Park City Wealth Advisors is honored to have had the opportunity to sit down and talk about cohabitation laws with Abby Wool Landon of Wool Landon, a Multi-State Estate Planning, Trust and Probate Administration, and Fiduciary Litigation Firm.
Abby Wool Landon spoke with PCWA about the importance of families and loved ones having challenging conversations about the future, including divorce, disability, or death, with proper legal guidance. For over three decades, Wool Landon has specialized in assisting families with estate planning, administration, and disputes, as well as disability planning.
Park City Wealth Advisors would like to share with you some information provided by Wool Landon about cohabitation, including agreements between unmarried cohabiting partners.
What are Cohabitation Laws?
Cohabitation is when two people in a committed intimate relationship live together, although unmarried. A committed intimate relationship is treated differently than a marriage under the circumstances of splitting up, disability, or death.
Depending on the state you live in, you can not be sure how mixed assets will be divided in the case of splitting up or the death of a partner, nor can you be sure who will be in charge of important decisions if you were to become disabled. For these reasons, firms like Wool Landon assist in creating binding agreements for cohabiting couples, which overpower the state’s jurisdiction.
Cohabitation Laws in Community Property or Separate Property States
Community Property States have certain regulations for married couples. An example of a Community Property State is the state of Washington. In Washington, if you are married and acquire property during the marriage, as a general rule, such property is deemed to be “community property,” even if only one name is listed on the title. In the event of death or divorce, each of you is deemed as a one-half owner.
Abby Wool Landon explains that in some Community Property States, an unmarried cohabitating couple may be treated like a married couple. For example, a cohabiting couple in Washington with assets mixed together may be treated like a married couple when separating and splitting these assets. Arizona is a Community Property State, but in Arizona, unmarried couples do not get similar treatment.
In a Separate Property State, a married couple is not automatically treated as owning assets together due to marriage. They hold property together based on the legal titling to the property. An unmarried cohabitating couple that holds property together in a separate property state might be treated as a partnership in some states, whereas other Separate Property States do not consider their relationship as a partnership or otherwise comparable to a marriage.
Whether you are a cohabitating couple in a Community Property State or a Separate Property State, in the event of a break up, there may be few or no accommodations given to your mixed assets.
Additionally, in the event of the inability of one partner to make health and legal decisions for themselves, those decisions may not be made by your partner but instead by a parent or someone else including the court.
Why It’s Important to Have a Set Plan No Matter What State You Live In
How couples are treated while splitting up, or in the case of disability or death, while living together but not getting married varies wildly from state to state. Couples under an agreement in one state who later decide to relocate to another state may not be bound by the same agreement. For many reasons, it is essential to form agreements that are binding in any jurisdiction instead of only applicable to one state.
It might not always be pleasant to think about the future and plan for circumstances such as divorce, disability, or death. That is why it is essential to plan ahead with an expert who has the best interest of your family or relationship.
Wool Landon assists families and couples in estate and disability planning by answering your questions with transparency, strategizing with your best interest at heart, and answering the questions you may have yet to think to ask.
While the cohabitation laws differ from state to state, the definition of a cohabitation relationship varies from couple to couple and from state to state. It can take a lot of work to keep up with the ever-changing rules and regulations. The proper legal guidance will guide you through agreements and review plans step by step.
Wool Landon stands behind a reputation for developing plans that avoid future disputes and complications and a legal team that works hard to secure what is sentimental to you. Those specializing in Multi-State Estate Planning, Trust and Probate Administration, and Fiduciary Litigation understand that this type of planning is a challenging but necessary conversation.
Park City Wealth Advisor’s client base of CEOs, Founders, Entrepreneurs, and High Net Worth Individuals and their families face unique planning challenges. Our dedicated team of advisors, alongside our network of experts, work to overcome those challenges.