Arizona is a community property state. Therefore, when a married couple divorces, all property acquired by the spouses during the marriage is treated as belonging equally to both spouses, and all assets and debts will be equitably divided between the parties. However, there is little law in Arizona addressing the end of a relationship between co-habitating couples. Cohabitation is defined as a relationship between two individuals who are not related by blood but live in the same residence. Co-habitating couples are not married, either because they have no legal right to do so, or have decided for reasons of their own not to formalize their relationship into a marriage. Arizona does not recognize common law marriages, and Arizona only applies community property law to married couples. Therefore, when a relationship between a domestic partners ends, the distribution of assets and debts is usually governed by general contact law. However, the use of general contract law in such situations often creates inequitable results, as co-habitating couples rarely solemnize their living arrangements into a formal, written contract.
Some protections exist under several areas of Arizona law that can assist domestic partners at the end of a relationship. A brief description of those protections and how to obtain these items follows.
City of Tucson Domestic Partnership Registry
In 2003, the City of Tucson enacted a domestic partnership registry. In order to register a partnership, the partners must affirm that they are not blood relatives with a closer relationship than what would prevent marriage in the State of Arizona, that neither party is married, that the partners are over the age of eighteen, that they are competent to enter into a contract, that they are each other’s sole domestic partner, and that they currently share a residence, share a relationship of mutual support, and declare that they intend to remain in the partnership in the indefinite future.
The language of the domestic partnership registry is gender-neutral, so it is open to any couples who wish to participate and meet the above-qualifications. The cost of entry into the domestic relationship partnership registry is $50.00. There is no requirement that registrants reside in the City of Tucson.
Participation in the City of Tucson Domestic Partnership Registry confers two benefits on to participants: registered partners have a right to visit his/her partner in a health care facility as long as the patient partner consents,
and registered partners enjoy a right to extended use of and access to city facilities as if the registered domestic partners were spouses.
Cohabitation Agreements
Co-habitating partners may also enter into a contractual agreement defining ownership of assets, responsibility for debts, and respective roles in the relationship. These contracts are called cohabitation agreements. Cohabitation agreements must comply with general contract law. Therefore, the terms of the agreement must demonstrate a bargained-for exchange (ie, each person gives something, and each person gains something). It must be sufficiently specific as to its terms so that each party has a clear idea as to his/her respective responsibilities and benefits. The terms of the contract also cannot be the product of fraud, duress, or be unconscionable.
Two Arizona cases address the enforcement of cohabitation agreements. The first case was Cook v. Cook, which was decided by the Arizona Supreme Court in 1984. This case involved a couple that lived together for several years and acquired property that was held as joint tenants with the right of survivorship, including bank accounts, stock, vehicles, and a home. When the relationship ended, the man kept the majority of the property, and the woman sued him on a theory of implied partnership. The Supreme Court found that the parties had an express agreement and intention to share the items they purchased, even though that agreement had never been reduced to writing. The Court held that a contractual promise "may be inferred wholly or partly from conduct, and there is no distinction in the effect of the promise whether it is expressed in writing, or orally, or in acts, or partly in one of these ways and partly in others." Cook v. Cook, 142 Ariz. 573, 576 (1984). An agreement between co-habitating partners is therefore enforceable, provided that "it is supported by consideration and that consideration is not contrary to public policy." Id.
The concept of adequate consideration was further defined two years later in Carroll v. Lee, where a women sued her former partner for partition of their property under a theory of implied contract. In this case, the man’s contributions to the partnership were largely financial in nature, whereas the woman’s contribution was homemaking services. The Arizona Supreme Court held that consideration is defined as "a benefit to the promisor and a detriment to the promisee" and that "consideration need not be of like or identical value" Carroll v. Lee, 148 Ariz. 10, 13 (1986). In fact, "courts do not ordinarily inquire into the adequacy of consideration." Id. The Supreme Court held that the woman was entitled to a portion of the property acquired during the relationship.
Therefore, a cohabitation agreement will generally be enforceable under Arizona law provided that there is consideration for the agreement, and that consideration does not violate public policy. The primary consideration concern in such agreements will be demonstrating that the consideration is not based on the meretricious (sexual) nature of the relationship, as this would violate public policy. However, since the Court will not inquire into the adequacy of consideration, as long as the partners are both contributing something tangible other than sexual favors in the relationship, the consideration will be sufficient.
The above-discussed cases saw enforcement of two separate cohabitation agreements that were never reduced to writing. Both of the situations in these cases could have been avoided or resolved with less litigation if the agreements had been placed in writing and signed by both parties after full disclosure of all assets and debts, and receiving advice from attorneys.
Estate Planning
Several estate planning options can serve to protect partners in a co-habitating relationship in the event of the incapacitation or death of a partner. These options include wills, powers of attorney, and trusts.
Wills
A will is a document in which a person (the testator) expresses his/her wishes as to what happens property owned by the testator after the testator’s death. In order to be valid in Arizona, a will must be in writing, executed (signed) by a testator who is over the age of eighteen and of sound mind, and witnessed by two individuals. The testator may appoint a personal representative in the will. The personal representative is then charged with implementing the wishes described in the will after the testator’s death and winding up the testator’s affairs.
The testator may also name beneficiaries in the will. A beneficiary is an individual or entity that is given property under the terms of a will. A beneficiary can receive any amount of property in the estate, or the testator can make specific bequests to a beneficiary. Naming beneficiaries in a will allows co-habitating couples to opt out of the intestacy property distribution scheme. When a person dies intestate (ie, without a will), property is distributed to the deceased’s family members. A partner in a co-habitating relationship can thus name his/her partner as the beneficiary of the estate if the partner makes a will, and that partner would be entitled to everything owned by the partner at the time of the partner’s death after the deceased partner’s debts are satisfied by the estate.
The testator can also name another person to act as guardian of the testator’s child in a will. This power can offer some protection for the family unit of a co-habitating couple. Of course, such protection is unnecessary if the partners are both legally the parents of the child. However, if the child is adopted, it is likely that only one parent is legally the parent of the child, as Arizona law does not allow domestic partners to adopt children together. If this is the case, the legal parent must appoint the other parent as the guardian. Otherwise, it is likely that the child would become a ward of the state, and could possibly be sent to live with other family members or in a foster family. However, partners should remember that naming each other as guardians of a child will not trump another legal parent’s right to the child, in the event that the child has a legal parent outside of the domestic partnership.
Powers of Attorney
A power of attorney is a legal document in which one person can appoint another to act on his/her behalf as an agent in the event that the principal becomes incapacitated. There are several different types of powers of attorney. A durable general power of attorney largely pertains to financial matters. The agent under a durable general power of attorney has the power to act for the principal to buy and sell property; to establish or use financial accounts; to access or establish safe deposit boxes; to sue on behalf of the principal; to collect monies owed to the principal; to make transactions on behalf of the principal through a brokerage firm; to employ advisors or consultants for the principal; to act on behalf of the principal with respect to any kind of insurance; to borrow funds; to do anything necessary to provide for the principal’s support at the principal’s ordinary standard of living; to act as the guardian or conservator of the principal; to create, fund, or terminate a trust, to make gifts; to reimburse the agent for out-of-pocket expenses; and to handle all tax matters. A durable general power of attorney therefore offers domestic partners some financial protections that they would otherwise not have.
Healthcare powers of attorney and mental health care powers of attorney also exists. A healthcare power of attorney authorizes the agent to make medical decisions on behalf of the principal when the principal is unable to make those decisions. This includes the power to consent or refuse treatment, review medical records, discuss treatment and prognosis with doctors, and admit or discharge the principal from a healthcare facility. These powers are very significant for co-habitating couples, as often the healthy partner would otherwise have no right even to see the incapacitated partner, much less make decisions for that partner, despite the fact that the healthy partner may often have the best knowledge as to the incapacitated person’s wishes.
A mental healthcare power of attorney conveys similar powers as a healthcare power of attorney, but it is tailored to situations where the principal is found to be incapable of making decisions on his/her behalf. The agent for this power of attorney has the authority to make mental health treatment decisions on behalf of the agent. Again, a domestic partner would not have any right to be involved in the treatment or care of a partner absent this document.
Trusts
A trust is a legal arrangement where the right to certain property is held by one person to benefit another person. The original owner of the property is called the settlor. The settlor places certain property in the care of a trustee, who is charged with administering that property for the benefit of the beneficiary. Title to the property passes from the settlor to the trustee, but the trustee has a fiduciary duty toward the beneficiary to administer the property for the benefit of the beneficiary and in accordance with the terms and limits imposed by the trust document. A trust may be created for any purpose that is not illegal or against public policy.
A trust is therefore an ideal mechanism for a settlor to provide for the support of a partner or for their children, as the trustee may only use the trust property for the purposes outlined in the trust and for the benefit of the beneficiary. Property may be conveyed into the trust at the time of formation of the trust, or at the time of death of the settlor if a "pour-over" clause is included in the settlor’s will that shifts property in the settlor’s estate to the settlor’s trust at the time of death. Thus, the trust is a legal mechanism that allows a domestic partner to opt out of the intestacy property system that would require the estate to be distributed amongst family members, and instead offer protection to partners.
