Monster Media 1993 #2/Image.iso/images/zodiac_1.zip/COHABIT.ZIP/COHABIT.TXT

Text File | 1987-01-09 | 31KB | 780 lines

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     * PROMISES, PROMISES -- AGREEMENTS FOR UNMARRIED COUPLES *
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     (c) COPYRIGHT 1984, 1986 Dorothea Kaplan
     All rights reserved

            INTRODUCTION BY PAUL BERNSTEIN, SIGOP, LAWSIG

    When it comes to legal matters, consumers of legal services are able
to engage in a great deal of self-education.  The more knowledge
consumers have, the less time a lawyer must explain basic concepts.
The less time devoted to basic concepts, the lower the legal fees.
The purpose of this presentation by Dorothea Kaplan, an Illinois
lawyer writing for Illinois citizens, is to introduce a particular
topic to the public, to attempt to educate the public as to
concepts, principles and ideas, but NOT to render legal advice.  The
issues raised in this article are serious and those who may wish to
consider a document or documents in this area are well advised to
consult competent counsel.  Discussions of the concepts presented in
this article are invited and can be held on a Source Bulletin Board
or in Parti.  The education presented by this article and others in
this series should allow informed consumers to reduce to a minimum
the costs and expense of having counsel assist in such matters.


       THE NEED FOR AN AGREEMENT BETWEEN UNMARRIED COUPLES

Promises exchanged between people who marry are different from those
of people who cohabit. Certain property rights automatically arise
upon marriage that will never exist for cohabitants. These marital
property rights include the right of inheritance, the right of
property ownership no matter which spouse funded or holds title to
the asset, and the right to financial support both during, and often
after termination of the marriage. It is the exchange of promises
dealing with the alternation of the state enforced marital property
issues that are fundamental to a pre-nuptial agreement. On the other
hand, the cohabitation agreement creates rights and obligations
between persons having no legally-recognizable relationship where
these rights and obligations would not otherwise exist.



        PROTECT YOURSELF!  THAT'S THE MESSAGE OF THIS ARTICLE

If this article has a message, it's protect yourself, protect
yourself protect yourself!  Whether you are a mature woman setting up
housekeeping with a pensioner or a young adult in the throes of your
first live-in experience, the ready to use Cohabitation Agreement,
with explanations, printed here, removes potential areas of economic
conflict or even disaster that can throw a whammy into an otherwise
blissful relationship. Essentially, the Living Together Agreement
sets up a clear blueprint for dealing with the parties' legitimate
financial concerns during cohabitation. Married persons have an
agreement written for them by state law, but cohabitating persons
must fend for themselves, developing their own rules against the
backdrop of basic contract law. There are five general areas of
interest to be addressed in the Cohabitation Agreement:



        AREAS OF INTEREST TO BE ADDRESSED IN THE COHABITATION AGREEMENT

1. Ownership of previously held property.

2. Ownership and source of funds for property purchased during
   cohabitation.

3. Income allocation for mutual use.

4. Source of funds for monthly living expenses.

5. Division of jointly owned property and debts upon termination.


Because this Agreement can be so flexible, older persons wishing to
preserve independent property rights can easily do so, while younger
persons wanting to pool their resources, can achieve this desired
end. Cohabitation Agreements also serve the compatible purposes of
keeping some property separate while combining the ownership of
other assets. Maximum legal protection is available once policy
decisions regarding property rights and obligations are made. Even
protection for unborn children can be provided for and should be by
the younger cohabitators.



WITHOUT AN AGREEMENT IN WRITING, THERE ISN'T MUCH HELP FROM THE LAW

Most states, decades ago, abolished common law marriage. And despite
Michelle Triola Marvin's lukewarm stab at gaining palimony from Lee
Marvin based upon an implied contract (where the contract is neither
written nor oral but implied from the parties actions) and unjust
enrichment (where to allow Lee Marvin to gain monetarily from
services performed by Michelle during cohabitation would be unfair
and unjust), most courts will not imply marital property rights, in
a disintegrating live-in situation. Where the parties have not
previously given these rights to one another in a written
cohabitation agreement, courts will not give or create marital
property rights for cohabitators, for to do so would be to resurrect
common law marriages. Therefore, it is contract principles, not
marital relations laws, that give courts the legal reasons to
enforce cohabitation agreements.



    EXAMPLES OF WHAT CAN HAPPEN WITHOUT A WRITTEN AGREEMENT

Other examples, besides the above Michelle Marvin one of persons who
have failed to memorialize their live-in arrangements in a
cohabitation agreement and lost out in court battles, are the
following:

Example one: Victoria lived with Robert for 15 years, helping him
through dental school and bearing three children with him. When the
relationship ended she asked a court for a share of the parties'
property and spousal support. She was given no property and no
portion of Robert's $80,000.00 a year income for her support.
Because Robert acknowledged paternity, child support was awarded.
(A recent New York State Decision may affect this example, but that
is just in New York)

Example two: John, while still married to Sara, entered into a
cohabitation relationship with Ethel which lasted six years and bore
two children. During the six year period, a business was purchased
by John and was worked by John and Ethel.  John died abruptly in a
plane crash while still cohabitating with Ethel. Sara (his wife and
natural heir) received the business, Ethel received nothing. Since
there had been no paternity acknowledgment, Ethel and John's two
minor children could not receive social security benefits nor share
in the proceeds of the successful lawsuit resulting from the plane
crash.

Example three: Barbara and Lee lived together for 17 years. Barbara
worked and contributed financially to the purchase of real estate
which Lee owned in his name alone. When the relationship ended,
Barbara was forced to bring a law-suit to recover her contribution
from Lee. Barbara won the lawsuit, but her legal fees exceeded the
amount she recouped.

If any of these persons had been able to rely on a valid
Cohabitation Agreement, the outcomes of their stories would have
been different. As long as the Agreement deals only with personal or
real property issues and follows the well worn principles of
contract law, the courts will uphold their provisions, even though
an illicit sexual relationship supplies the contract's flavoring.



CONTRACT RULES THAT MUST BE USED ENSURES FAIRNESS TO BOTH PARTIES

FIRST RULE:  CONSIDERATION.

The first rule is that there must be consideration or something of
value given and received by each contracting party. That something
of value can be a promise of any type, except a promise of sexual
services. Sexual promises render the Agreement one for prostitution
and thus invalidate it. Acceptable types of consideration include
mutual promises to pool incomes or keep them separate, promises to
share expenses or keep them separate, and promises to own property
together or maintain independent ownerships. But never can sexual or
even personal services be promised.


SECOND RULE:  FULL DISCLOSURE

The second leg of the Agreement's validity is full disclosure of
assets, debts and income between the parties. This is required so
that each person knows and is fully aware of the other's financial
situation, and is nonetheless still willing to be bound by the terms
of the Agreement.


THIRD RULE:  ABSENCE OF FRAUD OR MISREPRESENTATION

Thirdly, there must be absence of fraud or misrepresentation
inducing one party to enter into the Agreement. If, for example, one
partner tells the second he/she is employed and the second partner
relies on this representation to enter into the Agreement and she/he
then turms out to be unemployed, a fraud has been worked on the
second partner. The terms of the Agreement are unenforcable against
the second partner.


FOURTH RULE:  NO UNFAIR ADVANTAGE TAKEN

Finally, the Agreement is also unenforcable where one party because
of his/her superior bargaining position takes unfair advantage of
the other. The Agreement's promises must voluntarily be made by each
party.

Because cohabitating partners, unlike married persons, must create
their own set of property rights and obligations, they are free to
invent all sorts of terms between one another, as long as they stick
to the above described rules. Armed with the above information, the
sample form printed below, and a knowledge of your mutual financial
management decisions, this Agreement can be written without a
lawyer.

But keep in mind, should you have special needs that deviate from
those expressed here or specifc problems not covered below, these
should be check out with a lawyer before being incorporated in the
Agreement. The sample Agreement below is intended to educate and
provide a guide for those persons desiring a Cohabitation Agreement.
It is not meant to encourage or discourage any person from entering
into a live-in arrangement with someone of the opposite sex, which
may be in contravention of the criminal law in some states.



SIGOP'S COMMENT

(The following agreement was drafted in Illinois and the laws of
your state may be different.  It is recommend by the LAW SIG that
you consult an attorney in the final preparation of any document
having such significant legal ramifications.  The opinions expressed
in this article are those of the author and not the SIGOPs of the
LAW SIG)






                       COHABITATION AGREEMENT

BETWEEN ____________________________________

and ______________________________________.



                      INTENTION OF THE PARTIES

A. The undersigned parties live together (or intend to live
together) are (are not) married as of the date of this Agreement.

B. This Agreement shall identify the parties' rights and obligations
between one another with regard to all financial matters including
but not limited to personal property, real property, debts and
living expenses both previously acquired and those that may
accumulate during the cohabitation relationship.

C. Each party has read this Agreement and understands that all its
terms are binding on both parties.

D. This Agreement cannot be midified in the future except in writing
by the mutual consent of both parties.


                             ARTICLE I

               (PREVIOUSLY OWNED PROPERTY AND DEBTS)

1. Each party has disclosed to the other, all the properties,
assets, and debts owned and owed by each and has informed one
another of his/her income earned and unearned from all sources. It
is agreed that                       shall exclusively
                     WOMAN
own and control the property, assets, and debts specifically
described in Schedule A and that                        shall
                                         MAN
exclusively own and control the property, assets, and debts
specifically described in Schedule B.


                      (ALTERNATIVE ARTICLE I)

1a. It is agreed to that certain assets, property and debts
previously owned and owed by the parties shall become the jointly
owned property of the parties. Those items are that shall be jointly
owned are specifically described in Schedule C. All Schedules are
attached to and made a part of this Agreement.



         COMMENT FOR ARTICLE I AND ALTERNATIVE ARTICLE I

** Paragraph 1 in Article 1 sets a tone of openess for the entire
agreement by affirming that there has been full disclosure of
property, assets, debts and income between the parties.

** In the remainder of Paragraph 1 and in Alternative Paragraph 1a,
it must be decided whether previously owned assets, property or
debts will be separately or jointly owned by the parties.

** Schedules A and B indicate the partners' decisions on separately
owned property and Schedule C reflects which property will be
jointly owned.

** Real property that is included on any schedule should have a
legal description. All schedules should be attached and made a part
of the Agreement.



                             ARTICLE II

                               INCOME

2. Both parties agrees that the wages, salary, and other income of
each whether earned or unearned from any source whatsoever shall
remain the exclusive and separate property of each.


                       ALTERNATIVE ARTICLE II

2a. Both parties agree that the wages, salary and other income of
each, whether earned or unearned from any source whatsoever shall
become the jointly owned property of the parties, except for the
following which shall be the exclusive and separate property of each
and is reflected on Schedule A (and/or Schedule B) attached to and
made a part of this Agreement.

(A)
(B)
(C)


          COMMENT FOR ARTICLE II AND ALTERNATIVE ARTICLE II

** Paragraph 2 of Article II envisions each party keeping their
respective incomes separate, while the following Alternative
Paragraph 2a allows for the pooling of some income and for the
segregation of other income. For example, wages could be pooled, but
dividend and interest income could be separated. Or, only a
percentage of each salary might be pooled while the remainder could
be independently maintained.



                              ARTICLE III

                    (USE OF ONE PARTY'S PROPERTY)

3. Both parties agree that                      shall have full use
of the following property belonging to               during the life
of this Agreement, but that                  shall acquire no
ownership rights therein and that said property shall remain the
separate and exclusive property of                       .

(A)
(B)
(C)
(D)


                      COMMENT FOR ARTICLE III

** One partner may as a matter of convenience or habit use the
automobile, health club membership, or live in the condo unit owned
by the other partner. This paragraph alerts the user, that not
withstanding this gratuitous use, no property or ownership rights
accrue to the non-owner.



                           ARTICLE IV

             (MECHANICS OF PROPERTY MODIFICATIONS)

4. The parties cannot orally change separate property into jointly
owned property or jointly owned property into separate property
without the explicit written approval of both parties. All agreed to
changes must be reflected on the appropriate schedules with each
party initially being changed.


                 COMMENT FOR ARTICLE IV, NUMBER 4

** Paragraph 4 in Article IV continues the intent of having separate
or partly separate and partly jointly owned property, but respects
that there may be future changes that must be made in writing and
also changed on the appropriate schedules.

5. All three (or both Schedules A and B) schedules shall be reviewed
annually by the parties and amended, changed or supplemented to
indicate the true situation between the parties.


                  COMMENT FOR ARTICLE IV, NUMBER 5

** The annual review, required in Paragraph 5 of Article IV, can be
done on the agreement's anniversary date. Changes or modifications
are encouraged so that the agreement can stay in tune with the
parties' true situation.

6. Each party acknowledges having read Schedules A and B (and
Schedule C) and enters into this Agreement fully aware of the extent
and nature of what is contained in each schedule.


                  COMMENT FOR ARTICLE IV, NUMBER 6

** Full disclosure to one another is again recited in Paragraph 6 of
Article IV, this time indicating each person's awareness of what
items appear on the three schedules (or two schedules, if there is
no jointly owned property).



                              ARTICLE V

                     EXPENSES DURING COHABITATION

7. The parties agree that                       , shall pay for all
living expenses and personal expenses of both parties during the
cohabitation. Living expenses include but are not limited to the
following:

A. Mortgage payment or rent
B. Real estate taxes
C. Homeowners or renter's insurance
D. Utilities
E. Home care and maintenance
F. Food
G. Joint entertainment
H. Joint travel
I. Joint auto maintenance and insurance of automobile(s)

Personal expenses include but are not limited to the following:

J. Clothing
K. Medical and dental expenses
L. Medical and dental insurance
M. Grooming, haircuts
N. Extention courses
O. Books, magazines, newspapers
P. Entertainment
Q. Repairs of solely owned appliances
R. Pet grooming and veterarian visits



                       ALTERNATIVE ARTICLE V

7a.  The parties agree to share equally in all living expenses and
to be solely responsible for their respective personal expenses. The
living expenses that shall be shared equally are (same as A-I
above). The personal expenses that will be borne by each
respectively are (same J-R above).


                       ALTERNATIVE ARTICLE V

7b. The parties agree to share responsibility for the following
living expenses in proportion to their respective incomes or as
otherwise specifically agreed upon herein. (Same as A-I above). Each
shall be responsible for his/her respective personal expenses. (Same
as J-R above).


            COMMENT FOR ARTICLE V, NUMBERS 7, 7a and 7b

** Paragraph 7, and Alternative Paragraphs 7a and 7b give the
parties three optional ways of handling their living and personal
expenses. The first paragraph assumes one party will be the sole
wage earner and thus all living and personal expenses for both. The
second option, Paragraph 7a, assumes the partners earn substantially
the same and will share equally in living expenses but that each
will take care of his/her personal expenses. The third paragraph,
7b, allows for pro rata expense contributions based upon
significantly disparate incomes.



                             ARTICLE VI

                     DEBTS DURING COHABITATION

8. Both parties agree that neither shall be obligated for the
present or future incurred debts of the other. Each shall maintain
his/her own credit and charge accounts and each shall hold the other
harmless and pay all costs and fees incurred by the other in
preventing or defending against the collation of any debt. The only
exceptions to this shall be the following:

1. Joint purchases by the parties involving joint charge accounts
specifically opened for joint purchases.

2. Joint overdraft protection where joint checking accounts are
maintained for payment of living expenses.

3. Joint rental obligation for apartment.


                      COMMENT FOR ARTICLE VI

** The provision covering debts, again maintains a separateness
where there will be some division of expenses, and need not be used,
where one person is furnishing 100% of both parties' living and
personal expenses.

** This provision allows exceptions to the separateness, however,
where joint credit is desired for joint purchases or a joint
checking account is maintained for payment of monthly expenses. If
these exceptions are not wanted, simply delete them.

** If one party is amenable to having the other use his/her charge
accounts, then specifically list the accounts available to the other
person.

** Also, if one person has agreed to pay certain debts for the
other, specify these in this paragraph.



                            ARTICLE VII

                       JOINT CHECKING ACCOUNT

9. The parties shall open and maintain a joint checking account for
use only in paying monthly living expenses. Each shall make
contributions to the account consistent with Paragraph 1 of Article
V. Each may maintain his/her own checking account in addition to the
joint expense payment account.


                       COMMENT FOR ARTICLE VII

** Where there will be a joint arrangement for payment of living
expenses, Paragraph 9 recommends the opening of a joint checking
account, each contributing according to the agreement. This does not
foreclose the opportunity for each having separate accounts also.



                            ARTICLE VIII

                   CHANGES IN FINANCIAL CONDITION

10. This Agreement pertaining to the parties' living expenses is
based on their respective financial condition at the date of this
Agreement. Any significant future change in either party's financial
condition will require renegotiation of living expense allocation
between the parties.


                       COMMENT FOR ARTICLE VIII

** Renegotiation of the division of living expense obligations will
be necessary if the financial picture for one party substantially
changes during the cohabitation period. Again, the new arrangement
must be in writing.



                             ARTICLE IX

                 AQUISITION OF PROPERTY AND ASSETS

11. It is intended that all real or personal property inherited by
or gifted to one party during cohabitation shall be the sole and
exclusive property of that party.

12. All personal property purchased or acquired exclusively with one
party's funds during cohabitation shall be the sole and exclusive
property of that party (or be the joint property of the parties).

13. All personal property purchased or acquired with the joint funds
of the parties during cohabitation shall become the joint and
mutually owned property of the parties (or shall be owned by the
parties jointly and mutually in proporation to eachs financial
contribution).

14. All real estate purchased by the parties with joint funds during
cohabitation shall be owned by the parties as tenants in common, and
not as joint tenants (or in joint tenancy with rights of
survivorship and not as tenants in common). If the parties own
property as tenants in common, ownership rights shall reflect the
pro rata contribution of each party. (If owned as joint tenants with
rights of survivorship, ownership rights have to be equal under the
law notwithstanding the pro rata contribution of each party).


                     COMMENT FOR ARTICLE IX

** Paragraph 11 specifies that all real or personal property
inherited by or gifted to either of the parties shall be that
party's role and exclusive property.

** Paragraph 12 recognizes that if one person buys personal property
(auto, television, stock) that person will be the exclusive owner
unless the purchasing partner directs that the asset be jointly
owned by the partners.

** When joint funds are used for joint purchases, the partners will
be equal owners, unless a pro rata ownership is preferred.

** Ownership of real property can be either in joint tenancy with
rights of survivorship (this allows the survivor to inherit the
decendent's heirs and not the other tenant in common to inherit
his/her share upon death). Ownership rights can be disproportionate
when title is held as tenants in common, but not when held as joint
tenants. Both options are noted in this paragraph. The option not
desired, must be deleted.



                             ARTICLE X

                   CHILDREN OF A FORMER MARRIAGE

15a. Because                          has a child(ren) from
                CUSTODIAL PARENT
a former marriage residing with the parties, it is necessary to
state in this agreement that                       may not rely
                                CUSTODIAL PARENT
upon this agreement to reduce or abate child support payments from
his/her former spouse.

15b. All child support payments received by
                                              CUSTODIAL
              from her/his former spouse or social security benefits
PARENT
paid to                       's minor child shall be kept in a
          CUSTODIAL PARENT
separate account and shall not be comingled with any joint funds
or checking accounts the parties may maintain for payment of
living expenses.

15c. It is agreed that some of the parties' living expenses
may indirectly be used for                        child(ren).
                            CUSTODIAL PARENT'S
This does not mean that                          is assuming
                         COHABITATION PARTNER
any obligation for support of                         's child(ren).
                                 CUSTODIAL PARENT'S


                        COMMENT FOR ARTICLE

** The three paragraphs in Article X take into account that children
of a former marriage may live with the parties. Where this is so,
the custodial parent agrees here that he/she will not depend upon
the agreement's financial arrangements to seek a reduction or
abatement of child support, even though some of the cohabitatine
parties' living expenses will be used indirectly for the chiid or
children's living expenses.

** Also, all funds for the child, be it support or social security
benefits received by the custodial parent, should be segregated from
the joint accounts maintained by cohabitators for their own living
expenses.



                             ARTICLE XI

               CHILDREN BORN TO COHABITATING PARTIES

16. Recognizing that children may be born to the parties
during the cohabitation,                           , agrees that he
                               MALE PARTNER
will execute an acknowledgement of paternity, sign it before a
notary and will file same with the Bureau of Vital Statistics
in the state of birth within 10 days of the child's birth.
17a. If the parties should terminate their relationship and
a child or children has been born to them, each will exercise
his/her best efforts to amicably resolve all issues of custody,
child support, extraordinary medical expenses, visitation and
educational expenses. However, if these issues cannot be
resolved amicably, then the parties shall submit resolution of
these issues to independent mediation or mediation under the
auspices of the state court system. If all above attempts
to resolve these issues fail, then the issues regarding the child's
custody shall be tried by a court of competent jurisdiction.


                     COMMENT FOR ARTICLE XI

** Here, the male partner unequivocably promises that a paternity
acknowledgement and prompt filing thereof will be accomplished. This
ensures that the child will enjoy all rights as though the parents
were married; social security, inheritance, child support and
insurance and/or union benefits should these be available to the
father.

** The paternity acknowledgement also paves the way for the father
to have custody of the child (should he desire it) in the event the
cohabitation relationship is terminated. The only state that will
not accept this procedure for establishing paternity is New York,
where a Court Order must be obtained.

** Because the parties cannot contract in advance for custody in the
event a child or children are born, they have instead asserted their
willingness to try and resolve the issues surrounding child custody
in an amicable fashion. If this cannot be achieved, mediation or
mediation directed by a court system must be used. A trial on the
custody issue within the court system is an avenue of last resort.



                            ARTICLE XII

                   TERMINATION OF THIS AGREETMENT

18. Either party may terminate this agreement and end the
relationship at any time in writing.

19. If this relationship should terminate, neither party
shall be responsible for the support, maintenance, or debts
of the other, nor shall either party have any rights whatsoever
in the earnings, property or assets of the other.

20. If this agreement is terminated, all jointly owned property
(including debts) shall be divided equally between the parties
(or in any other manner agreeable to the parties such as a
pro rata division according to the respective contributions of
each).

21. If the parties cannot agree on an "in kind" division of
jointly owned property, then the contested property shall be
sold by the parties at market price and the cash proceeds divided
equally (or pro rata according to each party's contribution).

22. The party failing to live up to any of the terms of this
agreement shall be solely responsible for attorney's fees, court
costs and any other expenses of enforcement.


23. The provisions of this agreement shall serve as the only
property settlement of the parties regarding property rights,
support rights, and homestead rights.

24. Each party has read this agreement and understands each
provision. No terms may be changed except by written
modifications signed by both parties.





DATE:           ____________________

SIGNATURE       ____________________

SIGNATURE       ____________________



The parties                    and                     ,
are known to me and I had witnessed their subscription
to this Agreement under oath on this            day of               ,
19    .


______________________
  NOTARY PUBLIC


                   COMMENT FOR ARTICLE XII

** The Seven Paragraphs in Article XII all deal with the
relationship's termination. Paragraph 18 indicates how it is
terminated (in writing), Paragraph 19 eliminates a palimony claim on
either side. Paragraphs 20, 21, and 22, direct the division of
jointly held property or if the division is contested, the
assessment of expenses and costs. Paragraph 23 reaffirms that this
Agreement is the only guide for property settlement issues.
Paragraph 24 restates the fact that each party has read and
understands the Agreement and know it cannot be changed except in
writing and signed by both parties.

** The signature paragraph requires both parties to sign in front of
a notary who will also sign and seal the instrument. Two originals
should be enclosed in this manner, one for each person.






                             CREDITS

Dorothea Kaplan is a practicing attorney in Chicago, Illinois.  She
is also the owner of LAW LAB, Inc., a consumer oriented, legal
self-help organization.  For more information, contact Law Lab, Inc.
at 69 West Washington St.  Chicago, Il 60602  312-236-5920