The Center for Disease Control (“CDC”) recently published a study, which found that more U.S. couples are living together without marrying and that those unmarried couples who live together are living together longer. With couples living together longer, houses may be purchased or apartments leased, household items are purchased individually and together, bank accounts may be commingled, and joint and individual bills are incurred. But what happens to those items if the couple eventually decides to break up?
As family law attorneys, we see this situation arise time and time again. In Indiana, if a couple is married, then the dissolution statutes apply, which determine how the couples’ assets are divided between the man and woman. However, with unmarried couples who are simply living together, these statutes do not apply, regardless of whether the unmarried couple has lived together for years. This is because Indiana does not have a cohabitation statute and does not recognize common law marriage (in fact, Indiana has not recognized common law marriage entered into in this state since 1958). Although Indiana courts have allowed some individuals to recoup some of the money he or she used to pay for the costs of the relationship, unmarried couples that are living together should consider a cohabitation or “living together” agreement in order to solidify what happens if they break up.
A cohabitation agreement is an agreement that sets forth a plan in the event of a break-up. At a minimum, a cohabitation agreement should address the division of property, which answers the always important question: “Who gets what?” Additionally, a cohabitation agreement can set forth the financial obligations and duties that one person owes to the other. For instance, it may answer the following questions with which unmarried couples struggle, both during the relationship and after:
– Who will pay certain bills while living together;
– What will happen to joint accounts and investments;
– Who will be responsible for joint debts;
– Whether repayment of debt is required when one person paid the
debt of the other during the relationship;
– Whether one person must repay any debts, which the other
person paid; and
– Any other personal obligations between the parties.
Ultimately, whether an unmarried couple needs a cohabitation agreement, depends on the unique facts and circumstances of each case. To make this determination, couples should consider whether they will: buy property together, commingle their incomes and investments, have joint debts, or otherwise intertwine their funds and/or assets, regardless of whether those assets or funds were obtained prior to or during the relationship. While it may not be romantic to discuss “what happens if we break up,” early communication and a written cohabitation agreement discussing these issues relevant to the couples’ relationship may help to prevent a war of the roses.
If you have questions on this issue or any other Family Law and Adoption issue, please contact us at (812) 426-1231..