Property Rights of Unmarried Couples in Texas
Frequently asked questions to help unmarried couples in Texas determine who owns what
- My partner and I don't own much property. Do we need a written contract covering who owns what?
- My partner and I are buying a house. Do we need a written property agreement?
- My partner makes a lot more money than I do. Should our property agreements cover who is entitled to her income and the items we purchase with it?
- What is palimony? And should we make any agreements about it?
- Am I liable for the debts of my partner?
- If one of us dies, how much property will the survivor inherit?
My partner and I don't own much property. Do we need a written contract covering who owns what?
If you haven't been together long and don't own much, it's really not necessary. But the longer you live together, the more important it is to prepare a written contract making it clear who owns what -- especially if you begin to accumulate a lot of property. Otherwise, you might face a serious (and potentially expensive) battle if you split up and can't agree on how to divide what you've acquired. And when things are good, taking the time to draft a well-thought-out contract helps you clarify your intentions.
Another way to deal with owning property together is to use a joint purchase agreement for individual items as you buy them. See our Sample Agreement below.
In addition, we also offer do-it-yourself Living Together Agreements which contain instructions and forms necessary to create various types of agreements.
My partner and I are buying a house. Do we need a written property agreement?
It's particularly important to make a written property agreement if you buy a house together; the large financial and emotional commitments involved are good reasons to take extra care with your plans. Your contract should cover at least four major areas:
- How much of the house does each of you own? If it's not 50-50, is there a way for the person who owns less than half to increase his share -- for example, by fixing up the house or making a larger share of the mortgage payment?
- How is title (ownership) to be listed on the deed? One choice is as "joint tenants with rights of survivorship," meaning that when one of you dies, the other automatically inherits the whole house. Another option is "tenants in common," meaning that when one of you dies, that share of the house goes to whomever is named in a will or trust, or goes to blood relatives if the deceased partner left no estate plan.
- What happens to the house if you break up? Will one of you have the first right to stay in the house (perhaps to care for a young child) and buy the other out, or will the house be sold and the proceeds divided?
- If one of you has a buyout right, how will the house be appraised and how long will the buyout take?
My partner makes a lot more money than I do. Should our property agreements cover who is entitled to her income and the items we purchase with it?
Absolutely. Although each person starts out owning all of his or her job-related income, many states allow this to be changed by an oral contract or even by a contract implied from the circumstances of how you live. These types of contracts are ripe for misunderstanding. For example, absent a written agreement stating whether income will be shared or kept separate, one partner might falsely claim the other promised to split his income 50-50. Although this can be tough to prove in court, the very fact that a lawsuit can be brought creates a huge problem. For obvious reasons, it's an especially a good idea to make a written agreement if a person with a big income is living with and supporting someone with little or no income.
Example 1: Rose and Ted have lived together for four years. They've never had any written agreement, but their behavior has been consistent: they've purchased a car, an oak table and a china set, with each one paying half. If they split up, a court is likely to imply an agreement and equally divide the items purchased together.
Example 2: Jon and Steve plan to buy a fixer-upper house and move in together. Jon is a carpenter; Steve is a university professor who makes nearly twice as much as Jon. Jon and Steve plan to own their home equally, so they agree in writing as follows: Steve will pay two-thirds of the mortgage, and Jon will pay one-third. Steve and Jon will equally pay for the materials to fix up the house, and Jon will contribute all the labor. Steve and Jon also agree to equally own all the property, furniture and fixtures they buy once they move in together.
What is palimony? And should we make any agreements about it?
Palimony is a phrase coined by journalists -- not a legal concept -- to describe the division of property or alimony-like support paid to one partner in an unmarried couple by the other after a break-up. Members of unmarried couples are not legally entitled to such payments unless they have a written agreement (or a court finds there was an oral or implied agreement). A written agreement stating that you both will remain financially independent is the best defense against a cry for palimony.
Am I liable for the debts of my partner?
Not unless you have specifically undertaken responsibility to pay a particular debt -- for example, as a cosigner or if the debt is charged to a joint account. By contrast, husbands and wives are generally liable for all debts incurred during marriage, even those incurred by the other person. The one exception for unmarried couples applies if you have registered as domestic partners in a city where the domestic partner ordinance states that you agree to pay for each other's "basic living expenses" (food, shelter and clothing).
If one of us dies, how much property will the survivor inherit?
Nothing, unless the deceased partner made a will or used another estate planning device such as a living trust or joint tenancy agreement, or, if under the terms of a contract (such as a contract to purchase household furnishings together), the survivor already owns part of the property. This is unlike the legal situation married couples enjoy, where a surviving spouse automatically inherits a major portion of a deceased spouse's property. The bottom line is simple: to protect the person you live with, you must specifically leave her property using a will, living trust or other legal document.
Sample Texas Unmarried Couple Property Agreement
The following sample agreement may be used when you and your non-married partner (or friend) jointly buy personal property (as explained in Question 1 above).
Emiko Takahashi and Sam Armistead agree as follows:
1. That they'll jointly acquire and own a sound system, including a tuner, amplifier and compact disc player (called "the system"), for approximately $1,400;
2. That should they separate and both want the system, they'll agree on the fair current value of the system and then flip a coin, with the winner becoming sole owner of the system after paying the loser one-half of the agreed-upon price;
3. That if on separation neither person wants the system, or if they can't agree on a fair price, they shall advertise it to the public, sell it to the highest bidder and divide the money equally;
*4. That should either person die while they are living together, the system shall belong absolutely to the survivor. If either Emiko or Sam makes a will or other estate plan, this provision shall be reflected in that document;
5. That this agreement can be amended, but only in writing, and signed by both Sam and Emiko.
6. That if a court finds any portion of this contract to be illegal or otherwise unenforceable, the remainder of the contract is still in full force and effect.
Insert one of the following clauses:
For mediation**:
7. Any dispute arising out of this agreement shall be mediated by a third person mutually acceptable to both of us. The mediator's role shall be to help us arrive at a solution, not to impose one on us. If good faith efforts to arrive at our own solution with the help of a mediator prove to be fruitless, either of us may make a written request to the other that the dispute be arbitrated.
For arbitration***:
7. Our dispute will be submitted to arbitration under the rules of the American Arbitration Association. One arbitrator will hear our dispute. The decision of the arbitrator shall be binding on us and shall be enforceable in any court which has jurisdiction over the controversy.
| _________________ | _________________ |
| Date | Emiko Takahashi |
| _________________ | _________________ |
| Date | Sam Armistead |
*If Emiko and Sam don't want the survivor to own the entire stereo system, they should delete this clause. Then, when the first partner dies, the survivor and the deceased partner's estate would own the system in the same proportions as Emiko or Sam did before the death.
**If you both already agree on a mediator, consider naming that person in the contract. Of course, make sure he or she is willing to serve before you do this.
***You can choose to have your dispute heard by three mediators instead of one, but it will be more expensive.
