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Protecting the assets of unmarried couples

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."

Next: "Married couples have divorce court, rules and formulas."
Page | 1 | 2 | 3 | 4 |
Community property vs. common law
When it pays to stay single
Unmarried couples face special situations
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