LGBT relationships run the gamut from simply living together (cohabitation) to marriage. Most couples form lasting unions, but there will be rifts in others that lead to a break-up, with the two individuals going their separate ways. Financial differences or problems are a common result of the failures, and disagreements can result in emotional crises, costly court cases, and judgments that neither party likes. A little careful planning can usually avoid most or all of the drama. Here are some of the things to consider:
Cohabitation
Many partners have been in long-term cohabitation relationships, because domestic partner registration or marriage weren’t available to them. For others, cohabiting is simply a casual, convenient and voluntary way to live together. They may not realize that there can be specific responsibilities the partners have under civil law. They may not be able to just walk away if they decide to separate.
Civil Court (as opposed to Family Court) handles disputes cohabiting partners might have over the terms of their relationship. Were promises made and not kept? A partner must prove a legal basis for a claim, such as an oral, written, express or implied contract. The Court will determine whether there was an enforceable contract, and if so, whether it has been breached by one or both of the parties. These lawsuits (popularly known as “palimony cases”) can be very expensive, take many years, and are difficult to win.
A Cohabitation Agreement is the best way to avoid financial disputes in the relationship. The partners identify their financial contributions to the relationship, and what they expect to take away from the relationship if they separate. If the partners don’t want a formal agreement (“It’s not romantic”; “We would never do anything to hurt each other”), then it is essential for each partner to maintain individual bank and investment accounts, not hold title to any assets in joint ownership, and not contribute any money toward the purchase of any asset (house, car, etc.) that is only in the name of the other partner. Never give up a job or other assets because a partner promises support, without a specific agreement in writing stating the promise and that the partner will not be left destitute if the relationship ends.
Marriage and Registered Domestic Partnerships (RDP’s)
In California, marriage and RDP’s are essentially identical. Under state law, spouses and registered partners have very clear and defined obligations to care for and support each other. They can’t just say goodbye and walk away if one of them has trouble with money, gets sick, or finds a new love-outside the union. If they want to end the union, they must file a petition for dissolution of marriage and/or RDP.
Family Court handles the dissolution process, and supervises all the steps that must be taken to ensure that the final judgment will be fair and equitable. The expense of dissolution and the emotional toll on spouses or partners is directly related to whether the couple can agree to an amicable split. Each must disclose detailed financial information to the other, including listing all assets and debts. If minor children are involved, there will be a comprehensive review of their current status and a determination will be made about the best plan for their future support and care. Pets, too, are often part of the picture, and their welfare must be carefully considered in a judgment. The dissolution process can take anywhere from a minimum of 6 months to a year or two, depending on how quickly the couple can reach agreement on all the terms.
Pre-marital or pre-RDP agreements are the best way to avoid future conflicts and disruption of personal lives when a marriage or RDP ends. Post-marital or post-RDP agreements may be created if the union has already taken place. Based on many of the dissolution cases we have handled, these agreements should be essential for any couple sincerely making a long-term commitment to each other. Couples can gain security or lose a fortune by choosing to enter or not to enter into such agreements.
Both Pre-marital/RDP and post-marital/RDP agreements must meet strict California legal requirements, including:
The agreement must be made voluntarily, and not under fraud, duress, or undue influence
Parties to the agreement must have legal capacity to enter into an agreement
The agreement may not be unconscionable
The agreement must not be against public policy
Full disclosure of each party’s assets, debts and financial details must be made
There must be independent legal counsel for each party, unless that right is
properly waived in a separate writing (in our practice, both sides are always represented by independent counsel)
Every relationship faces an uncertain future. Agreements are roadmaps that make each relationship stronger and more secure. They provide clear understanding of each person’s financial status and obligations, and are the foundation for a couple’s future, no matter what happens.