Domestic Partnership Agreements Make Good Sense for Unmarried Couples Who Live Together

    CENSUS STATISTICS SHOW that marriage is on the decline. The numbers of unmarried couples living together and setting up households is increasing. How do these couples protect themselves legally in the event they eventually go their respective ways?

Marriage laws do not apply to unmarried co-habiting couples. For example, Minnesota is an equitable property state. This means that divorcing couples have to divide all assets and debt equitably. Both partners have legal rights that may be enforced to protect them financially.

On the other hand, unmarried co-habiting partners have no such legal rights to financial protection absent some sort of written agreement. The only remedy for unmarried co-habiting partners is conciliation court or an action to partition (break-up) the joint tenancy of a home. Palimony cases are the stuff of celebrity trysts and not supported by case law in most states.

What does it mean not to have certain financial legal rights as an unmarried partner?

▪ The person whose name the debt is in is ultimately responsible for the debt even if both parties incurred the debt.

▪ The person whose name is on the lease, rental agreement or on title to the homestead is the party with the legal right to the benefits of the document. This is true even if the other partner is paying the rent or paying the mortgage. The person on the lease, rental agreement or title on the homestead may evict the other partner.

▪ The person who retains the personal property after the break-up has a right to keep it – in this case possession is 9/10th of the law. This situation is usually a case of one party trying to prove that he or she is the owner of what the other retaining party has in his or her possession.

▪ Proving ownership to untitled property is always difficult. Proving ownership when parties live together a long time is even tougher. Often individuals who bring personal property to the relationship cannot prove he or she owns the property.

There are some benefits to co-habiting.

One of the upsides of unmarried co-habiting is that neither party has to share his or her retirement income or separate financial accounts with the other party on breaking up. Neither partner is responsible for the other partner’s personal tax liability. Neither partner is responsible for the other partner’s debts or bills if held individually by that partner.

Domestic Partnership Agreements may be the wave of the future.

Domestic Partnership Agreements are documents that set out the financial obligations of both parties to the relationship. The Agreement can specify who owns what and how it is paid for by the parties. The debt can be spelled out. If the couple owns a home, then the Agreement can provide a buy-sell first option provision or a way for one party to pay off the other party’s equity. Any topic that could become an area of dispute can become an agreed upon provision in a Domestic Partnership Agreement. The idea of the Agreement is to preserve the legal rights of both parties to the unmarried partnership in the event of a break-up. The Agreement is a contract between two persons and as such is legally enforceable.

I recently drafted an Agreement where one party stayed at home and took care of the house and the couple’s entire social and financial obligations. This couple had a very traditional partnership. The working partner had a difficult, stressful and time consuming profession that required him to be professionally committed. The couple had me draft a provision where the working partner would pay the stay-at-home partner a monthly stipend until she could become financially stable in the event they separated. They also had provisions dividing assets, personal property and debt.

In another interesting case, the couple purchased a home together. She made more income than he did and was able to pay more on the mortgage. We worked out a percentage of ownership based upon what they both were able to contribute even though the home was held in joint tenancy. The percentage of ownership was applicable only for break-up purposes and the first option to buy–out the other’s interest.

Domestic Partnership Agreements can be tailored to meet the unique needs of the each couple. The only universally prohibited contract provision is one in which one partner supports another for the sole purpose of intimate relations. In other words, a couple cannot legally contract for sexual services. A contract or Agreement has to be supported by some exchange between the parties other than the sexual relationship.

About Kate Willmore, Esq.

Kate Willmore, Saint Cloud, Minnesota, divorce, custody and family attorney brings over 25 years experience to every client's legal matter. *** Licensed in Minnesota and in California

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