Property acquired by unmarried couples may be subject to equitable division by a court after the relationship ends by separation or by death of a party. Cohabitation Agreement can permit parties to create their own rules for the characterization, treatment & disposition of property.
1
Meretricious Relationship Doctrine
Historically, this is known as the “meretricious relationship” doctrine; the courts have defined a “meretricious relationship” as a stable, marital-like relationship where both parties cohabitate with knowledge that a lawful marriage between them does not exist. Relevant factors that a court will use to determine whether a meretricious relationship exists include whether the parties continuously cohabited the duration of the relationship, the purpose of the relationship, whether the parties pooled resources for joint projects, and the intent of the parties. A relationship need not be long-term in order for the doctrine to apply; a short-term relationship may qualify, depending upon the facts.
2
Division of Property Under the Meretricious Relationship Doctrine
Washington courts have made clear that a meretricious relationship is not the same as a marriage or domestic partnership, and that the laws involving the division of marital or partnership property do not directly apply to a meretricious relationship. For example, in proceedings to dissolve a marriage or domestic partnership, the separate property of one spouse or partner may be awarded to the other party; in a meretricious relationship, the separate property acquired by either party prior to the relationship is not subject to division. Only assets that would have been characterized as community property had the parties been married or in a registered domestic partnership, is subject to division by the court. However, as mentioned above in the context of prenuptial agreements, depositing separate property into a joint account or using joint property to improve the separate property of one party may make it difficult to determine if an asset has retained its separate property status.
3
The Law as it applies to Cohabitation Agreements
While the case law regarding cohabitation agreements is not as well developed as in the area of prenuptial agreements, courts tend to favor agreements that reduce the likelihood of litigation. It is also reasonable to assume that the guidelines established for creating a valid prenuptial agreement should be followed when drafting and executing a cohabitation agreement; in other words, the agreement is much more likely to be upheld by a court if it is both substantively fair and procedurally fair. Care should be taken to avoid the possibility that either party will later claim he or she was rushed into signing, and each party should be represented by independent legal counsel.
4
Wills or a Revocable Living Trust can effect a Cohabitation Agreement
As with a prenuptial agreement, parties to a cohabitation agreement should make arrangements for disposition of property after death, such as through a Will or Revocable Living Trust, in order to ensure that the deceased party’s property passes to his or her intended beneficiaries.
Comments - add comment