The Risky Business of Living Outside the (Marriage) Box

It’s not just your parents—your state wants to see you settled down and married. 

State laws incentivize marriage and offer hundreds of statutes that confer protection on married persons ranging from spousal support after separation, property rights (and other laws that presume property acquired during marriage is a joint asset)  to tax perks such as the exclusion of gift taxes for transfers between partners and protection from disinheritance upon death.  Thanks to a California case and the recent United States Supreme Court Decision, San Francisco values have gone mainstream, and now same-sex couples nationwide have similar incentives (or pressures, depending on who you ask) to formally and legally get married.

Marriage Rates are Decreasing

As our matrimonial laws continue to expand, fewer and fewer people are stepping up to the altar. By 2014 the share of married Americans dropped to 50%, down from 69% in 1970. Since 2000, unmarried cohabitating couples have grown by over 40% in the United States and over 40% of our children are born to unmarried couples. Despite the ‘diamonds are forever’ marketing, the U.S. has the highest divorce rate in the Western world and statistics show that after a year and a half of cohabitating, fully half of cohabitating couples have either married or broken up.

The standard marriage model is not user-friendly to millennials, almost half of whom support an “opt-out” model involving a two-year trial run—at which point the union is formalized or terminated, without any paperwork.

Americans are not growing afraid of commitment. Instead, millennials understand their relationships are not like their parents’. And they don’t have to be. In 1976 the California Supreme Court suggested, “Some couples may wish to avoid the permanent commitment that marriage implies, yet be willing to share equally any property acquired during the relationship.” Millennials avoid marriage not to avoid commitment. Instead they are avoiding a multi-thousand, multi-year Divorce Inc. institution. No longer taboo, the rate of unmarried romantic (and committed) cohabitation has increased 1,000% over the past decade. Generations reared by choice and options are ‘disrupting’ how stable relationships are formalized.

Living Outside the Law

Cohabitation comes with dangerously little protection. While married couples unknowingly enter into a complicated economic contract based on legislative algorithms for what’s fair, cohabitants face the other extreme. If two people buy dishes, pick out sofas, and commingle their resources — upon separation they are largely treated as familial strangers. There are no duties and presumptions for cohabitants, and there will be no reimbursement for mortgage contributions made towards your ex-roommate’s home. California and many other states do not have any form of “common law” marriage, so unmarried couples who separate after living together and ‘acting’ married have to be much more creative, and potentially employ financial planners, trusted friends, and mediators to help sort out finances.

The solution: an individually tailored cohabitation agreement. 

The alternative is walking away with nothing, mediation, or an archaic and expensive civil litigation system that treats unmarried exes as business or real estate partners (at best). A landmark California Supreme Court case, where the judge acknowledged couples shirking commitment, opened the door for romantic cohabitants to seek spousal support and property division in non-marital break-ups. After six years of living together, Ms. Marvin (a Hollywood C-lister) changed her surname, gave up rising fame to be a homemaker (no kids), and thought Mr. Marvin (an Academy award winning villain) orally promised to support and share his earnings. After their break up got to the state’s highest court, Ms. Marvin was unable to prove the existence of a contract which entitled her to a division of property (which would have been deemed community had she been married). The privileges of married people were not transferrable to those who choose not to marry. But the Court invited future cohabitants to prove the existence of an express or implied contract to get what Ms. Marvin could not.

A cohabitation agreement guards against the unknown – it can solidify expectations, provide protection to a partner who sacrifices career to tend to children, protect separately owned property, provide scaffolding for jointly owned property, provide for support (‘palimony’) post separation, and/or minimize financial exposure to the higher earner. This clarity (and express confirmation) would have helped Ms. Marvin determine:

  • How will income and expenses be allocated in your relationship?
  • Will you pool assets and wages?
  • Will both parties be responsible for paying bills equally or proportionally?
  • Will property acquired during the relationship (think: stock options, cars, loans, retirement contributions, houses, etc.) become joint or stay separate?
  • Will palimony (post non-marital break-up support) be paid or received?
  • If one party sacrifices economic growth to raise children or support the other’s career, will s/he be entitled to financial assistance or a break-up transition payment to become self-supporting?
  • If a house is purchased during the relationship, how will title be held and how will the parties build their respective financial interest in the real property?

As goes California, so goes the nation—but California is not going anywhere. When it comes to cohabitation, California is following along. The state is constitutionally bound to recognize an out-of-state common law marriage, but fewer and fewer states are allowing it. Six states recently abolished it (most recently Alabama in 2017). One national outlier is Washington State, where cohabitants have similar property rights as marital partners. In those few states where common law marriages are legal, there is no such thing as a ‘common law divorce.’ Couples still will have to convince a judge that medical records, sleeping arrangements, and holiday cards sufficiently prove a ‘marriage’ existed and equitable division of property is warranted.  Small and intimate details of a couple’s life will make their way into the public pleading file.  Often times, the economically disadvantaged spouse will argue for a marriage, and the higher earner will claim no partnership existed at all (just like our California cohabitation anti-hero Mr. Marvin).

Proving a Marvin relationship is an uphill battle because courts like clean rules. Unlike divorces where separating couples must initiate a legal process to disentangle their finances, unmarried cohabitants do not have the benefit of a code specifically tailored to (almost) all issues that come up when dissolving their union and/or a dedicated forum to resolve them in.  Providing your implied contractual intentions (one way to show a

Attempts to innovate the marriage model have not been successful. In 2011 a Mexico City legislator proposed a two-year temporary beta marriage. Religious leaders, battling a simultaneous attack on “traditional values” from marriage equality advocates, protested the proposal. In June 2017 the United Kingdom’s President of the Supreme Court Lord Neuberger delivered a keynote speech on the “plight of the unmarried.” Across the pond, the U.K. Supreme Court effectively killed off the possibility of property rights for domestic purposes.

Californians wanting the rights of married people must get married. Or, in the alternative, a carefully crafted cohabitation agreement with experienced lawyers to not only memorialize expectations, but provide for a method of resolution for disputes that arise post separation. At some point, the Family Law community will need to look long and hard as to whether it makes sense to expand the Family Code to include more rights and obligations for romantic cohabitants or, at the very least, provide a more streamlined method for resolving the implied and express contract disputes that sometimes arise.


What the Heck Is a Cohabitation Agreement?

Some couples decide that marriage is not right for them (or not right for them yet) but still live together, have children, buy a home and make joint financial decisions.  This is happening increasingly with millenials who are waiting longer to marry or deciding not to marry at all. A cohabitation agreement (or “cohab”) is a contract that couples can use to define financial structures, responsibilities and agreements that will apply to their relationship.  If the relationship ends, the contract provides structure for how financials obligations, real property division and other assets and liabilities will be addressed. These discussions often happen between couples that live together but in the absence of a written cohabitation agreement many non-married couples are left with unclear and challenging legal options if they break up.  They are not able to avail themselves of the family court for property division or support issues, despite having potentially made significant joint decisions in their relationship; and they do not easily fit into a civil court system that is difficult to navigate and handles property issues without considering the relationship aspect of a couple’s history.  

Living with someone or planning to move in?  Contact us to talk about if a cohab agreement would be wise for you and your partner.


Why You Might Want a Prenup (And Not Even Know It)

By Ashley Schuh, Co-Founder of Love & Real Life, Certified Family Law Specialist, Mediator and Problem-Solver

Originally published at A Practical Wedding

Why You Might Want A Prenup (And Not Even Know It)

First, we are happy you are in love (hooray for love!). Even though we have spent the last 13 years working as divorce attorneys, we believe wholeheartedly in love and relationships. We want yours to be perfect for you and we want it to last.   

We are going to address some common misconceptions about premarital agreements but first, a little lesson on the law.  

 Did you know that when you get married there are laws that say what will happen if you get divorced? Legislators have created a system that they believe is “fair,” and it applies to everyone who gets divorced and doesn’t have a premarital agreement. So basically, if you don’t have one, some legislators (mostly white men) have written one for you. That’s right. You already have a prenup — you just didn’t write it. In fact, you probably don’t even know what it says.  

 The system actually can be fair — but not always and not for everyone. And certainly not if you didn’t know what the rules were when you entered into marriage. Would you ever play a game without knowing the rules? Probably not! But getting married without knowing these rules is doing exactly that — and in this case, it can hugely impact your life.  


Each state has different divorce laws, but the two main categories of marital law are equitable distribution (most states) and community property (a handful of states).  I am licensed in California, which is a community property state. 

To dramatically oversimplify the “rules” in California, everything (with a few exceptions) that is acquired (like a house), earned (like income), saved (like money), accumulated (like retirement benefits), or incurred (like credit card debt) from your date of marriage belongs to both you and your partner — no matter in whose name it is held. That means that if you and your partner decide to divorce, all of the assets and debts are put in one big pot and divided in half. A lot of times, this is not how married people operated around finances during their marriage.  

In equitable distribution states, assets and debts are treated a bit differently.  Everything acquired, earned, saved, accumulated or incurred during marriage belongs to the person who acquired it or in whose name it is held.  If an asset or debt is held in joint names, then it belongs to both spouses.  But, even if an asset isn’t held in your joint names, a spouse has the right to claim a marital interest in the value of the asset.  In the event of divorce, marital property will be divided in a “fair and equitable manner,” and there is no set of rules determining who receives what or how much.  Many factors can be considered including length of the marriage, age and health of the spouses, relative earning contributions of each spouse, the earning potential of each spouse, and even the value of one parent staying home and caring for children.

Whether you live in a community property state (AZ, CA, ID, LA, NV, NM, TX, WA, WI) or an equitable distribution state, the default system may work great for you once you know what the “rules” of marital law are.  If you and your partner have discussed it and have agreed that the default reflects the financial structure and values that you want to govern your marriage — meaning you plan on having fully joint finances and, in the event of divorce, you want everything to be divided down the middle (in community property states) or divided in a way that a judge considers “equitable” (in equitable distribution states) — then you don’t need to do anything.  But if the rules aren’t fully in line with your values, you might move to another state or you haven’t had a serious discussion of marital property law, then “prenup” is a word that should be in your vocabulary.


A premarital agreement means you don’t love your partner.

Let’s just get this one out of the way. Why does talking about money or how you will share finances or save or spend mean you don’t love someone? First of all, it means you love yourself enough to have a conversation about expectations and finances. Second, it means that you trust your partner and relationship enough to have that conversation. Third, it means that you realize that marriage isn’t just your wedding and that love is in the everyday, mundane, unglamorous parts of life — like budgets and grocery shopping and retirement planning.  

 A premarital agreement means you are planning to get divorced.

Planning for divorce? We sure hope not! We hope you are dreaming of a happily ever after and that the honeymoon period lasts for years to come. But planning for “just in case” — well, we believe in that, too. Think about it this way; when you drive your car, you don’t plan to have (or not have) an accident every time. You just drive. But you have insurance just in case you do have an accident. And if one happens, you are really, really glad you planned for “just in case.” Premarital agreements work just like that. Once you have one, you don’t have to think about it. But it is there just in case you need it. And if you do, well, you will be glad you have it.

 A premarital agreement means you are all about money.

Actually, many premarital agreements aren’t about money at all — they can be about your grandmother’s pearls or the house you bought before your wedding or even your (privately held) student loans. Through a premarital agreement, you can address any specific issues that the laws of your state don’t handle the way you would like, and you can leave all the rest out. In short, premarital agreements aren’t one-size-fits-all like state laws.

 A premarital agreement isn’t romantic.

Okay, we aren’t going to lie — they really aren’t romantic. A lawyer’s office isn’t nearly as fun as trying on wedding dresses or having a dinner with your honey. But, it is romantic to be able to be in love and feel safe and know that you have had a real conversation about finances and planning. The truth is, you probably have already had a conversation about how you share expenses and continuing that conversation shouldn’t be that big of a deal. It sure doesn’t have to bring the romance to a screeching halt.

A premarital agreement pits me against my partner.

This idea assumes that premarital agreements only benefit one person at the expense of the other and that there couldn’t be a benefit to both of you. I see this in the opposite way. Yes, it is true that you each need to know your rights and obligations under the law and under your premarital agreement — but that doesn’t have to mean the agreement isn’t good or better for both of you or even how you both want things to work. A premarital agreement can (and should) be just that — an agreement — that is tailored to your lives. Both of your lives.  

A premarital agreement is for rich people and we aren’t rich.

It is true that we often hear of premarital agreements for the rich and famous Hollywood set — and it’s true that wildly wealthy people often want a prenup.  But the wise use of prenups is not limited to the wealthy.  First of all, no matter how much money you have (or don’t have), decisions that you make in marriage might not match what the your state law says should happen if you break up. And when you don’t have four homes and millions of dollars, I would argue your money and what happens to it is even more important.

 A premarital agreement isn’t for us because we are young and just starting out.

Hey, that might be true. You might find out what the laws are and                     decide that they work for you and your partner. You both might have nothing but loads of student loan debt and an old car. But I still believe in finding out what the               “rules” are so you can decide whether there is anything you might like to be different.

A premarital agreement simply protects the wealthier spouse. 

Not so! Actually a premarital agreement that ignores the rights of one soon-to-be-spouse may not even be enforceable.  In most states, to have a rock solid prenup, both partners need to be represented by an attorney.  Your attorney can help the less wealthy spouse negotiate terms that feel fair and protect her/him/they from financial devastation should the marriage dissolve.  As an example, the premarital agreement can articulate the amount of spousal support (and/or how alimony will be calculated) should the marriage dissolve. It can also provide that the less wealthy spouse earns an “ownership” interest in property that is held by the wealthier spouse as the marriage progresses.  Finally, signing of the premarital agreement must be “voluntary” and if there are signs that a partner was “forced” to sign “under duress,”  the agreement might be held invalid if ever challenged.  

A premarital agreement can only deal with financial stuff. 

Recently, more and more millennials have asked us to draft Cohabitation Agreements and Premarital Agreements that have terms that make them feel safe opening up to their partner about the good, bad and the ugly without risking that personal exposure should the relationship go south.  A carefully drafted premarital agreement can include terms such as: (1) custody of a pet; (2) a “gag order” requiring both parties to refrain from sharing intimate details (think: mental health, sex videos, etc.) on social media, with third parties or with the press.

A premarital agreement is bad for women.

We call straight-up bulls&*t on this one. Women are amazing, powerful, successful, and smart. Getting married doesn’t change any of that. Whether you are marrying a man or a woman or whether you are (or are planning to be) a badass #girlboss or a badass stay-at-home mom or anything else you dream, you are not defined by your marriage or your partner. No one can make you sign something that is bad for you, right? You are capable of thinking about “what if” without expecting it to happen. And you are capable of planning for “just in case” in a way that protects you. And knowing is the first step toward that. Knowledge is love. Self-love. And we women deserve all the love in the world.

No matter what type of marriage or relationship you are in, knowing and planning what is right for you and your partner is an empowering choice, an exercise in self care and a decision to #lovewise.