Family Law/Jan 14, 2015

4 Things Every Unmarried Couple Living Together Should Know: Your Assets May Not Be Protected

A recent unpublished Court of Appeals opinion serves as a cautionary tale for cohabitating couples: mere commitment to a long-term relationship will not provide asset protection when the relationship ends. Breininger v Huntley, unpublished opinion per curiam of the Court of Appeals, issued November 20, 2014 (Docket No. 317899).

In Breininger, although the plaintiff and defendant were involved in a 13-year relationship and together parented a child, the two never married. For much of the relationship the couple lived together in a mobile home owned by the plaintiff. At some point, however, the defendant, using funds borrowed from his mother, purchased property that he titled exclusively in his name. The defendant subsequently obtained a construction loan to build a house on the property. Both plaintiff and defendant, in addition to other family members and friends, contributed to the building of the house. Once the house was completed, plaintiff and defendant lived there together for two years until their relationship ended. At all times during their relationship, the defendant was the sole titleholder of the property, as well as the only named mortgagor.

Believing she was entitled to one-half of the home’s value, plaintiff brought suit against the defendant based on several theories including express contract, implied contract/promissory estoppel, quantum meruit, unjust enrichment and joint enterprise/joint venture. Finding that the plaintiff and defendant were involved in a meretricious relationship (i.e., a marriage-like relationship in which the parties cohabitate without being legally married), the trial court debunked each of plaintiff’s claims and offered these words of wisdom: “[I]f you want the benefits of divorce, you have to live with the burdens of a marriage.” Apparently agreeing with the wisdom expressed by the trial court, the Court of Appeals upheld the lower court’s decision.

Those who choose to live together in committed relationships without the benefit (and burden) of marriage should understand these four basic principles of Michigan law:

  1. Michigan abolished common law marriage in 1957, meaning that, for any unmarried couple that entered into a relationship within the last 58 years, there is no legal presumption that one partner holds an interest in property owned by the other partner, whether that property was acquired before or during the relationship.
  2. Services rendered (such as helping to build a house) during a meretricious relationship are presumably gratuitous.
  3. Contracts made in consideration of a meretricious relationship are not enforceable.
  4. For an agreement regarding money or property to be enforceable between parties in a meretricious relationship, it must be entirely independent of the relationship. In other words, there must be an express intent between the parties that compensation is expected for services rendered or that property is to be held jointly.

Unmarried, cohabitating couples may actually wish they were going through a divorce when things fall apart in the relationship and they have no contracts or other legal measures to enforce. Unlike a failed marriage, there is no “built-in” asset protection for the involved parties. Those involved in such relationships should seek legal advice to ensure that their property is protected in the event of a breakup.

 

 

News and blog articles presented in this website are distributed for general information purposes only with the understanding that the author, publisher and distributor of articles is not rendering legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, GGTM assumes no liability whatsoever in connection with the use of any article. Pursuant to applicable rules of professional conduct, this communication may constitute Attorney Advertising.