MASSACHUSETTS COHABITATION AGREEMENTS

Massachusetts Does Not Recognize Common Law Marriages

There are only a handful of states (and D.C.) where common law marriages are recognized, and Massachusetts is not one of them. So, for Massachusetts couples wanting to share their lives (and their living areas) with each other, but without entering into a formal marriage, the options are somewhat limited.

If you’re living together in a committed relationship, a cohabitation agreement can provide an understanding for both parties–as well as their legal heirs–about what is being brought into a relationship, and what will happen if the relationship comes to an end. It’s something like a prenuptial agreement, but without the “nuptial” part in it since there’s no formal marriage recognized by the state.

Documenting Your Wishes

Nobody wants to think about death. And yet the more a person has – in terms of both assets and tangible items – the more important it is to get this process rolling.

For instance, the music legend Prince died suddenly at the age of 57, which is the same age David Bowie was when he drew up his will. While neither man lived in Massachusetts or had a cohabitation agreement with someone else, Bowie planned for the future, while Prince did not.

Prince had a compound called “Paisley Park” in suburban Minneapolis. The current status of Paisley Park itself is unknown because Prince died without any directions about what should be done with it after his death. Bowie, on the other hand, left a specific set of instructions that ensured an orderly transfer of his assets to the parties he chose.

Protect Your “Paisley Park”

Each of us has an equivalent of Paisley Park, whether we have a name for it or not. Perhaps someone else is moving into your household. If this is the case, whether or not they continue to live there after your death should be set forth in writing. Likewise, if joint funds are used to purchase and/or furnish your property, the percentage of ownership by each party should be set forth in writing, and a cohabitation agreement is a recognized way to accomplish this.

The percentage of ownership of a property can either be split equally, as in a joint tenancy agreement, or unequally, in the case of a tenancy in common. Either way, an important step is to set forth a valuation procedure for the property itself. A cohabitation agreement can outline an agreed-upon method for determining the property’s value in the event that the property needs to be sold for liquidation purposes. Since a house or other living unit cannot be physically separated into component parts, there needs to be an agreed-upon procedure for determining what the value of the property is.

What if there is a Break-Up?

Not all relationships end with the death of one of the parties. Situations change, and the best time to anticipate this is before it happens, not after the fact.

In some cases, couples may believe that everything is clear, when if fact this may not be the case.  For example, what if one person owns a house in which the couple live, but the other person contributes to the mortgage payments for the house, as well as for maintenance and upkeep?  The person owning the house may be under the belief that because he/she owns the house, the other person is not entitled to anything if there is a split, but this in fact may not be the case.

Cohabitation agreements can contain specific language regarding who owns what, both before and after the cohabitation begins. To ignore addressing this asset issue is foolish because it could lead to lengthy and costly court battles, particularly where there are significant assets involved.

Elements to Consider

The rights of a person to inherit property from someone who dies intestate, or without a will, extend to those who are spouses, parents, children, or siblings of the deceased. If a marriage does not occur, though, a person will not be able to inherit from someone they are not related to by blood or by adoption, unless there is a will or trust that provides for an inheritance. A trust agreement can be used for establishing these rights and a cohabitation agreement can also serve this purpose.

The proceeds of life insurance policies, retirement accounts, and other financial assets must also be taken into consideration. A cohabitation agreement can set forth the wishes of one or both parties in this regard, it’s equally important to change your beneficiary designations on life insurance policies, IRAs, 401(k) accounts and annuities to make sure you’ve designated the person to whom you want these assets to pass and ensure that these items are disposed of in an orderly fashion. Conflicts are less likely to arise, and messy probate battles are more likely to be avoided, where both parties make it clear what their intentions are in advance.

Massachusetts Law Requires Some Navigating

The seafaring traditions of the Bay State go back centuries, and a boat is a helpful metaphor for a cohabitation agreement.

People who agree to bind their fortunes together should know what is to become of the boat once the journey is over. Who gets the boat, and how much it is worth, may not be good questions to settle after the voyage is underway. In fact, a squabble over these matters could very well prevent the smoothest possible sailing on what could be some very rough waves.

Reaching an agreement about these issues beforehand makes sense, and a cohabitation agreement gives both parties peace of mind for the journey, wherever it might ultimately lead them.

Take Advantage of our Free Family Legal Planning Session

Contact us today to discuss the issues relating to cohabitation agreements to help you decide if entering into one is the right decision for you.  During our free Family Legal Planning session, we’ll get to know you and learn about your situation and wishes for asset matters.  Then, we can advise you as to the cost and types of planning that we believe will meet your needs.

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