Property Settlement Agreements for Unmarried Same-Sex Couples

There are a variety of reasons why committed same-sex couples choose not to enter into marriage or civil union.  Aside from living in a state that does not recognize same-sex marriage or civil union, there are other issues that couples must consider.  Among these are the desire to adopt a non-biological child, eligibility for state and federal entitlements, military affiliation and the like.  Quite honestly, marriage is not for everyone and not every couple should walk down the proverbial aisle.

Before gay marriage became a legal reality in Connecticut and other states, same-sex couples lived together in committed relationships that involved joint ownership of real estate, automobiles, recreational vehicles and other such assets.  Those same couples often shared joint bank accounts and other investment vehicles.

In the days since gay marriage arrived, those couples who have chosen not to avail themselves of the right to marry are still living in committed relationships and they still share joint ownership of those same assets.

The unhappy reality of relationships is that not all of them succeed.  Just as married couples often find themselves seeking divorces, unmarried couples may also find themselves dissolving their relationships.  In a divorce situation, the joint assets are divided as part of the divorce decree.  Couples may agree upon the division or a judge may make that determination if no agreement can be reached.

For unmarried couples seeking to dissolve their relationships, those same assets must still be divided.  Unfortunately, when relationships end and emotions rise to new heights, agreements are not always easy to reach.  For that reason, if you and your partner choose not to marry, you should consider having a Property Settlement Agreement drafted.  Such a document is much like a prenuptial or postnuptial agreement.  It creates a contractual obligation that determines which party will receive which assets upon the dissolution of the relationship.

Let’s say that you and your partner jointly purchased a home which you lived in together for 10 years.  You funded the $30,000 down payment on the home with money you inherited from your parents when they died.  Over the last 10 years, your partner has contributed an equal amount of money toward your shared living expenses, including utilities, mortgage  and property insurance.  If you separate, you both understand that you are each entitled to a 50% share of that home.  You also agree that if the house is sold, you should be reimbursed the first $30,000 that you initially provided for the down payment.  That particular provision should be memorialized in your Property Settlement Agreement.

In an alternative hypothetical, let’s assume that you put down the same $30,000 deposit on the home and over the last 10 years, you paid 80% of the mortgage payments while your partner was only able to contribute 20% of the mortgage and 20% of the shared living expenses.  Your agreement might state that if the relationship ends, you have first right of refusal to purchase your partner’s interest in that home for 20% of fair market value minus the $30,000 deposit you initially paid.  Alternatively, your agreement might state that if the property is sold outright, you are entitled to the first $30,000 of the proceeds plus 80% of the remaining proceeds of the sale.

Your agreement might determine which of you will assume custody and control of your pets if the relationship terminates.  It might also delineate which pieces of art or collectibles will belong to whom upon your separation.  The agreement might outline the division of monies in your joint bank accounts.  It might state that if you separate, gifts given to both of you by your family become your sole property.  There are a host of other items and issues that may be addressed in such agreements.

Some couples believe that they will never require such agreements because they either will not split up or if they do, they will be rational when dividing their joint assets. Some couples do stay together until death do they part and some couples who split up are able to be rational when dividing their assets.  I am here to tell you, however, that happy endings — or happy breakups — are not always possible.

It’s far less expensive to execute a Property Settlement Agreement as a “just in case” proactive action rather than be forced to litigate such issues in court.  There are plenty of horror stories about the latter.  In any case, you should discuss your personal situation with your attorney.  It pays to be informed.

For a brief overview of Property Settlement Agreements, download my complimentary brochure here.


Disclaimer: The information, comments and links posted on the blog do not constitute legal advice. I will not respond to any specific legal questions in the comments section of this blog. Read my entire disclaimer.

copyright 2011 Irene C. Olszewski

2 comments on “Property Settlement Agreements for Unmarried Same-Sex Couples

  1. Betina says:

    Friends of ours split up last year. They were not married. They ended up in court fighting about everything they ever owned together. It was a mess. I wish they had taken the time to talk to a lawyer about one of those property settlement agreements. I bet they would have saved a lot of time, money and anxiety.

    • Irene C. Olszewski, Esq. says:

      I can’t stress enough that people should always consider what might happen in the event of a break-up. It makes sense to consult a lawyer and find out what might be at stake. It’s better to plan ahead than have to battle it out later.

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