RIGHTS OF NEVER-MARRIED COUPLES AND SAME-SEX COUPLES

By Marta Papa

Recently, headlines across the country have been reading, “Same-Sex Marriage Now Legal in Iowa and Vermont!” But, what does that mean for the gay and lesbian community in other states? The answer, unfortunately, is: not much. Since Iowa, Vermont and Massachusetts are the only states that have legalized same-sex marriages so far, the rights extended by statute to married couples are only applicable to couples living in those states. Simply stated, you could plan a romantic vacation to Vermont and tie the knot while you are there, however, all of the rights and responsibilities legally inherent to the marriage will not cross the border with you as you return to your home state. When you do return home, you are simply an unmarried couple living together and at risk in the event that something happens to you or your partner or the relationship ends.

For example, in states that do not recognize same-sex marriage, you will not be able to:

File joint tax returns;
Visit your partner in the ICU of a hospital;
Make any medical decisions concerning your partner;
Presume that property purchased together is “jointly” owned;
Automatically inherit property from your partner;
Be covered on your partner’s health plan;
Sue for wrongful death or loss of consortium should something happen to your partner;
Transfer property to your partner without invoking Gift or Estate Taxes;
Collect survivor benefits from your partner;
Prevent your partner’s family from taking you and your partner’s “joint” assets;
Make final arrangements for your partner.

So, what’s all the excitement about? Since the Iowa State Supreme Court held that it is illegal to discriminate on the basis of sexual orientation, many other state Supreme Courts are expected to follow the same logic. Other state Supreme Courts now have some type of precedence to support a similar decision. Unfortunately, this process will take many years and leaves unmarried couples who are living together and accumulating assets together at risk in the meantime.

What can my partner and I do to protect ourselves? The answer is: Plenty. Even if a statute fails to grant you a specific right, such as right of survivorship, you can work around the system and enter into a written agreement with your partner granting many of these rights using contract law.

In a “Partnership Agreement”, you can each set out in writing what rights and responsibilities you would like to grant to each other. In this way you can protect yourself from unscrupulous family members or the state swooping in and taking property that you intended your partner to have in the event that something happens to you. Most people are unaware of just how unprotected they are in these situations. It is true that some rights are not governed by contract, however, you and your partner can create a fairly comprehensive plan about how you are going to live together and ensure that your wishes are carried out should something happen to you or the relationship ends.

How do we obtain a Partnership Agreement? The best and most economical way to design such an agreement is to use a mediator. Since the mediator is neutral and is not an attorney representing either party, the mediator can meet with both parties together and address sensitive issues which are often difficult for a couple to discuss alone. The mediator is also trained in helping to explore options the parties may not have thought of on their own. The mediator then drafts a document entailing all of the couples’ decisions. This is what is known as a “Partnership Agreement”.

What about a heterosexual couple living together without the benefit of marriage? They are in exactly the same position. Without a Dissolution of Marriage Statute to govern the division of their property, the couple is left to fight it out with each other or take each other to court. Most states have a concept known as “the Source of Funds Rule”. In a nutshell this rule provides that whoever provided the money for the asset and has the receipt, proof of purchase or proof of payment is awarded the asset. If an unmarried couple’s relationship ends and the parties land in court dueling over assets, the Judge would most likely apply this rule. This method of dividing property can render very unfair and devastating results. For example, consider an unmarried couple in which one person works and the other person stays at home to care for the children. If this relationship dissolves, the court could give every asset to the wage earner because he or she was the source of the funds that bought the asset. The other person would get nothing.

Does the ‘Source of Funds Rule’ apply to same-sex relationships? Yes. I recently mediated with a couple who had been together for fifteen years. Party A (let’s call him John) was the primary wage earner. Since John earned a large salary, had a very steady work record and a great credit rating, the couple used John’s name to buy their house, car and all of the assets they acquired during their fifteen year relationship. Now, Party B (let’s call him Bob) was an excellent carpenter. John and Bob decided to rehab their Victorian home, which was titled only in John’s name. Their agreement was that John would provide the money for the materials needed and Bob would do the actual labor of rehabbing the house. Bob’s labor was provided for free because, in their minds, they owned the property together. When John decided he no longer wanted to stay in the relationship, Bob was devastated to learn that John would get the home, the car, the furniture…….everything. John provided the source of funds that purchased all of those assets. Bob’s efforts were not recognized or given any value. Consequently, Bob would be left homeless and penniless. Fortunately, this couple sought mediation to help them agree upon a plan that recognized both parties’ contributions in the relationship. John and Bob walked out of mediation with a plan for dividing their assets in a way each felt was fair and appropriate. Again, had John and Bob mediated a Partnership Agreement at the beginning of their relationship, they would have had a plan for distributing their assets and Bob would not have been in such a vulnerable position when the relationship ended.

Does everyone need such an “Agreement”? Yes. If you think about it, EVERY relationship eventually ends…either by death or by the choice of one (or both) of the parties. The question is not whether you will one day be apart….you will. The real question is: When we no longer live together, what is going to happen to our home, property, investments, pets, vehicles, etc? Accordingly, some type of an agreement is essential for every unmarried couple, regardless of sexual orientation, in order to protect themselves, their loved ones and their property. If a statute does not provide for this, then it makes good sense to draft an agreement that addresses these issues should the need arise. Such agreements are generally easy to prepare and, in the end, will give the couple the peace of mind of knowing that their affairs are in order, their wishes are respected and their future is protected.

Marta Papa is an attorney and mediator, you may visit her web site at www.consideringdivorce.com or call (314) 862-0202.

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