Cohabitation issues frequently arise when unmarried people who have been living together in a long-term relationship or who own significant property together, decide to terminate the relationship. It should be noted that paternity and other statutes related to custody, parenting time, and child support cover issues involving children of an unmarried couple.
For married couples, Indiana has several statutes governing the division of property in a marital dissolution. However, there are no comparable statutes for unmarried cohabitants. Indiana does not recognize common law marriage, and palimony, per se, is not awarded by Indiana courts. Without a written agreement as to how property will be divided upon the breakup of the relationship, a cohabitant’s only recourse is to rely on the theories of implied contracts and/or unjust enrichment. However, both of these fields of law are relatively murky for a layperson to understand, and both are difficult to prove in court. Results are fairly inconsistent and unpredictable, and litigation is often protracted and expensive.
One claim that a former co-habitant may make, for example, is an implied contract claim. To succeed under an implied contract claim, the plaintiff must prove that he or she has given notice that he or she expected repayment of any monies given or property purchased. Under an unjust enrichment claim, a plaintiff must prove that one party received more of an economic benefit from the relationship than the other party. Furthermore, the plaintiff must prove that the economic benefit was so great that the retention of the benefit without payment would be unjust. Given the level uncertainty, and the possibility of one cohabitant being significantly financially harmed at the end of a relationship, couples are well-served to consider entering into a cohabitation agreement.
A cohabitation agreement is a contract, ideally entered into at the beginning of a cohabitation relationship, that can help alleviate the stress and uncertainty that results when a non-marital, but no less significant, relationship comes to an end. In its most basic form, a cohabitation agreements sets out how personal property, assets and debts should be divided, in the event the relationship ends. Of course, these agreements can cover a variety of other issues, as well.
Who is responsible for bills and other living expenses?
Who currently owns what property, and what property will be jointly owned in the future?
What happens to jointly owned property, in the event that the relationship is ended? Will it be automatically sold? If so, how will it be valued? If not, how will it be divided?
What happens to any personal property, in the event that the relationship is ended? How will it be divided?
Are there any joint debts? If so, who will be responsible for them, in the event the relationship is ended?
If you would like to discuss whether a cohabitation agreement is right for you, please call Schulz Reagan, LLC for a consultation.
Disclaimer: This summary is not intended to be comprehensive, and should not be construed as legal advice for your particular situation. Nothing in this website is intended to serve as or substitute for legal representation.