In today’s time, marriage rates have been steadily declining. According to the 2023 Census Bureau, marriage rates have been on the decline over the last 10 (ten) years and as of 2021 they were at the lowest they have been in history. Whether it’s due to young people avoiding or delaying marriage, our nation’s emphasis on individuality and personal success, or a myriad of other factors, the bottom line is that more and more people are choosing to cohabitate and have children with their partners before marriage. So what does this mean for you?

The first thing to know is that people break-up all the time, whether they are married or not only dictates how easy the break-up process will be. Both break-ups and divorces can be messy, emotional, and legally complicated. We’re here to help with both.

The second thing to know is that there is no common-law marriage in New Jersey. So no matter how long you guys date or live together, and regardless of whether you have children, shared bank accounts, life insurance, or anything of the sort, the courts of New Jersey will always regard you as cohabitating partners, not a married couple. That means couples who live together but aren’t married don’t have the same legal rights and protections as they would if they were married, which can be both a positive and a negative thing. So let’s talk about it.

What happens if you guys buy a house together or move into each other’s home?

Buying a house together can be risky whether married or not. But here’s the gist of what you can expect in these different scenarios.

• You (or your spouse) owned the house before marriage. Now you’ve married and you live together in that home.
  
  
• You and your spouse are married, and you bought a home together after you were married.
  
  
• You and your partner are living together in a house that one of you owns.
  
  
• You and your partner bought a house together.
  
  Scenario 1: You or your spouse owned the house before marriage. Now you’ve married and you live together in that home.
  
  In this case, the money that you (or your spouse) put down for the house and the payments made up to the date of your marriage will likely be considered your separate property, meaning that if the home ever sold, you would get that back. The money paid towards the home after you are married is usually considered joint property, meaning that if you ever got divorced or the home was sold, your spouse would be entitled to a portion of that amount. Now, the only way to guarantee that the home remains separate property is a prenuptial agreement. Otherwise, it will be a fight to try to prove that the home was not commingled and used by both of you making it marital property. The presumption is that once you're married, everything you own and earn and use together is marital property, so even if you used your own paycheck to pay the mortgage alone, your paycheck is joint property, so making the payments on the home makes it joint property as well. It’s possible to argue the home is still separate property, but it’s not an easy battle to win.
  
  Scenario 2: You and your spouse are married, and you bought a home together after you were married.
  
  In this classic scenario, the house is almost always treated as a full marital asset. If the down payment was made from assets acquired before you two were married, there is an argument to be made that the down payment is separate property, but it is more likely that the court will view your contribution to the down payment of the home as a clear intent to commingle the funds and to invest in a joint asset. Again, without a prenup, the court will likely view any property acquired during marriage as joint property, regardless of where the money came from. That means that in the event you two get divorced, your spouse is entitled to part of the equity accumulated in the home.
  
  Scenario 3: You and your partner are living together in a house that one of you owns.
  
  Cohabiting couples have the opposite presumption of married couples. For married couples, everything they do or buy or invest in is assumed to be a joint asset unless there is clear proof (such as a prenup) that they both agreed to keep that asset as separate. The same goes for their debt. On the other hand, for couples that live together but aren’t married, the assumption is that anything they acquire is separate property, often even if they purchased it together. So what that means is that if one of you owns a home and moves your partner in with you, it is still your home. Even if they help you pay the mortgage, that does not mean they will automatically be entitled to some of the equity in the home. The house is and always will be yours only, unless you intentionally modify the deed to include this other person’s name. If you do that, you are declaring to the world and to the courts that you intend this property to be treated as a shared asset. In the event of a break-up, that other partner would then be entitled to equity that they poured into the home.
  
  Scenario 4: You and your partner bought a house together.
  
  This can be complicated, but one of the most important factors is the type of ownership you guys choose to have listed on the deed. You guys can choose to purchase the home as “joint tenants with rights of survivorship” or as “tenants in common.” The first option, joint tenants with rights of survivorship, gives you both an equal and undivided right to use and possess the property. That means that you each own 100% of the property. It’s not 50-50. This means that if one of you dies, the other will automatically inherit the entire house. Alternatively, as tenants in common, you each own a specific share of the home. Most couples choose 50-50, but it doesn’t have to be an even split. What this means is that you each own a specific percentage of ownership in the home. If one of you dies, that percentage will pass along to anyone you indicated in your will, or to your estate, or your heirs, depending on what your estate plan is.
  
  Without bogging you down with details, our best advice is to draft a property agreement. It can outline all the needed specifics:
  
  
  • Who owns what?
  • Who pays and how much?
  • Do you have the first right to stay in the house or buy the other partner out of the home if you two break-up, or will you guys sell the house and split the proceeds?
  • If a buy-out is an option, how will you have the home appraised? How long do you have to pay the other partner?
  • What happens if you are unable to refinance the mortgage solely in your name?
     
    These details can be especially significant when there are children involved.

Equally as important as a property agreement, are parenting agreements and palimony agreements. Like a prenuptial agreement, these are documents that you and your partner prepare that will dictate how things will go in the event that you break-up. This can be ideal if there is an unequal financial situation, such as one partner staying home while the other works, or if you two plan to acquire assets together, have children together, or even own a pet together. It is best to make the agreement early on in the relationship when you are both understanding, loving, and thinking about making fair and equitable choices, rather than waiting until the relationship deteriorates and choices are being made from a place of hostility, vengeance, or pettiness.

A parenting agreement can include plans on who the child will live with, a visitation schedule, plans for where the child will go to school, who will pay medical and health costs including insurance. It can also reference how you will agree on and divide the costs for extracurricular activities, how you two will find childcare and how those costs will be divided, and more. Child support, traveling outside of the country, special needs, introducing new partners, all of this can be outlined.

A palimony agreement can outline economic protections for a dependent partner. For example, if one partner stayed home with two children while you were together, in the event of a break-up, will the income-earning partner provide for the stay-at-home partner for a period of time to give them time to find a job, go to school, or do what is needed to reenter the workforce? Will the income-earning partner continue to contribute for the other’s healthcare costs, car payment, things of that nature? Without marriage, there is no obligation for any of this to be provided. A palimony agreement can be crucial for cohabitating couples.

If you believe that your relationship would benefit from a cohabitation, palimony, or property agreement, talk to your partner and seek the advice of a knowledgeable attorney. You and your partner should know about the rights and protections available to each of you, and how you can both protect yourself against any possible future harm. Our skilled attorneys are here to give you valuable advice to help guide you.