Unlucky Winnings: Legal Rights of Unmarried Couples in Pennsylvania
Lessons and considerations for PA couples
Shedding light on the increasingly common lifestyle of cohabitation is a developing New Jersey case surrounding entitlement to lottery winnings where an unmarried couple split prior to the winnings. The controversial, local case raises more questions about legal rights of unmarried couples in Pennsylvania who are cohabitating as though legally married.
The first concept that comes to mind in these cases is the notion of common law marriage. Because it no longer exists in Pennsylvania, there is no legal establishment of a relationship without a formal marriage. Since 2005, the state no longer acknowledges these relationships as common law marriages and there is no assumption that there is marital property or assets for unmarried couples in Pennsylvania.
In the New Jersey case, the couple has a child together, ran a business together, and lived together for ten years but never wed. The court will hear the case, but will not freeze the assets prior to that time as there is no legal framework to do so. The case is attracting attention for the backlash of its possible result, as many Americans turn to the unmarried and cohabitating lifestyle. As a neighboring state, the outcome could eventually affect the legal rights of unmarried couples in Pennsylvania.
Planning ahead - Cohabitation Agreement
For cohabitating couples, there are a options to consider to avoid ending up in a similar situation. In these situations, there are few legal guidelines for dividing assets without a valid marriage; this is why couples should think about drafting a cohabitation agreement. Much more complex than a simple "roommate agreement", this document offers protection in the event of financial and economic disputes. Increasingly popular, this contract sets forth the establishment and possible dismantling of the shared economic life that will inevitably result from the shared living arrangement.
This is similar to a prenuptial but does not rely upon marriage as the initiating event and would be enforced by a civil court, rather than family court. For this reason, the cohabitation agreement is often a good idea for same-sex couples whose prenuptial could not be legitimized by a marriage in Pennsylvania. Perhaps a cohabitating couple decides to purchase a home together; this agreement can outline how the asset would be divided if they split by spelling out the terms of the purchase and each partner's financial contribution.
Titling of Joint Assets
Other important considerations involve title of property and deeds. For example, a joint checking account in both parties' names will assume that every cent deposited is equally owned. Specifying a right of survivorship will clarify what happens in the transfer of the asset in the case of a breakup or if one party pre-deceases the other. This same thinking goes for liabilities too.
Once children are involved, legal rights of unmarried couples in Pennsylvania become even more complicated. It may seem tempting to add a girlfriend to an insurance plan as "wife" based upon the situation. This is of course insurance fraud and the eminent legal fees surely would outweigh the out of pocket costs. Fortunately as a result of continued efforts to obtain equal rights for same sex couples, many straight couples in Pennsylvania are able to obtain coverage under their boyfriend or girlfriend's insurance plans. Some carriers offer packages which require the completion of affidavits or other paperwork that illustrate the relationship.
Beneficiaries and probate laws
Another consideration that is often overlooked has to do with beneficiaries. Be sure to designate your partner as beneficiary on retirement accounts in the event that you pass away. Without doing so, the administrator of the plan will be forced to follow Federal laws or state probate laws. The proceeds of the plan would not be administered to your partner if this is not established.
Other estate planning considerations involve the designation of emergency contacts. It is not uncommon for a partner to be restricted from hospital rooms because he or she is not the next of kin. A power of attorney or living will ensures that a partner is able to maintain access to you and your information during hospital stays or life threatening events. Adding that person to emergency contacts with the insurer also bolsters the importance of the relationship and the partner.
The conversations are not always easy, but planning for life and its many varying paths will only benefit a relationship. If you and your partner were to split, these considerations could deter costly litigation. In the case of the New Jersey couple, the winner has allegedly spent nearly all of the money he received after the hefty taxes were deducted. Sending to family at home in another country and donating a portion, the New Jersey winner probably never thought his ex girlfriend would be able to pursue anything. The outcome of the case could set some groundbreaking precedents for unmarried couples.
If you have questions or concerns about your legal rights as part of an unmarried and cohabitating relationship, contact our office at (215) 942-2100 to schedule a consultation. Our experienced attorneys can provide the guidance and legal options available to safeguard assets and make each party aware of his or her rights.