Common law agreements are legally binding contracts between cohabiting partners who wish to be recognized as married without a ceremony. They detail property, custody, and financial arrangements, and may include provisions for dispute resolution. Dissolution requires legal divorce proceedings.
Some local jurisdictions recognize the validity of a common law agreement. It is a legally binding contract that is entered into by two cohabitants who wish to be recognized as married without a real ceremony. As long as they are legally competent, of legal age and have no legal impediments to the union, the two partners simply agree to marry. A written contract can be drawn up detailing each individual’s rights to shared money, property, and custody of any children.
A common law settlement does not automatically arise through cohabitation. While as valid as a marriage that results from a traditional ceremony, the arrangement typically occurs without a local marriage license. Each partner should have the intention of marrying the other and they should live together for a significant amount of time. Spouses should also formally acknowledge each other as married, using the same last name and jointly declaring taxes. If the couple wishes to dissolve the union, legal divorce proceedings are required.
Oral or written agreements can be made between partners when entering into a common law relationship. Somewhat similar to a prenuptial agreement, a written common law agreement dictates ownership of the property and what happens if either partner dies. If there are children currently involved or if the couple plans to have children, custody rights and arrangements will also be detailed.
Some couples find it advantageous to enter into a common law agreement that separates the details of their relationship from the potential division of assets and finances. One section of the agreement could divide up household responsibilities, such as who does some weekly chores. The relationship section can also detail what social behaviors are allowed, including whether guests are allowed and when.
In terms of property divisions and personal finance, several issues are typical in a common law settlement. Such issues include separate property owned before the relationship, property obtained during the relationship, how to split household expenses, and the dissolution of the relationship by death or separation. Some couples agree to keep ownership of certain assets separate while others decide to keep ownership jointly. Expenses could be split equally in half, split pro rata to income, or shared by pooling both people’s sources of income.
Some agreements will also include a provision for mediation or arbitration in the event of a dispute. Disagreements tend to arise in the event of an imminent dissolution of the relationship and often concern matters that have not been detailed in writing. Adding a dispute resolution clause could help save you the hassle and cost associated with filing a formal lawsuit.
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