Question: Two years ago, after a 15 year marriage, my wife and I divorced and divided our assets. Because both of us worked and we had no children, I pay no on-going support. Since she moved with her employment, I received title to the house. Early last year, I met a divorced woman who had lost custody of her child and was employed in the real estate business. Within a few months, she moved in with me. Six months later, I learned that she was more than $45,000 behind in child support payments and installment loans. Because I wanted the relationship to work, I borrowed the money, put a second mortgage on my house, and paid off her debts. When the real estate market slowed, I began giving her money to make her monthly payments and child support. Then, a year after we met, she left. I have provided her more than $80,000, and I am now in serious financial difficulty with no means of recouping my money because she has nothing. Is there anything I can do, like write off these contributions as bad debts?

Answer: Probably not. Your situation points up just some of the problems that can arise when people enter into what they expect will be a long-term relationship. In our view, these situations call for a number of written cohabitation documents to take care of the "what if's."

While divorce, alimony, division of assets, inheritance, and health care decisions are all creatures of state laws which were written to serve traditional husband and wife relationships, these laws are not applicable to unmarried couples. For that reason, unmarried cohabitants have the unique opportunity to design and create their rights and obligations through written contracts which should be well-thought through, properly prepared, and tailored to the specific needs and intentions of the individuals who sign it.

In our view, if people choose to cohabit, a cohabitation agreement must be the cornerstone of the relationship. An agreement which is based upon sexual services is not legally enforceable; however, when it comes to dealing with the financial and property rights of this type of relationship, these agreements can be used to manage the on-going relationship, to dissolve your relationship if that becomes necessary, and to deal with the after-effects of the death of one or both of you.

If you bring suit against her and get a judgment, unless she acquires assets unexpectedly – which appears to be unlikely, the likelihood of enforcing a judgment against her is not good. But without notes or other evidence of debt, it is most likely that these payments will be considered to be gifts rather than loans. Since these payments exceed $10,000 per year, you are obligated to file gift tax returns by April 15th of the year after the payments were made, and your unified credit will be reduced.

You can chalk your losses up to experience, but others need not if they take the time to plan their futures. Because of space limitations, readers can find out more about cohabitation agreements by visiting www.flyingsolo.com and clicking on “columns.”

SoloFact: We have had a number of reader inquiries about mediation in the recent past. Mediation standards and licensing provisions for mediators, if they exist at all, differ from state to state. Generally speaking, a person who completes an approved training course can become a mediator. Today, there are training courses given throughout the United States on a regular basis. The Supreme Courts of some states are beginning to promulgate rules concerning licensing; however, progress in some areas is slow.

Although mediation styles vary from mediator to mediator, generally speaking, mediators caucus with the parties and, where appropriate, with the parties and their lawyers and sometimes with the lawyers. A mediator who takes affront to the fact that a person is represented by an attorney should not be a mediator. In addition to the custody and children's issues, financial and tax matters are most important and should not be finalized without the assistance of lawyers and, in some instances, accountants.