By: Martin M. Shenkman, CPA, MBA, JD
If you have a partner and are not planning on marrying (or you cannot legally marry) you should consider working out a Living Together Agreement. This is analogous to a pre-nuptial agreement that a couple planning to marry would sign, but it doesn't address the possibility of marriage. Because a living together agreement is a newer concept that a prenuptial agreement, and is unlikely to have as much case law governing it, its especially important that you and your partner each hire separate independent attorneys and hire attorneys that have significant experience in preparing such agreements. Extra care is warranted to help assure that if your partnership dissolves the agreement will make that dissolution as easy and reasonable as possible. When negotiating and drafting a living together agreement make up a detailed list with your partner before you sit down with a lawyer as to all of the issues the two of you can think of that might be a problem if the partnership dissolves. Not pleasant, but far better than the consequences of not doing so. Getting a detailed list together, and solutions for those matters which you can in advance will go a long way to making the process of putting the agreement together less costly and less stressful. For example, if you own an apartment together, should one of you keep it or should it be sold? If its a lease, what if the landlord won't let either of you off the responsibility? Be certain to coordinate the planning for your living together agreement with your estate planning documents. Too many partners don't and it can be a huge problem. Example: You sign a power of attorney naming your partner as your agent to handle financial matters for you. That way, if you are sick, disabled, out of the country, your partner can help. If your relationship hits the wall can your partner use that power to undermine your finances? Think carefully. Many powers give the agent the unlimited right to make gifts of your assets. Is that appropriate at this point in your relationship? Be sure that you attach detailed financial records and other disclosures to the agreement, have each attorney sign it as well. Be sure you each have copies of the entire package in a safe place. As with any complex legal arrangement, use self help books and sample documents to save time, cut costs, and to think through issues with your partner in advance. NEVER use them as a substitute for competent professional advice. You'll pay in the long (and maybe short) run.
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