful Beginning – Cohabitation Nightmare

Non-married couples - What is a cohabitation agreement by Hammerle Finley Law Firm

So you want to live with someone to whom you are not married?  We call that “cohabitating” or “inviting a lawsuit.”

Whatever.

Cohabitation is legal, but that does not mean it is a relationship you should leap into lightly.  Before you make the move, you should consider the cautionary tale of Stephen Carl Smith and Mary Deneve.

Smith and Deneve began living together in 1991. They neither married nor signed a cohabitation agreement. In 1998, they moved into a house in Dallas and titled it in Deneve’s name only. In 2003 they bought a boat; this too was titled only in Deneve’s name. When they separated in 2005, Deneve asserted that she owned the house and the boat.

That apparently did not go over well with Smith. He claimed they had a common-law marriage, filed for divorce, and asserted he was entitled to his half of the property. (This, by the way, is a fairly common tactic).

Perhaps worried that his marriage claim was questionable, Smith creatively piled on more legal theories that might give him an interest in the property: implied cohabitation agreement, constructive trust, partnership/joint venture, quantum meruit and resulting trust.

This was a lawsuit on steriods. Smith’s legal theories were solid. Unfortunately, his facts were not. He lost. No house, no boat, no divorce, no partnership, no to any of the other theories pled.

What is instructive, however, is that those causes of action exist and could be used by any disgruntled former cohabitant against an ex.

What is Cohabitation?

Cohabitation is a relationship that anyone can enter into at any time without formalities. It carries none of the protections or rights of marriage.

That leaves both parties vulnerable. Without some type of writing, neither party has a right to make medical decisions for, or inherit from, the other. And while the parties can simply walk away from their relationship at any time, there are no legal guidelines for dividing their property or joint obligations such as rent.

What is A Cohabitation Agreement? And How Does it Work?

So what could a cohabitant do to get some type of legal protection?

If both parties were willing, they could sign a written cohabitation agreement. It should be done with the same formalities as a marital agreement. At a minimum, it should state that the parties are not married and agree not to create a common law marriage, specify who owns what assets and how they will be divided in the event of a break-up, and make provisions for any jointly owned property or joint debt.

Each cohabitant should also have a personal set of documents – a will, powers of attorney, a HIPAA release and a designation of burial agent. These are important to either include, or exclude, the other cohabitant as an agent or beneficiary.

If a cohabitant owns a decent amount of assets,  then he or she should consider creating a trust and moving those assets into it. That, at least, gives a fighting chance to keeping those assets intact if the relationship ends.

Do you have to do this before cohabitating? Of course not. Should you do this? Of course you should. Money, sex, love – what is there not to fight about?

Get Legal Assistance for a Cohabitation Agreement at Hammerle Finley Law Firm

Virginia Hammerle is a Texas attorney whose practice includes estate planningguardianship and probate. Sign up for her newsletter at legaltalk@hammerle.com. Contact Hammerle Finley Law Firm to schedule a consultation at hammerle.com.

This column does not constitute legal advice.