Differences Dividing Assets in Marriage and Cohabitation

Every day, Pennsylvania couples are falling in love and making plans for the future. Whether the plans involve marriage or moving in together, it is wise to think through decisions and how those choices may affect the lives of both parties.

Some couples plan for the future with prenuptial or cohabitation agreement. This provides security for both members of the couple if the relationship ends.

Legal Differences Between Marriage and Cohabitation

The difference between marriage and cohabitation extends beyond simply a white dress and a big party. For couples choosing to cohabitate in Pennsylvania thinking that if it does not work then they will simply part ways, it is much more complicated. Leases, mortgages, loans, pets, children, shared finances and investments, power of attorney, health care directives and wills are all things that may be impacted when ending a cohabitation relationship.

Legally marriage and cohabitation are quite different.

Marriage is a legal contract defining benefits—like tax breaks, joint filing of taxes, social security benefits, legal decision-making, inheritance, health insurance, companionship and security—as well as protection for both spouses in the case of a divorce.

Legal protections provided from marital relationships during divorce include outlining the division of property as well as assets and debts, alimony or spousal support and child custody. Also, children who are born in a marriage must be financially supported during the marriage. Prenuptial agreements can help to make divorces less complicated with predetermined division points outlined.

Cohabitation has many fewer legal requirements and protections. There is no legal contract between the two parties. There are no legal stipulations about who will be responsible for paying the mortgage or rent, who gets to keep the pets or the unfair nature of one partner working to finance the other’s schooling to earn a higher paying job and then leaving. Additionally, the male in the relationship does not have an immediate legal obligation to support any children born during the cohabitation, until paternity is established.

Another gray area with cohabitation includes comingled property. If one partner has a car prior to the relationship and the other partner pays off the car during the relationship, who owns the car? It is no longer a recognized separate asset for either partner.

These reasons clearly outline meeting with a Pennsylvania family law attorney to set up a cohabitation agreement should be the first move a cohabitating couple makes.

Preparation Provides Protection

Prenuptial Agreements

As the number of marriages that end in divorce has hovered around 50 percent for years, most states have developed laws to legally end the marriage, assign custody of children and equitably divide assets obtained during the marriage. Every divorce has its own set of challenges and emotional pain. A prenuptial agreement in Pennsylvania may provide important protection and guidance with any divorce, but especially an emotionally-draining divorce.

A prenuptial agreement protects the interests of both spouses, outlining responsibilities for financial support, each party’s responsibility for certain debts (premarital or marital) and how property will be divided. These contracts are created and signed before the wedding—when neither party is emotional about a break-up and can rationally and logically think out how the division of assets would best work. Prenuptial agreements can override both community property law and equitable distribution state laws.

Prenuptial agreements cannot do everything though. They cannot eliminate determine child custody, child support payments, dictate custody of unborn children, dictate personal behavior or do anything that would be considered promotion of divorce.

Lepley, Engelman, Yaw and Wilk, LLC’s Pennsylvania family law attorneys advise that each partner has his or her own attorney review the prenuptial agreement before signing.

Cohabitation Agreements

Cohabitation seems simple when beginning a relationship, but, if the relationship sours, ending cohabitation can be complicated and emotionally exhausting.

In Pennsylvania, there are few legal protections for couples in cohabitating relationships when they choose to split up. This can be problematic when dividing property and seeking financial support. Lepley, Engelman, Yaw and Wilk, LLC’s family law attorneys strongly advise cohabitating couples in Pennsylvania to create cohabitation agreements to best protect themselves.

Cohabitation agreements share some similarities with prenuptial agreements, but serve as more of a “living together contract.” Cohabitation agreement contracts outline financial obligations of the couple, division of household maintenance costs, as well as how assets and debts will be handled in the relationship.

Other things that can be included in the cohabitation agreement include: who receives physical property, investments, or earnings; outline support for a partner with lesser means; and who will pay for different costs or bills related to a home.

Pennsylvania family law attorneys, like Lepley, Engelman, Yaw and Wilk, LLC, recommend including a clear set of dates for the cohabitation agreement to take effect and specific events that determine the relationship is over.

Setting up a Prenup or Cohabitation Agreement

While there are online templates for agreements, couples will achieve the best outcomes by using a licensed family law attorney in Pennsylvania. The legal field is very complex and when facing an emotional and difficult break up, having the protection of a contract that was drawn up by a lawyer who focused on your best interest will greatly benefit you. Additionally, working with a family law attorney provides the ability to ask questions, an expert to anticipate needs in your unique situation and weed out the possible shortfalls you may have with a generic, cookie-cutter template.

Our firm also recommends a prenuptial agreement or cohabitation agreement if you or your partner have sizable assets, debts, property/properties or expected inheritance.

Lepley, Engelman, Yaw and Wilk, LLC’s family law attorneys and staff have dedicated expertise in family law, decades of experience in the field and sensitivity to handle your prenuptial agreement or cohabitation agreement with wisdom and insight.

Contact us today to learn more about our prenuptial agreement and cohabitation agreement services and how we can help to prepare you and your partner for the future.


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