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A romantic relationship does not benefit from the
same laws and regulations that protect married couples. Witness
the condo dispute between Jennifer Aniston and Vince Vaughn in the
newly released movie "The Break-up" -- both love the jointly
owned condo, and neither one wants to leave.
Some 5.5 million unmarried couples dwell together,
representing slightly more than 10 percent of all households. Married
or not, couples are purchasing real estate and businesses together.
And since it can be easier to get a divorce in this country than
to resolve a property or business dispute, unmarried couples would
be well-advised to sit down and circumspectly discuss all contingencies
before making any big purchases.
It may not be the makings of a romantic comedy, but
it could save a lot of tears later on.
"Talk now about how you are going to resolve
disputes that may come up later," says Brent Rosenthal, a business
and real estate attorney and partner at Buckingham Doolittle &
Burroughs LLP in Columbus, Ohio. Rosenthal says that it's hard to
get people to focus on this because they come in with stars in their
eyes, thinking they will be together forever. He asks his clients
to consider what they want to happen to each person's interests
if the relationship ends or one party of the couple passes away.
"Treat it like a business arrangement, and enter
into a written agreement that describes what will happen,"
he says. "Go under the assumption that people don't last forever."
There are benefits to hiring an uninvolved third party,
such as a lawyer, to guide you through a property or business agreement,
says Rosenthal. "I have no emotional stake in this at all,
so I can sit back and look at it totally disassociated from the
deal," he says.
Why do unmarried couples jump into purchasing a home
or business together without doing preliminary homework? "Nothing
gets taken care of when people are in love. It only gets taken care
of when people are breaking apart," says Stacy D. Phillips,
a founding partner of Phillips, Lerner, Lauzon & Jamra LLP,
a family law firm in Los Angeles, and the author of "Divorce:
It's All About Control: How To Win the Emotional, Psychological
and Legal Wars."
"People don't want to deal with it," she
says. "And sometimes, frankly, the person who wants to deal
with it is the person who will be left out."
Protect your assets
"I think that most people who are part of an unmarried couple
assume that the law is going to look at them in some special status,
or a different status, and that's just not really true," says
Beverly Pekala, principal of her own firm in Chicago. "Each
state regulates (these situations) quite differently."
There is no asset protection during a breakup for
unmarried couples who reside in one of the few states that recognize
common-law marriages. The laws protect only legally married couples.
"The way we refer to it is community property
law versus marital property law," says Pakala. "The divorce
laws have all been codified by statute, so what started off 200
years ago as old English common law, which came over from England,
has now been codified. In each of the 50 states, you have a statute
regarding divorce, which the legislature of each state wrote, and
it's either based in community property or it's based in marital
property."
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