You have decided to move in with your partner. You have a committed relationship that may even have been blessed by your church, but for a variety of reasons, you will not be married.
It could be that you are both seniors whose spouses have passed away and you may not want to have your assets at risk for your partner’s nursing home costs. You may want to protect your assets for your own children or other beneficiaries. Or it may be that the law does not allow you and your partner to marry.
For whatever reason that you are going to be living with someone, you usually are going to have some type of financial partnership. You may be sharing living and/or housing expenses. You may have a joint account to which you each contribute to take care of common expenses. One of you may have agreed to support the other.
Would it not be a good idea to put your agreement down on paper? If you have a committed relationship, it would make sense that you would want to protect you and your partner, as well as your children or other beneficiaries.
There are a variety of names for this agreement. It could be called a Cost Sharing Agreement or a Domestic Partnership Agreement. I even had one client call it a Shack-up Agreement.
This agreement is a written contract between you and your partner. So what can you put in this contract? Well, Michigan contract law is fairly broad. You can put just about anything in the contract as long as it is not illegal or against public policy.
If you want to say that your partner can live in your house for the rest of their life, as long as they pay the bills and your kids can not kick him or her out, then you can put it in the agreement. If you have joint accounts with your partner that you do not want to go to the survivor but be divided between your partner and your children, you can put that in the agreement. If you have joint property, but you want it to go to your children after you are gone, put it in the agreement.
In this agreement, you should detail your and your partner’s rights and responsibilities during your partnership and also after it dissolves due to death or other causes. Who gets what? How are assets acquired during the partnership going to be divided up? Who pays which debts?
Using a written agreement, both of you are protected, the property of each of you is protected and each of your own children or other beneficiaries are protected.
By: Matthew M. Wallace, CPA JD
Published edited December 27, 2009 in The Times Herald newspaper, Port Huron, Michigan as: Pact can help protect assets in living arrangement