Protecting Your Union In A Complicated Legal Landscape
We are all thrilled that more states are recognizing gay marriage and civil unions. Along with this growth, however, comes the reality that not all marriages are forever, and the LGBTQ community must plan for this possibility in the same manner as the straight community. While the mere thought of a pre-nuptial agreement can make one shiver, the benefits and importance of such cannot be overstated.
In anticipation of entering into a formal pre-nuptial agreement, a couple is forced to sit down and talk openly and honestly about finances and about future expectations about children; two issues that are so often not discussed in depth in advance of marriage, and which can cause turmoil in the relationship down the road.
Often times, couples are hesitant about having this conversation. There are many who would rather avoid having a potentially awkward conversation regarding a hypothetical break-up. And, while this is an understandable point-of-view, the responsible thing to do is to have the conversation beforehand to avoid an expensive and messy court battle in the event of a break-up.
What is a PreNup?
A pre-nuptial agreement ordinarily contains provisions that define how marital assets will be divided, what a marital asset is, whether there will be the payment of spousal support and under what circumstances. When preparing a pre-nuptial agreement, the parties may want to include terms that address household finances, furnishings, and any number of other provisions that the parties deem appropriate. The most important element of a pre-nuptial agreement is full disclosure of assets and income. While this may seem elementary, it is amazing to me how many folks come to me seeking a divorce or dissolution without having any idea as to the other partner’s income and assets.
What is a Cohabitation Agreement?
Similarly, couples entering into a formal Civil Union should prepare a Cohabitation Agreement prior to their ceremony. A cohabitation agreement is almost identical to a pre-nuptial agreement except it is entered into by couples who are either not able or who choose not to marry. As with a pre-nuptial agreement, a cohabitation agreement can be as specific or as general as you want it to be, provided it details what will happen to your assets in the event of a break-up or in the event of death while cohabiting. The cohabitation agreement is especially useful to same-sex couples who do not live in a state that recognizes gay marriage, but do live in a domestic partnership situation in which they share a joint bank account, purchase a home together and otherwise live as a ‘married’ couple.
In the event of separation, all cohabitation agreement should include terms for:
Expectations of the relationship financially and otherwise
Distribution of assets in the event of a break-up
Whether there will be the payment of future support
The purpose of a pre nuptial agreement or a cohabitation agreement is to preclude the need for the parties to have to go to court to litigate a settlement and to face the prospect of a judge making a decision as to what is appropriate, particularly a judge who may have personal animosity toward the LGBTQ community.
In any event, litigation is expensive, time-consuming and emotionally draining and the outcome can be utterly contrary to common sense. Take for example, an hypothetical couple residing in what can be considered a non-gay friendly county in Pennsylvania. The couple separates and a lawsuit is filed to determine how a jointly titled bank account should be divided.
During their long-term relationship, the couple had agreed that they would use one of their incomes to meet their regular living expenses while the other partner’s income would be deposited into a joint savings account for their future benefits and needs. The partner whose money was deposited into the bank account argued to the court that all of the funds were earned by him and so should all be returned to him, regardless of how this would impact the partner whose earnings were used to support the couple.
The court agreed with this argument based on a law known as the Multiple Parties Bank Account Law, which provides that the money in an account belongs to the person who deposited the funds, thus leaving the other partner in a desperate financial situation. This unfair and inequitable result could have been completely avoided if this couple had entered into a simple cohabitation agreement outlining their understanding for handling their finances during their partnership.
As important as it is for couples to prepare pre-nups and cohabitation agreements, the question becomes whether the agreement(s) will be valid in a state other than the one in which the document was drafted. For example, if a gay couple marries in New York and moves to Virginia, which does not recognize gay marriage, the pre-nuptial agreement that was drafted in New York will not be recognized in Virginia.
Unfortunately, these types of legal issues will continue to complicate gay marriage rights, until there is nationwide acceptance of same-sex marriage.
Ellen S. Fischer of the Law Office of Ellen S. Fischer has been working closely with individuals and families throughout the greater Philadelphia region for more than 20 years. Ellen received her Bachelor of Arts degree from Temple University and returned to earn a Juris Doctor degree from the Temple University School of Law. Ellen serves on a number of leadership committees and is a member of Gay and Lesbian Lawyers of Philadelphia (GALLOP). In addition to LGBTQ services, Ellen's practice areas are family law and personal injury.