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Another Voice: Cohabitation Carries Financial Risk for Partners

The Buffalo News

By Robert C. Baron

With the honeymoon capital of the world in its back yard, Western New York has seen economic factors in earlier decades dramatically change its wedding industry. For better, for worse (for richer, for poorer), recent years have brought more change to this industry, but this time the culprits are cultural shifts.

One major cultural shift was the 2011 enactment of the Marriage Equality Act, which legalized gay marriage in New York. As expected, it had a positive impact on the five-county Western New York region. In 2011, 8,624 marriages occurred regionwide, up 8.2 percent from the previous year, according to a Tully Rinckey PLLC analysis of New York State Department of Health statistics.

However, even with the boost from gay marriage, marriages regionwide were well below average. Demographics may be to blame here, at least partly, along with the recession. Some studies, though, suggest something else is afoot. A USA Today report said the U.S. remarriage rate over the last 20 years declined by 40 percent. One reason: the growing cultural acceptance of and preference for cohabitation. According to Census Bureau data, an estimated 6.2 percent of Buffalo Niagara metropolitan area households were opposite sex unmarried partner households in 2012, up from 4.4 percent in 2005.

Many people view cohabitation as a simplified version of marriage, without the legal constraints. A common misconception is that it simplifies things. For starters, there is no messy divorce. People think they can walk out the door, scot-free. No expensive attorney to pay for. No emotionally traumatizing litigation to endure.

Important things that cohabitants do not have that married couples do have are legal rights that can be enforced in a court of law. For example, under New York’s law of equitable distribution, marital property, which includes home sale proceeds, pensions, bank accounts and other assets acquired during the marriage, is subject to division between the parties. Even marital debt is divided. So if a spouse puts all the credit card debt in his or her name only for expenses related to the marriage, one spouse is not stuck footing the entire bill.

As for cohabitants’ rights, the fact is New York does not have common-law marriage. Parties can live together for 30 years and have no rights in New York. The exception to this rule applies to cohabitating partners who executed a cohabitation agreement, a type of pre-nuptial agreement for the unmarried.

Cohabitation will not sink Western New York’s wedding industry, but it does put those who avoid it by cohabitating at greater risk of financial vulnerability. So people entering a cohabitating relationship and decide not to say “I do” need to ask, “Do I know how this living arrangement can ruin me financially?”


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