Cohabitants Beware

Married couples are not the only ones beholden to a contract. Since 1976, people living together in California may be subject to paying the other support and to dividing pooled assets after a cohabitation relationship goes sour.

Before 1976, the only people on the hook for paying alimony and dividing pooled assets were married couples going through a divorce. After the Marvin case, things changed.

Lee Marvin was a famous actor in Hollywood circa the 1960s and 1970s. After his divorce from Betty, Lee began dating and living with Michelle. Even though Lee and Michelle never married, they entered into a verbal agreement that they would live together, combine their efforts, and earnings and that they would share equally in all property that accumulated during their relationship, whether obtained individually or through a concerted effort. They held themselves out to their community and friends as a married couple, and Michelle gave up her career as an entertainer and singer to be a homemaker, housekeeper, cook, and companion. In return, Lee agreed to provide for all of her financial support and needs for the rest of her life. When their relationship went south, Michelle expected Lee to hold up his end of the bargain. When he didn’t, she sued him.

As California is not a common law state, and financial rights like alimony and community property division were traditionally reserved for married couples only, Lee’s attorneys were not concerned. Indeed, Lee won at the trial court level. But, Michelle appealed. Eventually, the California Supreme Court determined that the verbal contract between Lee and Michelle was valid, and Michelle won.

What this means to legions of people cohabitating in California, regardless of whether they have a romantic or sexual relationship, is cohabitators beware. Before you hand your apartment keys over to your friend or lover, it is good practice to make sure you understand what you could be facing down the road. We suggest you consult with an attorney if any of these situations apply to you and a significant other:

• You are thinking about moving in together;
• You start pooling your assets;
• You start sharing the mortgage, rent, utilities, groceries;
• You start having children together…

Don’t get caught up in a financial twist by accident.