1. 2
Cohabitation and Premarital Agreements

2. Cohabitation and Premarital Agreements
What is Cohabitation?
Cohabitation is broadly defined as two unmarried persons living together commonly in an intimate relationship.

3. Cohabitation and Premarital Agreements
Cohabitation differs from marriage in several respects
Parties do not have to satisfy any legal requirements to cohabit.
Cohabitation can be terminated without legal process.

4. Cohabitation and Premarital Agreements
Cohabitation differs from marriage in several respects
There is no presumption of parentage when a child is born to a female partner in a cohabiting couple (and hence no duty of child support or right to visitation).

5. Cohabitation and Premarital Agreements
Cohabitation differs from marriage in several respects
If the relationship terminates, division of property may be based on an agreement of the parties or based on equitable relief provided by the courts.
Following termination, absent an agreement to the contrary, there is no duty of support.

6. Documents to Create and Protect Their Rights
What are some of the documents cohabiting partners may use to create and protect their rights?
Health care proxies
Durable powers of attorney
Wills
Deeds reflecting joint ownership of property with rights of survivorship

7. Documents to Create and Protect Their Rights
What are some of the documents cohabiting partners may use to create and protect their rights?
Life insurance policies
Trusts
Beneficiary designations on retirement accounts etc.
Joint partnership agreements
Cohabitation agreements

8. Cohabitation Agreement
A cohabitation agreement is an agreement between two unmarried individuals who live or intend to live together, defining their intentions, rights, and obligations with respect to one another while living together and upon termination of their relationship.

9. Cohabitation Agreement
A cohabitation agreement is a contract and the sole consideration for the agreement must not be "meretricious sex" (prostitution or sexual relations outside of marriage).

10. Cohabitation Agreement
Cohabitation agreements allow parties to privately identify, negotiate, and reach agreement with respect to their expectations, both financial and personal.
For a list of common provisions see Application 2.1 on pages of the text.

11. Forms of Relief
For background, see Case 2.1 Marvin v. Marvin (1976) on pages of the text which popularized the term "palimony"
A court-ordered allowance paid by one cohabitant to another after their relationship terminates

12. Forms of Relief
Without abandoning the strong public policy favoring marriage, the Marvin court endorsed the now widely held principle that when the facts warrant it, the courts should fashion appropriate equitable remedies for cohabitants to avoid hardship or injustice.
Marvin v. Marvin, 18 Cal. 3d 660, 557 P.2d 106, 134 Cal. Rptr. 815 (1976)

13. Major Legal Basis for Granting Relief
Express contract
The parties articulate an agreement.
Implied-in-fact contract
The court infers the parties' intentions from their conduct and the surrounding facts.

14. Major Legal Basis for Granting Relief
Quasi-contract/Implied-in-law contract
The court creates the contract to avoid unjust enrichment of one party at the expense of the other (based on quantum meruit).

15. Major Legal Basis for Granting Relief
Purchase money/Implied/Resulting trust
The court creates a trust when one party contributes the funds for purchase of a property and title is held in the other party's name.

16. Major Legal Basis for Granting Relief
Constructive trust
The court imposes a trust on an asset of a party who wrongfully obtained the asset.
The trust is for the benefit of the wronged party.

17. Major Legal Basis for Granting Relief
Implied partnership/Joint venture
The court creates a partnership based on the conduct of the parties and distributes the assets and liabilities of the partnership based on principles of fairness.
Putative spouse doctrine
The court provides relief to a person who reasonably believed he or she entered a valid marriage.

18. Premarital Agreement
A premarital agreement is an agreement made by two persons about to be married defining for themselves their respective rights, duties, and responsibilities in the event their marriage terminates by death, annulment, separation, or divorce.

19. Premarital Agreement
See Case 2.2 Posner v. Posner (1970) on pages 38 and 39 of the text for context.
"With divorce such a commonplace fact of life, it is fair to assume that many prospective marriage partners…might want to consider and discuss…and agree upon…the disposition of their property and …alimony rights…in the event their marriage, despite their best efforts should fail….A tendency to recognize this change in public policy…is clearly discernible."
Posner v. Posner, 233 So. 2d 381 (Fla. 1970)

20. Premarital vs. Postmarital
Postmarital agreements
Made by two people already married to each other who want both to continue their marriage and also define their respective rights upon separation, divorce, or death of one of the spouses (banned in a small minority of states).

21. Premarital vs. Postmarital
Separation agreements
Made between spouses in anticipation of a divorce or legal separation, concerning the terms of the divorce or legal separation and any continuing obligations to each other.

22. Requirements for Premarital Agreements
The requirements for a valid contract
The requirement of procedural fairness
The requirement of substantive fairness

23. 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 contract in terms of age and mental competence.
An affidavit of competency may be warranted.

24. Requirements for Valid Contract
The subject matter of the contract must be legal.
There must be consideration for the contract (a bargained-for exchange of something of value).
There must be a "meeting of the minds" (a shared understanding of the terms and conditions of the contract).
Must satisfy the statute of frauds

25. Requirements of Procedural Fairness
The requirement of procedural fairness refers to fairness in the negotiation 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.

26. Requirements of Procedural Fairness
Examples of procedural fairness include the following:
Adequate disclosure of assets and liabilities
Did the parties have, or should they have had, knowledge of each other's worth such that each could make an informed decision?

27. Requirements of Procedural Fairness
Examples of procedural fairness include the following:
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

28. Requirements of Substantive Fairness
The requirement of substantive fairness refers to fairness 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?

29. Requirements of Substantive Fairness
The states vary with respect to whether fairness will be measured only at the time of execution or also at the time of performance.
The "second look" approach

30. Requirements of Substantive Fairness
Most courts will not enforce the agreement if its terms are so unfair to one of the parties that they are unconscionable.
They "shock the conscience of the court

31. Provisions in a Premarital Agreement
Agreements vary in length and formality, but generally they include the following basic components:
A Preamble (introductory segment)
A definition of separate property and how it will be treated
A definition of marital property and how it will be treated

32. Provisions in a Premarital Agreement
Agreements vary in length and formality, but generally they include the following basic components:
A 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 rights
A provision relating to death benefits or a waiver thereof

33. Provisions in a Premarital Agreement
Agreements vary in length and formality, but generally they include the following basic components:
General provisions (severability, governing law, etc.)
Schedules of assets and liabilities (may be attached as Exhibits)

34. EXHIBIT 2.3 Sample Premarital Agreement

35. "Red Flags" in Premarital Agreement
The parties cannot agree to engage in criminal activity.
Although they may include child-related provisions, the parties may not bargain away their children's rights to child custody and support.

36. "Red Flags" in Premarital Agreement
They should be advised not to include terms that tread on constitutional rights (to have and raise children, to freedom of religion, etc.) that may taint the entire agreement.

37. "Red Flags" in Premarital Agreement
They may not agree to prosecute or not defend a divorce action.
As non-spouses, they may not waive ERISA governed pension rights in the agreement

38. Three Primary Approaches to Enforceability of Premarital Agreements
The Uniform Premarital Agreement Act (UPAA) approach (adopted in whole or in part in about half the states) is designed to create uniformity and increased enforcement of premarital agreements through application of ordinary contract principles.

39. Three Primary Approaches to Enforceability of Premarital Agreements
The UPAA approach generally favors enforcement unless the party against whom enforcement is sought did not execute the agreement voluntarily, OR

40. Three Primary Approaches to Enforceability of Premarital Agreements
The agreement was unconscionable when it was executed AND before execution, the party against whom enforcement is sought was not provided fair and reasonable disclosure, did not waive in writing such disclosure, and could not reasonably have had adequate knowledge of the property and financial obligations of the other party.

41. Three Primary Approaches to Enforceability of Premarital Agreements
The Uniform Premarital and Marital Agreements Act (UPMAA)
Varies significantly from the UPAA
Drafted and approved in 2012
Addresses both premarital and postmarital agreements and uses same legal standards for both

42. Three Primary Approaches to Enforceability of Premarital Agreements
The Uniform Premarital and Marital Agreements Act (UPMAA)
Idea that parties should be free to choose financial terms of their marriage
Adds new requirement that parties must "have access to independent legal representation"

43. Three Primary Approaches to Enforceability of Premarital Agreements
The Uniform Premarital and Marital Agreements Act (UPMAA)
A court may refuse to enforce any term of an agreement that is unconscionable
If the agreement modifies or eliminates spousal support, a court may order other party to provide support.

44. Enforceability of Premarital Agreements
The traditional fairness approach treats premarital agreements as contractual agreements between people who bear a special fiduciary relationship to each other and therefore holds them to a higher standard than contracts between strangers dealing at arm's length.

45. Enforceability of Premarital Agreements
This is essentially a fairness approach.
Several states have adopted the "second look" or "second glance" doctrine to determine if the terms of an agreement that may have been fair at the time of execution (when the parties executed the agreement) remain fair at the time of performance (when the parties are getting divorced and the court is being asked to actually enforce the terms).

46. Enforceability of Premarital Agreements
The contemporary freedom to contract approach treats premarital agreements as basic contracts.
People are free to make "bad bargains" and a person cannot avoid performance of a contract simply because it seems unfair, unreasonable, or to his or her disadvantage.

47. Enforceability of Premarital Agreements
Absent fraud, misrepresentation, or duress, agreements will be enforced unless enforcement will bring about an unconscionable result.

48. Paralegal's Role
The paralegal's role will largely depend on whether the case involves negotiation and execution or enforcement of an agreement.
Typical tasks may include:
Participating in client meetings and taking notes
Gathering necessary information and documents

49. Paralegal's Role Typical tasks may include: Researching governing law
Researching forms of agreements
Drafting and reviewing agreements
Preparing related correspondence
Making arrangements for obtaining affidavits of competency

50. Paralegal's Role Typical tasks may include:
Drafting discovery requests
Preparing exhibits for use in negotiation, at trial, etc.

51. Paralegal's Role
For more detail on specific tasks the paralegal may perform, see:
Paralegal Application 2.2 Gathering Information in a Cohabitation Case on page 34 of the text
Paralegal Application 2.5 In Anticipation of an Agreement—Tasks for the Attorney and the Paralegal on page 46

52. Paralegal's Role
For more detail on specific tasks the paralegal may perform, see:
Paralegal Application 2.7 Information Gathering Needs If a Premarital Agreement is Challenged in a "Second Look" Jurisdiction—Tasks for a Paralegal on pages 60 and 61 of the text.