The Millennial generation is not merely marrying later but often saying no to marriage altogether. Millennials now make up half of all cohabitating couples in America.
Much has been written about this societal shift. What is often overlooked is what happens when cohabitating couples break up. One of the many benefits of marriage is the protections of divorce laws. Partners who are not married have no legal claim to property, retirement savings or alimony. They don’t even have a formal process other than suing their ex-partners in general court. More and more unmarried couples are entering cohabitation agreements (similar to a “prenup”).
Financially, you’re married. Legally, you’re just roommates.
According to Pew Research, Millennials account for half of the 8.3 million cohabitating couples in the U.S. In 1987, just 10 percent of Baby Boomer couples in their 20’s lived together outside of marriage. Thirty years later, 37 percent of cohabitating couples in their 20’s are not married.
Just like married people, cohabitating couples (Millennials, Gen X’ers and Baby Boomers) purchase cars and furniture together, if not houses. They share the rent. They vacation together and get joint bank accounts. Maybe start a business. They adopt pets and have children together. And if the relationship comes apart, they quickly discover that it really isn’t like marriage.
Unmarried partners have little legal recourse when they “divorce.” Cohabitating partners are not subject under New Jersey law to equitable distribution of their accumulated wealth and debts. It doesn’t matter if you’ve been living together for 10 months or 10 years. There is no entitlement to a portion of a partner’s retirement savings. No claim on the house or home equity if it’s in the other person’s name. No reimbursement for supporting a partner through graduate school. No alimony payments. No inheritance rights. In the eyes of the law, you have lesser rights than business partners.
Cohabitation agreements are not just for gay and lesbian couples
We have seen an increase in Millennials (and older couples who live together) asking about cohabitation agreements. These are legally binding documents similar to a prenuptial agreement or mid-marriage agreement between married spouses. A cohabitation agreement defines which property belongs to each partner if they one day go their separate ways. It may account for equity they have accumulated together, or address credit cards and other joint debts. It may provide for a monetary settlement or ongoing “palimony” support. Some contain a sunset clause after X number of years together. A well-drafted cohabitation agreement can make the process of breaking up more predictable and less painful.
In the absence of a cohabitation agreement, one partner often gets the shaft. The other party drains the bank account and changes the locks. There is no recognition of the partner’s financial contributions or sacrifices. They may lack the financial means to hire a lawyer, and there is only so much a lawyer can do if everything is in the other person’s name. The Law Offices of Rajeh A. Saadeh has represented clients in property settlement agreements who were not married but have significant or complex financial concerns intertwined in the relationship. This is essentially a divorce settlement, achieved through mediation or negotiation, and sometimes litigation.
Not married, but still Mom and Dad
Child custody and child support are not tied to marriage. An unmarried mom cannot simply bar the dad from her child’s life after a break-up. An unmarried dad cannot simply walk away from his financial obligations to the child. When cohabitating parents split up, custody, visitation and support are still governed by the family court, the same as if the mother and father had been married. It may be necessary to go to court to negotiate the terms of co-parenting or to enforce your parental rights.
You do have some legal options
It’s not less heartbreaking for unmarried couples to “divorce.” In many ways, it’s more stressful and unpredictable because of the lack of legal standing or a roadmap forward. Consider talking to an attorney about a cohabitation agreement or (after the fact) a property settlement agreement.
Source: Five Facts About Millenial Households (Pew Research Center)