4 Tips for Avoiding Palimony, and Keeping Your Assets Safe, in a Cohabitating Relationship

Many people avoid marriage out of the fear that the marriage will not last and they will lose all their money to lawyers and spousal support. With over half of all marriages ending in divorce, this is a valid concern.

However, what many people fail to realize, and are often shocked to find out, is that even without a marriage contract you may still have the same financial obligations to your partner in the event of a breakup. It’s called “palimony” – spousal support and property division, without a divorce.

Palimony, acknowledged by civil courts, may arise through a contract (implied or expressed) that you may have had with your partner, whether you knew about the contract or not. These obligations arise in same-sex relationships as well.

The following are 4 tips to avoid becoming an unassuming obligor to your partner in the event of a breakup:

Make sure you’re ready before you move in with your partner

While couples cohabitate for many different reasons, ranging from financial to convenience, be aware that cohabitation is the most important factor courts look at when deciding whether someone is obligated (including property division and spousal support) to their partner as a married couple would be – also known as “palimony.”

The landmark case on palimony is a California Supreme Court case involving actor Lee Marvin, and his relationship with a woman he never married. Among other things, the court in this case found that palimony requires showing a “stable” relationship arising out of cohabitation.

While the definition of “stable” in this sense, remains unclear, “full-time” cohabitation has been found to meet the definition. Examples of “full-time” cohabitation include both parties having identical primary addresses and both parties having things such as bills and other official documents mailed to the same address.

Since palimony obligations typically arise from the objective appearance of the parties’ behavior, partners should be careful with what they promise each other and be careful to not appear like a married couple.

Do not act like your married - if you’re not

While this tip may seem vague, it is easier to follow that it sounds.

It is important to be aware, that even though you may not “move in” with your partner, you may not be safe from spousal support and a division of your property. One court found that although the parties had never lived together “full-time,” a palimony obligation had been created, thus exposing the parties to spousal support and property division obligations.

In this case, the parties were found to have lived together two-to-four days a week in a long-term (over 17 years) relationship, and had held themselves out as husband and wife, raised a child together and jointly owned a home where they spent “family time.”

The court found it very important, in this case, that the parties had held themselves out to family and friends as a married couple.

The bottom line, if your friends and family think you are married, the courts might treat you as married, too.

Don’t co-mingle property and assets

While this may be along the same lines and #2, above, this is the advice most overlooked by unmarried couples who wish to have an unencumbered break up.

Joint bank accounts, buying houses together and making investments together are some of the biggest mistakes people make while not married, thinking that they will not be effected in the event of a break-up. While everyone can imagine that dividing a co-mingled bank account, or transferring ownership interest in a home, may not be the easiest thing in the event of a split, most people fail to realize that such actions can also expose both parties to palimony.  

After cohabitation, co-mingling property and assets is the second most important factor looked at by courts when determining if divorce remedies apply to a parties’ situation.

The easiest way to avoid running into this problem is to simply keep each other’s bank accounts and real estate holdings in each other’s name. In the event you do decide to get married, it is very simple to transmute such property to joint ownership interests.

Draft a “cohabitation” agreement

While this step may seem unnecessary, and even ridiculous, at the beginning of most non-marital relationships, it is important to understand that such an agreement can be drafted at any time during a relationship and still be deemed enforceable.

Also, such an agreement can be very simple to draft. If there are not may assets involved (or very standard assets such as cars, houses, bank accounts, etc.), an agreement can simply be handwritten explaining that the parties agree to keep each other’s assets their own in the event of a break up. Any future support to either party can also be waived in this agreement.

Contrarily, a “cohabitation” agreement can also be useful if the parties agree that one party will owe spousal support to the other party; or, if the parties wish to make an arrangement for dividing assets.

Either way, as long as the parties’ intents are clearly explained, a cohabitation agreement can be very easy to draft, and protect the parties from any surprises during a breakup.

The take away from all this should be that regardless of what type of relationship you are in, it is important to be aware of the obligations you may be committing to.  


Jeff Layfield, Attorney at Law
Los Angeles, CA
Layfieldlawfirm.com
(424) 248-7364