The Financial Effects of Cohabitation Agreements When the Parties are Married or Not Married
Today, it is very popular for unmarried couples to live together. Some of these couples eventually opt to marry, while others break up and go their separate ways or choose to live together without marrying for years or even decades. These couples do not get to take advantage of the benefits that married couples receive, such as the automatic joint ownership of the property that is obtained during a marriage. However, many of these couples do own property together and when an unmarried couple with property decides to end their relationship, issues regarding the property’s ownership and each partner’s right to the property can arise.
To address these issues before they arise, many couples opt to sign cohabitation agreements. Like a prenuptial agreement, couples can use a cohabitation agreement to determine which party will retain specific assets if the couple ends their relationship. They can also be used to specify the financial obligations that each partner has to the household and to the other party.
Financial Issues to Consider If you are Not Married
There are many financial issues that cohabitating couples should consider regarding their property. Some of these issues include:
How each partner’s assets will be divided in the event of his or her death. Generally, a deceased individual’s spouse receives his or her assets unless another recipient is specifically named in the deceased’s will. When the deceased individual was not married, his or her partner does not have this automatic right and to receive anything, must be named in the deceased’s will.
Each couple’s share of the home. If a married couple purchases or builds a home, their home is considered to be marital property and thus subject to New Jersey’s equitable distribution law if they divorce. When an unmarried couple buys or builds a home, they must create a document stating whether they have a joint tenancy, where each party owns 50% of the house and in the event of a death, the surviving party takes ownership of the deceased’s share, or a tenants-in-common agreement, where the parties’ shares do not have to be equal and in the event of a death, the deceased party’s share becomes part of his or her estate.
The tax benefits that married couples receive.
How cohabitating or remarrying can affect one’s alimony agreement. In nearly all cases, an individual who receives alimony from a former spouse loses his or her right to receive these payments once he or she remarries. In many cases, this also happens if the individual moves in with a new partner.
For more information about your financial rights with a cohabitation agreement or if you are married, call The Law Office of Eric B. Hannum Esq., LLC. at 732-370-9596 to discuss your legal needs with one of the experienced divorce attorneys at our firm. We can answer your questions and represent you if your case, whether it is a dispute over a cohabitation agreement or a divorce, goes to court.