Cohabitation Agreements

While the Texas legislature has not specifically enacted any provision in the Family Code for cohabitation agreements, the general feeling in the legal community is that these agreements are valid as contracts and will be upheld by a court. Generally speaking, courts like parties to make clear and precise arrangements and spell out their relative rights, duties and obligations.  In my opinion, cohabitation agreements in Texas are very important because of the Texas concept of common law marriage. Texas law provides that if a man and woman agree to be married, and after the agreement they live together in this state as husband and wife and represent themselves to others that they are in fact married, they are common law married. A common law marriage is just as valid in the State of Texas as a ceremonial marriage that has been performed by a minister, a rabbi, a priest, a judge, or the Pope himself.

One of the problems that arise is that when people live together, other people frequently assume that they are husband and wife. Also, they occasionally will check into a hotel as husband and wife or join a gym as husband and wife, due to a family discount. Then, the issue becomes whether or not they really intended to be married. When they separate, if one person alleges that they agreed to be married and intended to be married, it will be necessary to prosecute or defend a divorce action. One of the two parties who thought that they were simply living together may find that what they thought was their own property is in fact classified under Texas law as community property.

What is a Cohabitation Agreement?

A cohabitation agreement is a type of marital contract that is entered into by two people who are in an intimate, long-term relationship with one another and that live together.  Cohabitation agreements specify how assets, property, income, and debt will be divided should the relationship end.  Additionally, a cohabitation agreement can specify if any form of spousal support is expected to be paid, who will pay support, the amount of the support and also the duration of support payments.   Another common feature of cohabitation agreements involves life insurance policies, to protect the person who is perhaps dependent on the other partner and living in his or her home.

What rights do unmarried couples have?

Generally, unmarried cohabitants do not enjoy the same rights as married individuals, particularly with respect to property acquired during a relationship. Marital property laws and other family laws related to marriage do not apply to unmarried couples, even those who are in long-term relationships. The characterization of property acquired by unmarried cohabitants is less clear than that of married couples whose ownership of property is governed by marital and community property laws. Some property acquired by unmarried couples may be owned jointly, but it may be difficult to divide such property when the relationship ends. There is no obligation of financial support attached to a couple who cohabits, absent a clear, written agreement to the contrary.  If you are financially dependent on a romantic partner and the relationship ends, the effects of the breakup can be much more harsh than the breakup of a marriage.

How is cohabitation defined?

Cohabitation is generally defined as two people living together as if a married couple. State laws vary in defining cohabitation. Some states have statutes which make cohabitation a criminal offense under adultery laws. Under one state’s law, cohabitation means “regularly residing with an adult of the same or opposite sex, if the parties hold themselves out as a couple, and regardless of whether the relationship confers a financial benefit on the party receiving alimony. Proof of sexual relations is admissible but not required to prove cohabitation.” Another state statute defines cohabitation as “the dwelling together continuously and habitually of a man and a woman who are in a private conjugal relationship not solemnized as a marriage according to law, or not necessarily meeting all the standards of a common-law marriage.”  Yet another state, Georgia, defines cohabitation as “dwelling together continuously and openly in a meretricious relationship with another person, regardless of the sex of the other person.  Texas law does not define cohabitation at all and we have no specific law that relates specifically to cohabitation.

Can an unmarried couple establish rights as a couple?

Living together, or cohabitation, in a non-marital relationship does not automatically entitle either party to acquire any rights in the property of the other party acquired during the period of cohabitation.  However, adults who voluntarily live together and engage in sexual relations may enter into a contract to establish the respective rights and duties of the parties with respect to their earnings and the property acquired from their earnings during the nonmarital relationship. While parties to a nonmarital cohabitation agreement cannot lawfully contract to pay for the performance of sexual services, they may agree to pool their earnings and hold all property acquired during the relationship separately, jointly or to be governed by community property laws. They may also agree to pool only part of their earnings and property, form a partnership or joint venture or joint enterprise, or hold property as joint tenants or tenants in common, or agree to any other arrangement.

What about medical treatment and estate planning?

Other legal issues that may affect cohabiting couples include estate planning and medical care. Generally, someone who cohabits with another is not considered an heir under the law and they don’t have the same rights to make medical care decisions in the same manner as a spouse. Therefore, unmarried cohabitants may consider estate planning and power of attorneys in addition to having a nonmarital agreement.

What duties may be owed between cohabitating partners?

In some cases of people who formerly cohabited, courts have found a trust created in property of one person who cohabits with another, whereby the property is deemed held for the benefit of their domestic partner. When there is no formal trust agreement, a resulting trust may still be found under certain circumstances in order to enforce agreements regarding the property and income of domestic partners.  If there is evidence that the parties intended to create a trust, but the formalities of a trust are lacking, the court may declare a resulting trust exists. The court may also declare that a constructive trust exists, which is essentially a legal fiction designed to avoid injustice and prevent giving an unfair advantage to one of the parties. This may be based on the contributions made by one partner to the property of the other. Each case is decided on its own facts, taking all circumstances into consideration.

What other issues do cohabitation agreements address?

Once a cohabitation agreement is created, numerous financial, medical and personal issues will be agreed to, including:

  • how property will be distributed, should the couple split up
  • how financial support payments will be made, the amount of payments and the duration of payments
  • how debts will be divided and paid
  • who will be appointed as conservator of each person’s estate
  • who will make health and medical decisions should one partner become incapacitated
  • who will make final medical decisions in the event of an unexpected emergency

Janis Alexander Cross has prepared a number of cohabitation agreements. I prefer to insert a clause to the effect that the parties agree in the contract that they will not ever be common law married, and they will only be married if they go through a ceremonial marriage. To my knowledge that provision has never been tested in the Texas’ courts system. However, again recognizing that courts do like people who spell out their relative duties, obligations and responsibilities, I believe that if it is tested, it will be upheld.  If you are thinking about cohabitating with someone, you really should consider creating a Cohabitation Agreement that will spell out the rights and responsibilities of the two partners.

A Texas cohabitation agreement should have all of the formalities of a premarital agreement. Additionally, it is possible to include in a cohabitation agreement a premarital agreement recognizing that if the parties ever do become ceremonially married, than the premarital agreement will become effective upon marriage, and will control the property during the marriage relationship.  If you are considering a Texas cohabitation agreement, please contact Janis Alexander Cross, our prenuptial attorney, today for a consultation!

This article is not intended to be legal advice and is not a substitute for legal representation by an attorney. You are encouraged to seek the advice of Janis Alexander Cross of Buckner & Cross, L.L.P.  to answer any specific legal questions you may have.