Property Rights for Unmarried Couples
Some couples live long lives together without ever marrying. But should they break up, the law does not necessarily provide the same legal rights and protections to cohabiting couples as it does to married couples. The lack of property rights is often a primary issue when an unmarried couple splits.
While North Carolina law requires a divorcing couple to divide marital property and debts equally, there is no such requirement for couples who have lived together without marrying. Couples who are looking ahead might draft a cohabitation agreement. The agreement would outline how the couple would divide assets and debts if they were to split up. It could also address other topics of consequence, such as healthcare decisions and end-of-life issues.
A couple going through a breakup who cannot come to an agreement on property issues on their own may submit to mediation or arbitration with the help of trained third-party professionals. If the couple’s split is acrimonious, each individual should obtain an experienced family law attorney to represent them.
Charles R. Ullman & Associates provides compassionate and professional family law legal services, including protecting clients’ rights and interests as they go through separation and divorce. Attorney Charles Ullman is a board-certified family law specialist who focuses his practice exclusively on family law matters, including mediation, arbitration, and collaborative divorce.
If you and your partner are splitting up and are facing disagreements about the division of assets and debts, call Charles Ullman & Associates today or complete our online form to schedule a consultation. Our lawyers and legal staff serve clients throughout Raleigh, Cary, and surrounding areas in Wake County.
Establishing Property Rights as an Unmarried Couple
Regardless of how long you live together, North Carolina does not recognize unmarried cohabitation as a legal status. Couples whose relationship is like a marriage in all other respects are usually not entitled by law to equitable distribution of property, alimony, or similar legal accommodations if the relationship ends.
The best way to establish rights as a cohabiting, unmarried couple is to establish them by contractual agreement. Such cohabitation agreements are enforceable as long as the agreement is not based on sexual services and it is not egregiously unfair to one of the two parties.
A cohabitation agreement between a couple may be drafted to set out the rules that will govern their disposition of property, expenses, and debts if the relationship dissolves. It could address other issues, as well, such as one party providing the other party with financial support for a defined period if the parties wanted to make such an arrangement.
Such an agreement could be established or amended at any point in time as long as the parties were in agreement.
We would suggest modeling property rights clauses of a cohabitation agreement on North Carolina’s rules for equitable distribution of marital assets. Under this approach:
- Assets acquired after you first moved in together and before you split up would be divided equitably between you.
- Assets acquired before you lived together or that either of you received as a gift or inheritance while living together would be kept separate.
Because you are not married, you will not be legally responsible for each other’s debts unless you have a joint account or one of you acts as a cosigner for the other. Your cohabitation agreement could establish how you will deal with debt in a breakup.
In some breakups, you would need to sell certain assets and split the proceeds to ensure a fair division of marital property. You might agree to some give-and-take if there are marital assets that mean more to one party and should not be sold. The agreement could stipulate that one party would retain ownership of certain items in the case of a breakup.
There are numerous financial issues a cohabitation agreement might address. For example, retirement funds accumulated during a marriage are typically treated as marital property. How these assets are divided could have a long-lasting impact on either party’s financial well-being. Any discrepancies in income and payments over the years, such as one partner paying for the other’s higher education or paying most of a mortgage, could be addressed.
As your attorneys, we would work with you to develop an inventory of your current assets and debts and lead you through a point-by-point discussion of financial issues and options for drafting a cohabitation agreement.
Dividing a Couple’s Home in a Cohabitation Agreement
A house is often a couple’s biggest financial investment. A home also accrues sentimental value. Unfortunately, there is no way to split possession of a primary residence in a breakup evenly. Typically, the house must be sold. But how it will be sold may be part of a cohabitation agreement.
- Market sale. The easiest approach is to put the house on the market and split the proceeds evenly. But if your breakup occurs in a real estate market slump, you might benefit by waiting to sell. An agreement could provide some protection with a deadline for putting the house on the market, such as a certain number of weeks or months after an agreed-upon breakup date. An agreement would also have to address continued mortgage payments, upkeep, and occupancy.
- You may agree that one party may opt to buy the house from the other. You’ll need a method of valuation, such as a real estate agent’s appraisal, and how much time to allow for the full buyout payment. An agreement might require payment within 90 or 120 days of the appraisal, at which time the price becomes subject to any increase market changes suggest.
Determining the Division of Assets and Debts
With or without an existing cohabitation agreement, a Charles Ullman & Associates attorney can help you and your partner determine an equitable division of your assets and debts if you are breaking up. We would work with you to establish an:
- Inventory of all assets and debts belonging to both of you in common or each of you separately.
- Classification of each asset or debt as “in common” or “separate” property.
- Value for each in-common asset or debt. We would be preparing to help you divide only assets or debts held in common. An appraiser can be hired for this step.
- Equitable distribution, which means that it will be divided fairly, if not exactly evenly.
In an amicable split, in which you agree to how your assets will be divided, you can set out your agreement in a contract.
If you and your ex-partner disagree about the division of property, you will each need to hire your own attorney. A single attorney cannot ethically represent opposing parties.
If there are disagreements, you may benefit from the following:
- Mediation, in which a neutral third party facilitates discussions to help the parties come to an agreement. A mediator does not make decisions.
- Arbitration, in which the parties agree to have specific issues heard and decided by a neutral third party. The arbitrator hears information and arguments from both parties and/or their respective attorneys and then makes a decision. The parties are expected to abide by the arbiter’s decisions.
As your attorneys, we would focus on protecting your rights and interests while seeking to settle your division of property as efficiently as possible. We would hope to work collaboratively with your ex-partner and their attorney to resolve differences in a manner that serves the best interests of you and your ex-partner.
If your breakup is acrimonious, we will do all that is necessary to protect you financially. We would work with you to establish your ownership and rights to disputed property and be ready to file suit if necessary to ask the court to order that property or assets you own to be returned to you.
If you think your ex-partner has begun transferring, selling, hiding, or disposing of assets that you partly own, it is especially important for you to obtain legal representation as soon as possible.
Contact a Raleigh, NC, Equitable Property Division Lawyer
There are many complexities and few legal protections for the division of assets when an unmarried couple breaks up, even in an amicable split. To ensure that your financial interests are protected, it is important to work with experienced property division lawyers.
The attorneys of Charles R. Ullman & Associates have the skill, experience, and compassion necessary to help you. We urge you to contact us today and schedule a confidential review of your case.