Health Care Power of Attorney and Living Wills Are Important

For those living in Pennsylvania, the Allegheny County Bar Association (ACBA) has launched a webpage to make the public aware that they can now do their own Health Care Power of Attorney and Living Wills. These forms have been endorsed by the ACBA and the Allegheny County Medical Society. This is especially important for members of the LGBT community, as if you do not have these documents, under Pa. law, your partner is last on the list under the Pa. statutes to make health care decisions for you.

This does not eliminate the need to do estate planning, but when you do your estate planning, this means the attorney’s work on this portion of the estate planning becomes more efficient.

http://www.acba.org/Public/Legal-information/Living-will-Healthcare.asp

Domestic Partner/Cohabitation Agreements: Separation

by Maureen B. Cohon

This is final piece in a three-part overview of domestic partner/cohabitation agreements. Part one discussed financial and property matters, and part two covered family issues. The final installment below addresses how these agreements can smooth the process of separation.

Potential Separation
In the unfortunate event of a separation, a domestic partnership agreement can save the parties the time and expense of litigating their rights and obligations, particularly with respect to property. Clients who contact us after deciding to terminate their partnership most often find parting less stressful if there is a signed agreement that states the partners’ wishes.

Questions to Consider

  1. What would happen if the relationship was no longer working for you or your partner?If you have an agreement most of the issues, which could cause problems, would be covered.  Parting will still be painful, but the agreement will be determined by you before the separation. The agreement would have addressed:
    1. How the notice of termination is given to each other.
    2. The time limits for the purchase or sale of the home and the distribution of the equity if it is a joint ownership.
    3. Distribution of your joint accounts.
    4. Issues regarding children.
    5. Any other issues that you determine you want in the agreement.

 Remember: each couple is different, and the issues addressed here (and in parts one  and two) will not apply in every circumstance. Domestic partner/cohabitation agreements, like most family law matters, need to be tailored to the individuals it serves.

While agreements are not easy to talk about while you are happy with each other, it is better to talk now than at the end of a relationship. Of course, the best outcome would be to create and sign the agreement and then put in a safe place and never have to look at it again!

Domestic Partner/Cohabitation Agreements: Family

by Maureen B. Cohon

This is part two in a three-part overview of domestic partner/cohabitation agreements. Part one discussed financial and property matters that can be addressed in these agreements. Below, part two will cover family issues.

Family & Living
One of the many purposes of a domestic partner/cohabitation agreement is to document for a court and any other interested parties (i.e. an employer from which you wish to obtain domestic partner benefits) the “family nature” of the cohabiting parties’ relationship and living arrangements.

Questions to Consider

  1. Are there children living with you? What are the responsibilities of the nonparent?
  2. Are you and your partner thinking of having children or adopting? Will one partner carry the baby and the other partner adopt after birth? Are you considering a surrogate or anonymous or known sperm or egg donor?

There are many ways to have children; couples should talk to someone, such as an attorney experienced in adoptions and related issues, to create a written agreement that outlines parenting expectations.

For example, after the baby is born and before any adoption, you may want an agreement that states your wish for your partner to adopt the baby and until the time of the adoption she/he will share responsibilities for the baby and be the guardian. This is important because if something happens to the adoptive or birth parent, the Court and relatives know your wishes regarding your child. Or, if a second parent adoption is not allowed in your state, you may want to have a document stating that you want your partner to adopt your baby at the time such adoption is allowed in your State, and the non-adopting parent shall be the child’s guardian until such adoption.

Please check back for more information on Potential Separations.

 

Domestic Partner/Cohabitation Agreements: Finances & Property

by Maureen B. Cohon

If you can’t marry in the state you live in – or if you do not want to marry – domestic partner/cohabitation agreements (the terms are interchangeable) can help you make a plan for your partnership.

In broad terms, these agreements address the sharing of assets and expenses, and can document for a court and any other interested parties (i.e. an employer from which you wish to obtain domestic partner benefits) the “family nature” of the cohabiting parties’ relationship and living arrangements. Specifically, these agreements may define the partners’ financial obligations to one another and to their children, clarify the ownership of major assets such as real or personal property, and protect the partners’ rights should they ever terminate their relationship.

In the unfortunate event of a separation, a domestic partnership agreement can save the parties the time and expense of litigating their rights and obligations, particularly with respect to property. Clients who contact us after deciding to terminate their partnership most often find parting less stressful if there already is a signed agreement that states the partners’ wishes.

In the next three posts, we’ll cover three broad categories of issues Domestic Partner/ Cohabitation Agreements can help address – finances & property, family, and potential separation.

Finances & Property

If you are living with someone, domestic partner/cohabitation agreements can outline what you and your partner will each contribute to living expenses, mortgage, utilities, entertainment, real estate taxes, homeowners or renters insurance and other items relating to your place of residence or any other shared property.

Questions to Consider

  • Do you have – or will you open – joint banking or checking accounts, joint credit cards, or investment accounts? You might want a joint account for only household purchases and separate accounts for credit card purchases or paying for personal items. If you have or want joint accounts of any kind, you may want to have both signatures for any withdrawals over a certain amount. If you and your partner decide to separate, how will you split the accounts?
  • How is your home titled?
  • If the home you live in is titled in one partner’s name:
    1. Did the non-owner partner contribute money to the purchase of the home?
    2. Does the non-owner pay any amounts to the mortgage for the property you are living in? What about for improvements on the home?
    3. Do these payments give the non-owner partner any ownership interests in the home?
  • If the home or other real property is owned jointly,
    1. Did each partner share the down payment and settlement costs equally and/or share the mortgage payments equally?
    2. If you sell the home, how will the equity be distributed? Will it be in proportion to the amount paid on the home by each, equally, or some other way? How do you determine the value of the house? How soon does it have to go on the market?
    3. If you separate, who will have the right of first refusal to purchase the home? In what amount of time?
    4. If one partner moves out, will that partner have to continue to contribute to the mortgage, utilities, etc.?
  • Is there property in the home that you brought into the household? Do you want the property to remain yours after a termination? This “separate property” could include family heirlooms or inherited property or property that just has sentimental value to you. Most couples have such property and agree that it belongs to the original owner.

Please check back for more information on Families and Potential Separations.

 

Real Property Series – Part 1 of 4: Alternative Ways to Hold Real Property

By B. Lafe Metz, Esq. & Tyler S. Dischinger, Esq.

This four part series addresses several broad issues encountered by nontraditional couples regarding the acquisition, ownership and transfer of real property. (See NOTE.)

While most married couples own real estate in a form of ownership called “tenants by the entirety,” this form of ownership is not available for nontraditional couples in jurisdictions where they cannot legally marry. As a result, nontraditional couples frequently seek other forms of property ownership that can replicate the benefits of a tenancy by the entirety or achieve other goals of the couple.

Alternative Ways to Hold Real Property
There are two primary alternative ways to title real property for nontraditional couples: (1) joint tenancy with right of survivorship and (2) tenancy in common. It is helpful to understand the unique attributes of each type of ownership to make the best decision for your family about how to own property. A discussion with counsel about your unique circumstances will help determine the best form of property ownership for your family.

Joint Tenancy with Right of Survivorship
The first type of ownership often used by nontraditional couples is a joint tenancy with right of survivorship. Here are some key attributes of this type of ownership:

  • Both parties have equal ownership of the property. This is often described as an “undivided 50% interest in the whole,” as there is no dividing line or portion of the property owned by each tenant, but rather the entire property is jointly owned by both tenants equally.
  • Unless the parties agree otherwise in a joint tenancy agreement, both joint tenants share in any income or gains, as well as in the duties and obligations of owning the property. For instance, if the property is leased, or sold at a gain, the joint tenants would share the lease income or sales proceeds 50-50. Similarly, obligations like maintenance, taxes, insurance, utilities and other costs are shared 50-50.
  • When the first joint tenant dies, full title to the property vests automatically in the surviving joint tenant outside of a will or probate.
  • While the vesting of full title in the second tenant to die provides some simplicity and replicates benefits available to traditional couples, it may also complicate estate planning for nontraditional couples. For example, since title to the property vests automatically in the surviving tenant, the first joint tenant to die has no ability to leave a share of the property to an heir. Where the couple has children or other joint heirs, this may not be an issue. But if there are no children or joint heirs, 100% of the property would pass to the heirs of the second member of the couple. The person who dies first would lose the power to direct who would inherit an interest in the property. Nontraditional couples can address this issue by identifying joint heirs when they purchase the property (with the ability to change the designations later) or by agreeing that on the death of the second member of the couple, the property will be sold, with the proceeds split equally between each party’s designated beneficiaries.
  • Absent a contractual prohibition, a joint tenancy may be terminated at will by either member of the couple, which converts it to a tenancy in common (discussed below). To alter this result, the parties can enter into a joint tenancy agreement that provides alternative methods for the dissolution of the joint tenancy or transfer of interests in the property.
  • A joint tenancy can be challenging in an unpredictable relationship, because either joint tenant can “hold out” and effectively prohibit the sale or encumbrance of the entire property absent their consent. A joint tenancy agreement can also help to address this issue with a buy-sell provision often referred to as “I cut you choose.” This allows one party to name a price for the buyout, and then the other party must choose either to buy the remaining share or sell his/her share at that price.
  • Property owned in a joint tenancy may be subject to the claims of both tenants’ creditors.
  • Many jurisdictions require that if the property is owned in a joint tenancy it must be noted on the deed.

Tenancy in Common
The second type of property ownership frequently used by nontraditional couples is a tenancy in common.

  • In a tenancy in common, each partner owns a specified portion of the property. Unlike a joint tenancy, in which each party owns an undivided 50% interest in the whole, tenants in common may hold property in any proportion (e.g. 80-20 or 65-35).
  • Either party may dispose of, convey, or encumber his/her share of the property as he/she wishes, absent a contrary contractual agreement. Tenants in common frequently enter into contracts governing the sales process and restricting the parties’ rights to encumber the property. For example, a tenancy in common agreement often provides each party a right of first offer and/or right of first refusal to purchase the other party’s share before it may be sold to a third party.
  • Because there is no right of survivorship, when a tenant in common dies, his/her interest in the property does not automatically pass to the other tenant in common. Rather, it passes under their will (or under the intestacy statutes of the state, should the decedent not have a will at death).
  • If there is any ambiguity about the form of ownership in which a property is held, most jurisdictions presume a tenancy in common as the default rule.

Please check back tomorrow to read the second part of this four part series that will address issues and complications that may arise when one partner already owns property.

NOTE: This outline provides a quick review of key issues and is intended for reference only.  Additional understanding of a couple’s circumstances and goals would be needed to provide specific advice about any real property transaction.  The practical details also may vary by jurisdiction.

Part II: Domestic Partner or Cohabitation Agreements – Questions to Consider

By Maureen Cohon, Esq.

Clients who contact us after deciding to terminate their partnership most often find parting less stressful if there is a signed domestic partnership or cohabitation agreement. After all, agreeing on property issues is a lot harder when the enchantment is lost. If you have ever ended a relationship or seen friends who have ended their relationships, you may better understand why a domestic partner agreement is important.

If you still have doubts about the importance of this agreement, consider the following:

Living Together
If you are living with someone, this agreement will let each of you know what the other expects out of the living arrangements. Consider discussing the following with your partner:

  1. What will we each contribute to living expenses, mortgage, utilities, entertainment, real estate taxes, homeowners or renters insurance and other items relating to our place of residence or any other shared property?
  2. Do we have – or will we open – joint banking or checking accounts, joint credit cards, or investment accounts? There are pros and cons to having these accounts since each partner has no control of the others access to the funds. Joint credit card accounts allow both partners to use the card and both partners are responsibilities for payment. Before opening such accounts, ask these questions:
    • Do you really need joint accounts? Maybe you would want a joint account for only household purchases and separate accounts for credit card purchases or paying for personal items. If you have or want joint accounts of any kind, you may want to have both signatures for any withdrawals over a certain amount.
    • If you and your partner decide to go separate ways, how will you split the accounts?

Children
Are there children living with you or do you plan on having children together? There are many times when children may be visiting or living in the home. What are the responsibilities of the nonparent? Are you and your partner thinking of adopting? Will one partner carry the baby and the other partner adopt after birth? Are you considering a surrogate or anonymous or known sperm or egg donor?

There are many ways to have children and each situation is different. There are so many issues to consider both before and after bringing a child into a family. Each of the above situations has different issues involved and the couple should talk to someone, such as an attorney experienced in adoptions and related issues, to create a written agreement that outlines parenting expectations.

For example, after the baby is born and before any adoption, you may want an agreement that states your wish for your partner to adopt the baby. Until the time of the adoption she/he will share responsibilities for the baby and be the guardian. This is important because if something happens to the adoptive or birth parent, the Court and relatives know your wishes regarding your child. Or, if a second parent adoption is not allowed in your state , you may want to have a document stating that you want your partner to adopt your baby at the time such adoption is allowed but be the child’s guardian until such adoption.

Home Ownership
Is the home you live in titled in one partner’s name? You may want to define the following:

  1. Did the non-owner partner contribute money to the purchase of the home?
  2.  Does the non-owner pay any amounts to the mortgage for the property you are living in?
  3. What about for improvements on the home?
  4. Do these payments give the non-owner partner any ownership interests in the home?

Is the home or other real estate property owned jointly?

  1. Did each partner share the down payment and settlement costs equally and/or share the mortgage payments equally?
  2. If you sell the home, how will the equity be distributed? Will it be in proportion to the amount paid on the home by each, equally or some other way? How do you determine the value of the house? How soon does it have to go on the market?
  3. If you separate, who will have the right of refusal to purchase the home? In what amount of time?
  4. If one partner moves out, will that partner have to continue to contribute to the cost of the home?

Other Property
Do you each have property in the home that you intend to share? Do you want the property to remain yours after a termination?

This “separate property” could include family heirlooms or inherited property or property that just has sentimental value to you. Most couples have such property and agree that it belongs to the original owner.

Separation
What would happen if the relationship no longer works for you or your partner?

If you have a domestic partner or cohabitation agreement most of the above issues, which could cause problems, would be covered. Parting will still be painful but the agreement will be determined by you before the separation. The agreement should address:

  • How the notice of termination is given to each other
  • The time limits for the purchase or sale of the home and the distribution of the equity if it is a joint ownership
  • Distribution of your joint accounts
  • Children
  • Any other issues that you determine you want in the agreement

Each couple is different and this agreement is tailored to the couple’s needs. There are many issues that we can address in an agreement, but I think the above are good discussion starters.

While agreements are not easy to talk about, it is better to talk while you are feeling more generous than at the end of a relationship. Of course, the best outcome would be to create and sign the agreement and then put it in a safe place and never have to look at it again!

Part I: Domestic Partner or Cohabitation Agreements – Why & What

By Maureen Cohon, Esq.


Why would you want to have a domestic partner or cohabitation agreement? (I use these words interchangeably.) But first, who needs such an agreement? Our Nontraditional Couples & Families Group is comprised of those persons who can’t marry and those who don’t marry. Gays and lesbian couples are the largest group of our clients, but there are many clients who don’t marry for various reasons. For instance, senior adults, who may have been married for many years and had accumulated wealth with their deceased spouse. They and their new partner may love each other very much but may decide to live together thereby protecting those accumulated assets for children. We have clients in their 30’s and 40’s who have children and may want to live together with another person of the opposite sex. They may move into one or the other person’s home and they may need to have an agreement that allows them to tell the other person that the living arrangement is not working and the non-homeowner should move out. All of these couples have the same problems as any unmarried couple.

Virtually all couples say to me “we don’t need to talk about this as things are fine and why do I need this anyhow?” These are good questions.

Here are my questions to you:

  1. Are you living with someone?
  2. Are there children living with you?
  3. Is the home you live in titled in one partner’s name?
  4. Is the home owned jointly?
  5. Do you have property that you brought into the joint household which has value (monetary or sentimental value)?
  6. What would happen if the relationship is no longer working for you or your partner?

In the absence of the ability to marry in the State that you live in or if you do not want to marry, this agreement will help you make a plan for your partnership. These agreements address the sharing of income, expenses and property and can document for a court and any other interested parties (i.e. to obtain domestic partner benefits from an employer) the “family nature” of the cohabiting parties’ relationship and living arrangements. This agreement may define the partners’ financial obligations to one another and to their children, clarify the ownership of major assets such as real or personal property, and protect the partners’ rights should they ever terminate their relationship. In the event of a separation, a domestic partnership agreement could save the parties the time and expense of litigating their rights and obligations, particularly with respect to property. It may also prescribe alternative dispute resolution, such as mediation, as a way of resolving issues concerning enforcement of provisions contained within or outside of the agreement.

This is a document that can make the partners think and talk about issues they really don’t want to think or talk about. While this is a hard, but necessary conversation, you will feel better when the decisions are made and placed in an agreement

Check back next week to learn why this type of agreement would be useful and important to do when your partnership is going well.

Would you like to further discuss your rights and these types of agreements?  Contact us.