Think of a Cohabitation Agreement as a prenuptial agreement for people who intend to live together but do not want to be considered common law married. As we have discussed in the last several blog posts, Colorado is one of 16 states that recognizes common law marriage. If a couple (and this applies equally to gay couples now that gay marriage is legal in Colorado) wants to live together without being considered “common law married” they should consider preparing and signing a Cohabitation Agreement.
Generally there are three types of conflict avoidance agreements that can be employed in the family law area: Prenuptial Agreements, Postnuptial Agreements and Cohabitation Agreements. The first two deal with the marital relationship while the third one deals with unmarried couples who only intend to live together and do not intend to marry. So, why would a couple ever want to enter into a cohabitation agreement? The answer is to protect property and assets.
If a couple that is living together is considered by the Colorado courts to be “common law” married, then all of the marriage and divorce laws of Colorado will apply to them, including the division of all of their property, debts and even the awarding of alimony or spousal maintenance. (See the prior two blog posts for a more detailed analysis of common law marriage.) This can come as quite a shock to one of the parties if they just thought they were living together with no strings attached and now half of their property is divided or they are ordered to pay the other party’s debts or pay them alimony. A Cohabitation Agreement can avoid a lot of these problems.
The purpose of an enforceable Cohabitation Agreement is to allow the couple to set out how they intend to resolve financial obligations while they are living together and to set out in writing how they will divide up any assets and debts when the relationship ends. Usually one party has more assets than the other and that is what may be the motivation behind seeking a Cohabitation Agreement.
To be enforceable, the parties to a Cohabitaion Agreement must have been very forthcoming to the other party about all of their assets and debts. In other words the courts will require full disclosure before they will enforce the agreement. As part of that full disclosure, the courts will require that one party not have been coerced into the agreement. The best way to avoid these problems is to make sure that both parties to the agreement have their own attorneys to advise them.
If one of the parties cannot afford their own attorney, rather than have just one attorney represent both of them, it is better if the party with the assets or income pay for the other party to have his or her own separate and independent counsel to avoid any problems with conflict of interest. That way the disclosures that both parties make about their income, assets and debt will be more likely to be considered full disclosure if the other party’s attorney has been involved in the drafting of the agreement and the providing and receiving of the disclosures.
Colorado courts will apply general contact law and equitable principals when deciding if a Cohabitation Agreement is enforceable. If you think you might need a Cohabitaion Agreement or the person you are thinking of moving in with is asking for one, give us a call. Our experienced Colorado attorneys can help you with the agreement.
Cohabitaion Agreements can also help a couple to decide before moving in together how they will do such things as divide up the rent costs, whether they will have a joint bank account, who will pay what bills, etc. It can be a valuable exercise to go through to avoid conflict later. It also makes it clear to the rest of the world that you are only living together and do not intend to be considered “common law married.” It is also very valuable if you intend to buy real property together or do any other kinds of business or financial ventures together. Finally, a Cohabitaion Agreement can keep you out of divorce court and protect your separate income and assets.
Many couples who decide to live with each other have been married before and may have divorce decrees or support obligations that they are dealing with. A Cohabitation Agreement can deal with these issues and set out each party’s rights and obligations to former spouses and children and keep the other party from getting drug into those kinds of issues. However, remember that a Cohabitaion Agreement cannot set forth anything with regard to children of the cohabiting couple. If you live together and have children together, a divorce court will have to decide all issues with regard to child custody and child support and the Cohabitation Agreement will not be binding with regard to those issues regarding children.
A Cohabitaion Agreement can take into account if the parties ever do decide to get married. Usually the issues to be decided in a Cohabitaion Agreement include, but are not limited to: separate and joint property and how to distribute each upon termination of the relationship; income compensation matters; expense allocation and responsibility for debts; dealing with real property ownership and distribution; and statements that the parties do not intend to be considered common law married.
If you have any questions about Cohabitation Agreements, common law marriage or prenuptial or post nuptial agreements or any other family law matters and wish to discuss any of this with one of our experienced Colorado attorneys, feel free to give us a call for a referral. The initial consultation is always free. Give us a call at (720) 457-5959 or http://familylawattorneyindenver.com