COHABITATION: IS LIVING TOGETHER OUTSIDE OF MARRIAGE PUTTING YOU IN ECONOMIC DANGER?

I have no moral objection to people living together outside of marriage. Heck, I grew up in the 60’s and 70’s. We practically invented the concept of “Cohabitation.”  As someone who has practiced Family Law for decades, I can tell you that a piece of paper does not ensure a lifelong commitment. And countless couples have a loving, lifelong bond even though they have chosen never to marry. The problem is that, after all these years, our lawmakers still haven’t gotten the message. And they fail to recognize that people who choose to share their life without a marriage license should still be able to share their property, and divide it fairly in the event of a breakup. This makes for some pretty unfair, and even economically dangerous, scenarios.
Most people think of marriage as having a moral or religious significance. But what many people don’t realize is that whether we like it or not, marriage also has a legalsignificance. And what you don’t know can hurt you. The fact is that the law provides certain protections for a married spouse that do not exist outside of marriage. And the results can be disastrous following the breakup of an unmarried couple.
Over the years, I have seen instances in which a couple breaks up after years of cohabitation, and one of them walks away with essentially all of the money and property while the other partner comes away with nothing. It’s heartbreaking. A legal marriage would have provided the protection that the vulnerable partner needed. But Arizona provides no protection for a cohabiting couple. Some states (like Texas) recognize “common law marriage.” Arizona does not. Other states (like California) provide some protection in the form of “palimony” (similar to alimony).  Arizona has rejected that theory. The problem is that couples who choose to live together outside of marriage are taking a legal risk when it comes to division of property and financial support.
Here are some of the pitfalls of being an unmarried, cohabiting couple:
COMMUNITY vs. SEPARATE PROPERTY
In Arizona, division of property following a marital breakup is governed by the old Spanish concept of “Community Property” Law. Under this legal concept, there are two kinds of property: Separate Property and Community Property. Following a legal separation or divorce, the husband and wife will each receive his and her separate property, and the community property will be shared equally. But if the parties are not married, there is no “community property.” That means nothing is shared, and the “richer” party – the one who actually purchased the house, the car, the furniture, etc. – may walk away with everything. Here’s why:
Separate Property:  Under Arizona law, separate property is anything a spouse owns before the marriage, and any property that he/she receives during the marriage by specific gift or inheritance. So, for instance, the husband’s old baseball card collection from childhood, or the family heirloom that Wife received as a gift from her grandmother – those things are separate property and will be awarded to the owner in the property division upon dissolution of marriage. If one of the spouses receives an inheritance of money from a grandparent during the marriage, the inheritance is considered separate property so long as it is kept separately or placed in an account in that spouse’s name alone. But if the money is comingled to the point where it can no longer be traced, such as being placed in a joint bank account that is used for salary deposits and payment of bills, it may lose its character as separate property and become “transmuted” (changed) to community property. Separate property also includes any increase that is tied to sale or appreciation of separate property. For example, if a spouse uses her separate funds to buy stock in a company, and the stock increases in value, the increase is considered separate property.

When a marriage is dissolved, the separate property will be identified and awarded to the spouse that it belongs to. All other property belonging to the parties is considered to be community property, and will be divided substantially equally.

However, if the parties are living together but aren’t married, then everything either party earns, buys, or acquires is considered to be the separate property of that person (unless the title is taken in joint tenancy or the acquisition is based on a partnership). There is no community property to be divided.

Community Property: Community property under Arizona law is defined as all property (other than separate property) acquired by either spouse during the marriage.  Under community property theory, each party owns the property equally. This means that whatever a spouse earns from his/her employment is community property, and anything that is purchased with monies earned by either spouse is community property. So, if a spouse cashes a paycheck and uses the money to buy a car, that car is community property and belongs to both spouses equally. If she or he opens a brokerage account using community funds and invests in stocks, bonds, or mutual funds, then that account, and all future growth, is considered to be community property and belongs to both spouses equally. Furniture purchased with community funds is community property. Money contributed to a pension, retirement account, or 401k by one spouse during a marriage is community property and belongs to both spouses 50/50. And if one spouse starts a business during the marriage, that business is also considered to be community property, even if only one spouse runs it.
Over the course of a lengthy marriage, couples can accumulate a large amount of community property. And if the marriage falls apart and the couple divorces, the community property will be divided between the parties essentially equally. This can provide financial security for the spouse who didn’t have the high paying job, or who stayed home and cared for the children while the other spouse acted as the breadwinner.
But here is the potential problem with cohabitation:  If a couple couple lives together but never marries, there will be no “community property” to divide if they later separate — and the law in Arizona does not provide any protection for the “poorer” partner. This can result in a terrible inequity. Imagine a couple who has lived together without marrying for twenty-five years. During that time, one of the partners purchased a business that became a successful and lucrative enterprise. With his earnings, he purchases a massive house in a gated community (which he puts in his own name) and furnishes it beautifully, and he buys expensive automobiles (also in his name alone). He puts money in investment accounts, and retirement accounts (all in his name). He buys life insurance policies, and paintings by famous artists. Finally, he opens a joint account which he places in both partners’ names, but he only deposits a little money each month to cover household expenses.
If the parties were married and filed for divorce under that scenario, then by law everything would be considered community property and would be divided equally. On the other hand, if the parties were not married it becomes an entirely different story. All of the property – the cash in banks, the house, the furniture, the cars, the business, the stocks and investment accounts, the life insurances policies, the valuable works of art – they’re all the separate property of only the one partner. The other partner gets nothing but half of the joint bank account, and there isn’t much money there, since only enough was deposited each month to pay for household expenses. So after all those years of living together as partners in a committed relationship, one party walks away with everything and will live the rest of his or her life in comfort. The other party gets nothing and will suffer financial deprivation.
Spousal Maintenance:
In many committed relationships – whether marital or cohabiting – one of the partners will take on the role of the breadwinner, while the other remains in the home and cares for the children. This allows the partner who is not the caregiver to focus on his/her career; to advance through the ranks of the business world, and increase his/her income and earning power over the years. This type of arrangement can work well, so long as the parents’ relationship lasts.  But what happens if, after 15 or 20 years the relationship deteriorates and parties separate? The working partner might now be earning hundreds of thousands of dollars a year, with the prospect of further advancement and an even higher income in the future. On the other hand, what becomes of the partner who gave up her/his career for the benefit of the family? That person might now be his/her 50’s, no longer a young up-and-comer. Because she or he jumped off the fast track to care for the kids, the prospect of a lucrative career is now gone, and she/he may be forced to take a job with an entry-level salary. How is that fair?
Arizona law provides protection for a married person under these circumstances. The married spouse who sacrificed for the family will be entitled to financial assistance from the other spouse in the form of Spousal Maintenance. The party with the greater wealth will be ordered to financially support the other party for a sufficient period of time to allow that party to complete an education or begin a career and get on her/his feet. (In rare circumstances, the court can require spousal maintenance be paid for the rest of the former spouse’s life.) In order to determine the amount that the person will receive, and how long the support will continue be paid, the judge will consider a number of factors listed in the statute. The amount of monthly spousal support will be dependent upon the lifestyle the family enjoyed during the marriage, the parties’ comparative incomes, the needs of the party seeking spousal maintenance, and a number of other factors.
But the obligation to pay spousal support only applies when the parties were married. Where parties were unmarried and living together, the richer party has no legal obligation whatsoever to help the poorer party financially after the relationship ends. This lack of legal protection can especially hurt a party who gave up her/his career to stay home and care for the children.
INHERITANCE & SOCIAL SECURITY
If a married person dies without a Will in Arizona, the surviving spouse will receive the entire estate of the deceased spouse.
On the other hand, if a person who is unmarried and cohabiting dies without a Will in Arizona, the scenario is much different. In that case, the deceased person’s property will be distributed by Arizona’s law of intestate succession – and none of it will go to the surviving partner. If the deceased person has children, then the entire estate will go to the children. If there are no children, then all of the dead person’s property will go to his/her parents; and if the parents are no longer alive, then the property will go to deceased person’s siblings. Unless the surviving partner’s name is on the house, or the car, or the bank accounts, the life insurance policy etc., then she/he will receive nothing at all.
There is a similar scenario for Social Security. If a married person dies, his/her spouse will likely receive a Social Security death benefit. But if the two parties are not married, then the surviving partner will receive nothing (although the children could receive a death benefit).
This may all seem unfair – and I agree that it is. But the bottom line is this: Under the current law there are important protections afforded to married couples that are not provided for unmarried couples who are cohabiting. Our lawmakers have turned a blind eye to the reality of relationships today and, at least in Arizona, it is unlikely that they will act to close the gap any time soon.
WHAT YOU CAN DO TO PROTECT YOURSELF
Obviously, marrying your partner is one way to protect yourself but, for many different reasons, not everyone wants to take that route in life. The good news is that there are other ways to provide protection. These include setting up joint bank accounts and having both partners deposit their paychecks; opening joint investment accounts; putting together your own IRA or retirement account and having the “richer” partner put an equal amount in yours as he/she puts in his/hers; putting your name on the house title, and the car title, in joint tenancy, so that you are half-owner; etc.
You can also protect yourself by entering into a written Domestic Partnership, or other partnership, agreement that spells out the rights of both parties and describes how property will be divided in the event that the relationship ends and the parties separate.

If you are living with a partner in a committed relationship outside of marriage, you owe it to yourself to consider whether you might be economically harmed if the relationship ends today, or even more importantly, twenty years from now.  It could mean the difference between living a comfortable lifestyle after a separation – or having to struggle financially and worry how you’re going to be able to make ends meet.

 

 

At the Law Firm of Gary J. Frank P.C., both Gary Frank and attorney Hanna Juncaj are strong litigators and compassionate counselors. Gary Frank is a Family Law Attorney with over 30 years of experience as a litigator and mediator, which includes having acted in the capacity of a Judge Pro Tempore in the Maricopa County Superior Court; and serving on the Governor’s Child Abuse Prevention Task Force. Hanna Juncaj is a highly-skilled attorney and mediator with a passion for Family Law and children’s issues. We handle Family Law cases in the areas of divorce, custody (now called “Legal Decision-Making and Parenting Time), relocation (move-away), division of property, spousal and child support, modification and enforcement actions, grandparent and non-parent rights, and all other matters pertaining to families and children. If you are in need of a consultation, please do not hesitate to call our office at 602-383-3610; or you can contact us by email through our website at www.garyfranklaw.com.   We look forward to hearing from you.

IS THE “COHABITATION EFFECT” REAL? — JUST USE YOUR COMMON-SENSE

They call it the “Cohabitation Effect”  — study after study performed over the past forty years has found that that living together before marriage leads to a much higher risk of divorce.   Some researchers have concluded that the risk of divorce is 33% higher for people who cohabit before marriage than for those who elect not to live together until they are married.

But wait — statistics sometimes lie . . . or maybe the problem is that experts can look at a set of statistics and come to an erroneous conclusion.

In a recent study the nonpartisan Council on Contemporary Families looked deeper into all the old statistics and found something different.  They concluded that the age of a couple when they move in together is a stronger predictor of divorce than simple cohabitation.  The longer a couple waits to make such a serious commitment, the better the chance that the marriage will last.

Of course, it’s just common-sense.  A couple of 25-30 year-olds who decide to live together are more likely to have a lasting relationship than two 18 year-olds.  They’re older, wiser, more mature, and probably more financially independent.

Do we really need an expensive research study to provide the same advice that our grandparents would have given us for free?

Wait until you’re ready.”    


http://www.theatlantic.com/health/archive/2014/03/the-science-of-cohabitation-a-step-toward-marriage-not-a-rebellion/284512/

Gary J. Frank is an attorney and mediator with over thirty years of Family Law experience in dealing in divorcecustody, and parenting issues. For many years he acted as a Judge Pro Tempore in the Maricopa County Superior Court, which gave him an insight into the inner workings of the courts that many attorneys lack.  His office is located in the Biltmore area of central Phoenix, with satellite offices in Scottsdale and Paradise Valley, Arizona.  He can be reached by telephone (602-383-3610); or by email at gary.frank@azbar.org.  You can also reach him through his website at www.garyfranklaw.com.  If you are in need of a consultation regarding any area of Family Law, please do not hesitate to contact us today.

HERE ARE THE NEWEST STATISTICS ON COHABITATION IN THE U.S.


Couples moving in and living together, outside of marriage, was once frowned upon in our society.  Now it is commonplace, and the stigma is long-gone.  For some, cohabitation is a stepping-stone to marriage.  For others, it is an alternative to marriage.  The Center for Disease Control recently published a report on Cohabitation in America, chock-full of interesting statistics.  I have included parts of that report below.

NATIONAL HEALTH STATISTICS REPORT
April 4, 2013

“The current report presents estimates from the 2006–2010 NSFG on the first premarital cohabitation experiences of women aged 15–44 in the United States and describes trends in these data since 1995. Estimates of how long women’s first premarital cohabiting unions lasted and whether they remained intact, transitioned to marriage, or dissolved are presented.

Forty-eight percent of women interviewed in 2006–2010 cohabited with a partner as a first union, compared with 34% of women in 1995.

This report presents national estimates of first premarital cohabitations with a male partner for women aged 15–44 in the United States using the 2006–2010 National Survey of Family Growth (NSFG). Estimates from the 2006–2010 NSFG show that nearly one-half (48%) of women aged 15–44 had ever cohabited before marriage (Table 1). Similarly, most young couples live together first before entering marriage (1,2). Cohabitations are typically short-lived: one-half of women’s first premarital cohabitations that began in 1997–2001 became marriages and another one-third dissolved within 5 years (2).

Cohabitation has become a more frequent site for childbearing. A recent report on fertility using the 2006–2010 NSFG showed that 23% of recent births among women aged 15–44 occurred within cohabitation, a significant increase from 14% in 2002 (3). One-half of births to cohabiting women in recent years were unintended (4). Unintended births are associated with poorer social, economic, and health outcomes for both the mother and the child (5).

Researchers often frame questions on the meaning of cohabitation in terms of two possibilities: whether cohabitation serves primarily as a step toward marriage, much like dating and engagement, or as an alternative to marriage (7–9). Economic circumstances are related to the marriage decision-making process (10–15). Transitions to marriage are more likely for cohabiting women with higher levels of education and income than for cohabiting women of lower socioeconomic status (10). Economic barriers to marriage are particularly significant for cohabiting women with children (16). Other factors that influence the progression from cohabitation to marriage include relationship commitment and attitudes toward marriage (17,18).

Trends in first premarital cohabitation by subgroup are presented by Hispanic origin and race and education.

+ In more recent years, women were increasingly likely to cohabit with a partner as a first union rather than to marry directly: 48% of women interviewed in 2006–2010 cohabited as a first union, compared with 43% in 2002 and 34% in 1995 (Table 1, Figure 1).

+ The rise in cohabitation as a first union over this time period led to a lower percentage of women aged 15–44 whose first union was a marriage: 23% in 2006–2010, compared with 30% in 2002 and 39% in 1995.

+ In 2006–2010, 70% of women with less than a high school diploma cohabited as a first union, compared with 47% of women with a bachelor’s degree or higher.

Age at first premarital
cohabitation

By age 18, 9% of women aged 15–44 in 2006–2010 had ever cohabited (data not shown).

By age 20, 26% of women in 2006–2010 had cohabited, compared with 23% in 2002 and 19% in 1995.

By age 25, over one-half of women (55%) in 2006–2010 had cohabited, compared with 52% in 2002 and 46% in 1995.

By age 30, 74% of women in 2006–2010 had cohabited, compared with 70% in 2002 and 62% in 1995.

Women with less than a high school diploma had the highest probability of cohabiting by age 25 (76%), compared with women with a bachelor’s degree or higher (36%).
Since 1995, the length, or median duration, of first premarital cohabitations has increased, regardless of whether these unions remained intact, transitioned to marriage, or had dissolved by the time of the interview. The length of first premarital cohabitations for women aged 15–44 in 2006–2010 was 22 months, compared with 20 months in 2002, and 13 months in 1995.

Outcome of first premarital cohabitation

+ Forty percent of first premarital cohabitations among women transitioned to marriage by 3 years, 32% remained intact, and 27% dissolved.

+ First premarital cohabitations among women aged 22–44 with higher education were more likely to transition to marriage by 3 years. Over one-half of cohabitations among women with a bachelor’s degree or higher had transitioned to marriage (53%), compared with less than one-third of cohabitations among women with less than a high school diploma (30%)

+ A higher percentage of first premarital cohabitations among women with less than a high school diploma (43%) had remained intact by 3 years, compared with 20% of cohabitations among women with a bachelor’s degree or higher.

Probability of a pregnancy during first premarital cohabitation

+ Since 1995, the probability of a pregnancy within a cohabiting union among women aged 15–44 has increased, from 15% in 1995, to 18% in 2002, and to 19% in 2006–2010.

+ Nearly one in five women in 2006–2010 (19%) experienced a pregnancy in the first year of cohabitation.

+ One out of four women (25%) who were under age 20 when they began cohabiting experienced a pregnancy in the first year, compared with about 1 out of 12 women (8%) who were aged 30–44 when they began cohabiting.

+ One-third of women with less than a high school diploma experienced a pregnancy in the first year of cohabitation (33%), compared with 5% of women with a bachelor’s degree or higher.

Probability of marriage among cohabiting women with a pregnancy

+ By 6 months, the probability of marriage among women who became pregnant in their first premarital cohabitation was higher in the 1995 NSFG (32%) compared with the 2002 and 2006–2010 NSFGs (19% each).

+ The probability of marriage by 6 months among women who became pregnant in their first premarital cohabitation was higher for women who were in their twenties when they started cohabiting (23%–26%), compared with those under age 20 (16%).

+ The probability of marriage by 6 months among women who became pregnant in their first premarital cohabitation was three times higher for women with a bachelor’s degree or higher (45%) than for those with less than a high school diploma (15%).

Conclusion

Cohabitation is a common part of family formation in the United States, and serves both as a step toward marriage and as an alternative to marriage (7–9). Childbearing outside of marriage continues to increase, and about one-half of nonmarital births occur to cohabiting women (3,30).”


* Source:  CDC Fast Stats

Gary J. Frank is an Arizona Family Law attorney and former Judge Pro Tem with over thirty years of experience.  He is a strong and compassionate advocate for his clients.  Our law firm handles all matters involving Family Law, including divorce, custody, parenting issues, child support, enforcement actions, modification actions, paternity, and grandparent and non-parent rights, as well as division of property and businesses.  If you are in need of a consultation to learn about your legal rights, please do not hesitate.  Contact us today. You can reach us by telephone (602-383-3610) or by email (gary.frank@azbar.org), or through our website at www.garyfranklaw.com.  We look forward to hearing from you. 

To Marry or Not to Marry — That is the Question.

Today, more and more people are deciding to live together before marriage.  Many couples live together with no intention of ever marrying.  People frequently ask me: “Is it better to marry or to just live together without legal ties?”  My answer is always the same: “That’s a decision that is best left to each couple, after giving the matter careful consideration.”  There are pros and cons to each arrangement.  On the one hand, if there is no marriage then there will be no need for a divorce if the couple should ever break up.  On the other hand, the law does afford a married person certain protections, and there are often legal consequences when a relationship ends, even if the cohabiting couple never married.

The longer a couple has lived together, the more “things” they typically acquire.  For instance, a couple may pool their money to buy a home, or a car, or a houseful of furniture.  They may have a joint bank account, or mutual investments.  How are these things divided if and when the relationship ends?  And what happens if the parties can’t agree on a division? 

There is no “common law marriage” in Arizona.  When the cohabitation is over, the concepts of divorce and community property do not apply.  If the couple owns property or bank accounts together – and if they are fighting over them – then they may wind up in a lawsuit, even if they never married.  Rather than using a “community property theory” of division, the Court will likely use a “partnership” theory to divide these assets.  A problem may arise where the parties bought a house together but one of them paid all the mortgage payments with his/her separate income from work.  In a divorce scenario this would be an easy call and the value of the house would be split equally, since income earned by a spouse from employment during the marriage is considered “community property” (and both the husband and wife have an undivided 50% interest in all community property).

Spousal Maintenance is a statutory right that is afforded only to a married person in Arizona.  The parties may have lived together for many years, and one of them might have given up a career to be a homemaker or a stay-at-home parent, but if the parties were never married there is no right to spousal maintenance when the relationship ends.  This could put the non-married, stay-at-home partner in a real bind and make his or her life unnecessarily difficult following the break-up.

When people have children together and then separate, they may still end up in court over the issues of custody, parenting time, and child support.  The court will make custody and parenting time decisions based on the best interests of the children regardless of whether or not the parents are married.  Child support decisions will be made based on the parents’ incomes and the needs of the children, pursuant to the Arizona Child Support Guidelines.  Whether the parents were ever married is not a factor.

If the parents are not married and the father is not on the child’s birth certificate, then before being given the rights of a parent, the father will have to take the extra step of obtaining a paternity order.  Only then can he ask the court for an order spelling out his custody and parenting time rights.

There are valid reasons for deciding to marry, or live together without marrying.  However, given the fact that this is an important decision with long-term consequences, it would be a good idea to consider the legal ramifications before making a final decision.

Gary Frank has practiced Family Law in Arizona for almost thirty years and has handled cases for both married, and unmarried, persons.  Contact us today for a consultation by calling our office at 602-383-3610, or email us through our website at http://www.garyfranklaw.com/.

The Definition of “Family” Is Changing – Family Law Must Change, Too

The definition of “Family” is changing.  According to a recent study by the Pew Research Center, about 29 percent of children under 18 now live with a parent or parents who are unwed or no longer married.  This is a five-fold increase from 1960.  This statistic does not merely reflect a higher divorce rate — it is also the result of a rising number of couples who have decided to live together without ever marrying.  In fact, U.S. census data released in September, 2010 shows that marriages have hit an all-time low of 52% for adults 18 and over.  In 1978 just 29% believed that marriage was becoming obsolete.  Today, that figure has grown to 39 percent.  According to the Census Bureau, opposite-sex unmarried couples living together jumped 13 percent this year, to 7.5 million.  Experts speculate that the sharp increase is a result of both changing societal values and the current economic woes.

Whereas “Family” was once defined as a married man and a woman, and children born in wedlock, that definition is becoming much broader in today’s society.  It now includes “blended families” with step-parents and children from different relationships; single-parent families; families in which the parents are cohabiting; families in which the children are being raised by grandparents; and gay relationships with or without children.  Our definition of “Family” is morphing and growing, and it is becoming more accepting and inclusive.

What hasn’t changed much is the laws relating to divorce and Family Law.  In order to provide protection for people in non-marital relationships, our laws need to change.  For instance, a spouse who has given up her or his career to care for children throughout a long marriage is entitled to spousal maintenance after a divorce; but a person who has done the same thing in a long-term cohabitation arrangement is not.  Unlike California Arizona has no “palimony” law to protect that person.  And while a spouse in a marital relationship has community property rights, and rights of inheritance under the law, a person in a cohabitation relationship has no such protection after a break-up or a death.  Arizona has no “common law marriage” statute.

For these reasons, a person entering into a committed relationship must think long and hard about what form that commitment should take.  Marriage or Cohabitation?  There is a significant difference from a legal perspective, with a spouse in a marital relationship having far more protection.

Some recent changes have been made in Arizona, especially in the area of protecting children.  Grandparents, step-parents, and other non-parents now have a legal right to visitation and, in some cases, custody of children with whom they have had a close bond.  Single people and gay couples are now allowed to adopt children who are in need of a loving family.  Custody laws have become more realistic and fair in guiding judges to make determinations of joint vs. sole custody.  New Parenting Time Guidelines have been enacted, and the existing Child Support Guidelines are in the process of being revamped.

Changes are occurring in how we, as a society, view and define “Family.”  The law must continue to evolve in order to accommodate those changes.

Gary Frank has practiced Family Law in Arizona for almost thirty years, acting in the capacity of a counselor, a litigator, a mediator, and a judge pro tem.  He is a committed advocate for families and children.  If you are in need of advice or representation, contact our office at 602-383-3610 or email us through our website at http://www.garyfranklaw.com/.