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| Best Practices: Family |
Unrecognized Unions
Jill Duman
03/01/2008
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Legal statutes specify the financial rights and
responsibilities of couples who are wed, which means "married people can’t pull
the same scams that unmarried people can," says Frederick Hertz, a lawyer in
Oakland, Calif., and a coauthor of Living Together: A Legal Guide for Unmarried Couples.
Hertz often sees unmarried couples apply for loans or credit
cards, with the intention of helping the partner with poor credit. When love
fades, though, the cosigner alone will owe any remaining debt. Similarly, shared
business, property or vehicle ownership requires paperwork specifying that
ownership. "What’s on paper should match what’s in your heart," Hertz points
out.
Jill Duman is a freelance writer based in Davis,
Calif.
Contracts lack romance, but they
can protect both parties. Prudent unmarried partners should specify everything,
including inheritance, property ownership, retirement benefits and rights to
earned income.
• Seek separate legal representation for each partner.
• Decide who owns which property or assets.
• Establish terms for providing for a partner after a breakup.
• Draft estate plans and decide how assets will be
divided among a partner and family members.
• Consider making a partner the beneficiary of a life
insurance policy or retirement benefits.
• Choose joint or separate banking accounts carefully. Joint
accounts may, in some states, create an implied contract to share assets.
• Exclude the details of sexual relationships from written agreements, or risk negating those contracts.
Couples in common-law states must take
precautions to avoid unintentionally creating such unions.
"If you are a different-sex couple in Texas, you live together, and you consider yourself married, or you
represent to other people that you are married—if you do all those things, you
are common-law married," explains Michael Kaufman, a partner in the Dallas-based
offices of Jackson Walker. "If you say you are not in an informal marriage, and
then you take this person home and say, ‘Hello everyone, this is my wife,’ that
is not going to help."
Legal disputes sometimes arise after relationships end and one
party claims rights to money or property. Attorney Marvin Mitchelson won a
landmark palimony case in California in 1979 for his client Michelle Triola
Marvin, the live-in lover of actor Lee Marvin. Although Triola Marvin’s claim
was ultimately denied, the case established a precedent for looking at whether
an implied contract might exist between cohabiting partners that could affect
the distribution of assets or property acquired during the relationship.
Palimony cases may occur infrequently, but when they arise,
they pose a huge burden. Defendants will endure high legal fees, court costs and
possibly bad publicity, while plaintiffs risk losing everything, says Jared
Laskin, a palimony expert in Orange, Calif., who represents both plaintiffs and
defendants in lawsuits that surface when cohabitation agreements sour. "I tell
my clients to look at it like a salvage operation," Laskin says. "They’re going
to salvage what they can."
Proceed with care in these common-law jurisdictions:
Alabama
Colorado
Iowa
Kansas
Montana
New Hampshire*
Oklahoma
Rhode Island
South Carolina
Texas
Utah
Washington, D.C.
* For inheritance purposes only
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