Cohabitation and premarital agreements

  • View

  • Download

Embed Size (px)



Text of Cohabitation and premarital agreements

  • 1. Chapter 2: Cohabitation and Premarital12AgreementsFamily Law for the Paralegal2nd EditionWilsonClass NameInstructor NameDate, Semester

2. LEARNING OBJECTIVESAfter this lecture, you should be able to:2.1 Define cohabitation. 12Identify various kinds of documents cohabiting2.2 partners can use to create and protect theirrights.2.3 Explain what a cohabitation agreement is. Class Name Instructor Name Date, Semester Cont. 3. LEARNING OBJECTIVESAfter this lecture, you should be able to:2.4Identify forms of relief potentially available tocohabiting partners if their relationship12terminates.Describe the nature and purpose of a premarital2.5 agreement.Identify commonly accepted legal requirements2.6 for a valid premarital agreement. Class Name Instructor Name Date, Semester Cont. 4. LEARNING OBJECTIVESAfter this lecture, you should be able to:2.7 List the kinds of provisions a basic premarital 12agreement contains.Identify trends regarding the enforceability of2.8 premarital agreements.Describe the paralegals potential role with2.9 respect to cases involving cohabitation andpremarital agreements. Class Name Instructor Name Date, Semester 5. Learning ObjectiveAfter this lecture, you should be able to:2.1Define cohabitation. 6. 2.1What is Cohabitation? Cohabitation is broadly defined as twounmarried persons living together commonly inan intimate relationship.6 7. How Does it Differ From2.1Marriage? It differs from marriage in several respects: Parties do not have to satisfy any legal requirements tocohabit. Cohabitation can be terminated without legal process. There is no presumption of parentage when a child isborn to a female partner in a cohabiting couple (andhence no duty of child support or right to visitation). If the relationship terminates, division of property may bebased on an agreement of the parties or based onequitable relief provided by the courts. Following termination, absent an agreement to thecontrary, there is no duty of support.7 8. Learning ObjectiveAfter this lecture, you should be able to: Identify various kinds of documents cohabiting partners2.2can use to create and protect their rights. 9. Documents to Create and Protect2.2 Their Rights What are some of the documents cohabitingpartners may use to create and protect their rights? Health care proxies Durable powers of attorney Wills Deeds reflecting joint ownership of property with rights ofsurvivorship Life insurance policies Trusts Beneficiary designations on retirement accounts etc. Joint partnership agreements Cohabitation agreements9 10. Learning ObjectiveAfter this lecture, you should be able to: Explain what a cohabitation2.3agreement is. 11. 2.3 Cohabitation Agreement A cohabitation agreement is an agreement betweentwo unmarried individuals who live or intend to livetogether, defining their intentions, rights, andobligations with respect to one another while livingtogether and upon termination of their relationship. A cohabitation agreement is a contract and the soleconsideration for the agreement must not bemeretricious sex (prostitution or sexual relationsoutside of marriage). Cohabitation agreements allow parties to privatelyidentify, negotiate, and reach agreement withrespect to their expectations, both financial andpersonal. 11 12. 2.3 Cohabitation Agreement (cont) Cohabitation agreements are similar to premaritalagreements in some respects but are usually not ascomprehensive. See Paralegal Application 2.1 on pages 27 and 28 of thetext for a description of common provisions ofcohabitation agreements Cohabitation agreements may include provisions aboutexpectations of the parties regarding their relationship butan individual provision of a cohabitation agreement (oran entire agreement) may be held unenforceable if itviolates a law, constitutional right, or strong public policy(such as a provision that a party who gets pregnantagrees to have an abortion).12 13. Learning ObjectiveAfter this lecture, you should be able to: Identify forms of relief potentially2.4available to cohabiting partners if their relationship terminates. 14. 2.4Forms of Relief For background, see Case 2.1 Marvin v. Marvin(1976) on pages 29-32 of the text which popularizedthe term palimony = a court-ordered allowancepaid by one cohabitant to another after theirrelationship terminates. Without abandoning the strong public policyfavoring marriage, the Marvin court endorsed thenow widely held principle that when the factswarrant it, the courts should fashion appropriateequitable remedies for cohabitants to avoidhardship or injustice.14 15. Major Legal Basis for Granting2.4 Relief See Exhibit 2.2 on pages 33-35 of the text. Express contract: The parties articulate anagreement. Implied-in-fact contract: The court infers the partiesintentions from their conduct and the surroundingfacts. Quasi-contract/Implied-in-law contract: The courtcreates the contract to avoid unjust enrichment ofone party at the expense of the other (based onquantum meruit).15 16. Major Legal Basis for Granting2.4 Relief Purchase money/Implied/Resulting trust: The courtcreates a trust when one party contributes the funds forpurchase of a property and title is held in the other partysname. Constructive trust: The court imposes a trust on an asset ofa party who wrongfully obtained the asset. The trust is forthe benefit of the wronged party. Implied partnership/Joint venture: The court creates apartnership based on the conduct of the parties anddistributes the assets and liabilities of the partnershipbased on principles of fairness. Putative spouse doctrine: The court provides relief to aperson who reasonably believed he or she entered avalid marriage.16 17. Learning ObjectiveAfter this lecture, you should be able to: Describe the nature and purpose2.5of a premarital agreement. 18. 2.5 Premarital Agreement A premarital agreement is an agreement made by twopersons about to be married defining for themselves theirrespective rights, duties, and responsibilities in the eventtheir marriage terminates by death, annulment,separation, or divorce. See Case 2.2 Posner v.Posner (1970) on pages 36 and 37of the text for context. With divorce such acommonplace fact of life, it is fair to assume that manyprospective marriage partnersmight want to considerand discussand agree uponthe disposition of theirproperty and alimony rightsin the event theirmarriage, despite their best efforts should fail.Atendency to recognize this change in public policyisclearly discernible. 18 19. 2.5 Premarital vs. Postmarital Postmarital agreements: Postmarital agreements areagreements made by two people already married toeach other who want both to continue their marriageand also define their respective rights uponseparation, divorce, or death of one of the spouses(banned in a small minority of states). Separation agreements: Separation agreements areagreements made between spouses in anticipationof a divorce or legal separation, concerning theterms of the divorce or legal separation and anycontinuing obligations to each other. 19 20. Learning ObjectiveAfter this lecture, you should be able to: Identify commonly accepted2.6legal requirements for a valid premarital agreement. 21. Requirements for Premarital2.6 Agreements The requirements for a valid contract The requirement of procedural fairness The requirement of substantive fairness21 22. 2.6 Requirements for Valid Contract There must be an offer. The offer must be accepted (generally in writing). The parties must have the legal capacity to contractin terms of age and mental competence. (Anaffidavit of competency may be warranted.) The subject matter of the contract must be legal. There must be consideration for the contract (abargained-for exchange of something of value). There must be a meeting of the minds (a sharedunderstanding of the terms and conditions of thecontract). 22 23. Requirements of Procedural2.6Fairness The requirement of procedural fairness refers to fairness in thenegotiation and execution of the agreement. Examples of procedural fairness include the following:Representation by independent counsel (One attorney cannot reasonably represent the interests of both parties.)Adequate disclosure of assets and liabilities (Did the parties have, or should they have had, knowledge of each others worth such that each could make an informed decision?)Sufficient time to negotiate and review the agreement prior to execution (The states vary with respect to what constitutes an appropriate time.)Absence of fraud, duress, or undue influence in the negotiation and execution of the agreement 23 24. Requirement of Substantive2.6 Fairness The requirement of substantive fairness refers tofairness in the specific terms of an agreement. Examples: Is the division of property per se unfair or unconscionable Is an agreement to waive alimony/ spousal support fair The states vary with respect to whether fairness willbe measured only at the time of execution or also atthe time of performance (the second lookapproach). Most courts will not enforce the agreement if its termsare so unfair to one of the parties that they areunconscionable (they shock the conscience of thecourt).24 25. Learning ObjectiveAfter this lecture, you should be able to: List the kinds of provisions a2.7basic premarital agreement contains. 26. Provisions In A Premarital2.7 Agreement Agreements vary in length and formality but generally theyinclude the following basic components:A Preamble (introductory segment)A definition of separate property and how it will be treatedA definition of marital property and how it will be treatedA statement of the rights each party will have to spousal support if the marriage terminates in a separation or divorce or a waiver of those rightsA provision relating to death benefits or a waiver thereofGeneral provisions (severability, governing law, etc.)Schedules of assets and liabilities (may be attached as Exhibits) See Exh