If an unmarried couple split up after living together for many years, do both parties to the relationship have community property rights to all of the assets each party holds?
In the late 1990s, the State Court of Appeals in Washington considered this question.
In Lindemann v. Lindemann, the court found that Kimi Lindemann (partner to David Lindemann) had a right to half of all of the assets, including the business, which David held. In many ways, this distribution of assets in this case was like community property rights in a marriage. However, the parties to the relationship in question were not actually married.
Summary of Facts
The unmarried couple, Kimi and David, actually had been married in 1978. However, they had divorced in 1982.
In 1982, David started an auto repair business out of his garage. When once things were financially difficult, things eventually got better as a result of the business. He and his ex-wife began living together again in 1985. However, they did not re-marry.
They stayed together for another 10 years, raised their two children, and acted like a married couple with their friends and relatives.
Kimi also worked, while David continued operating his auto body business.
In 1995, they split up again. Kimi filed a petition with the court asking that the court divide their property and liabilities in the same way as if they were married. David pointed out that they were unmarried, the business was in his name, and that Kimi had never worked for his auto body shop. He said that she had no right to any part of the business, and that her petition should be dismissed.
Trial Court Award of One-Half of Business
The couple could not come to any kind of agreement, so the case was assigned to a judge for trial. Snohomish County Superior Court Judge Kathryn Ross ruled that Kimi should be awarded one-half of the value of the business, or $109,362.75. The trial court placed a lien on the business of $109,362.75 and gave David eight years to pay it off.
Washington Appellate Court Agreed
David appealed to the Washington State Court of Appeals. The Court of Appeals noted that the State Supreme Court had already held that when a couple separate after living in a stable relationship, property accumulated by the couple should be treated like community property. The Supreme Court reasoned that unmarried partners, regardless of gender, often give the same sacrifice and labor of married partners, also regardless of gender. Unless the courts apply community property rules to these relationships, an unmarried partner who helps their partner succeed in the course of their relationship can end up without any financial reward for their contributions.
There still is a difference in the way that the courts will treat married and unmarried couples. When a marriage breaks up, the court has the power to make a fair division of all property, both separate property and community. When an unmarried couple breaks up, however, the current rule is that the court has jurisdiction only over property that the cohabitating couple acquired during their relationship. The separate property of the parties to the relationship cannot be considered by the court for equal distribution.
In the Court of Appeals case that was mentioned above, David started his auto body repair shop after his marriage ended, but before the couple began living together again. The court decided that the value of the auto body shop prior to their living together should not be divided by the court. However, the court stated that it should equally divide up the increased value of the business.
After hearing all of the evidence at the trial, the judge decided that when the couple moved in together in 1985, the auto body business was worth only about $10,000.00. David had only his clothes and a motorcycle, and the auto body business was still basically on a start-up basis. He could not afford tools for his shop, owed back taxes, and had a very small amount of money in his checking account.
Living Together Allowed the Business to Prosper
The auto body business actually did not start to prosper until 1991, when David overcame drug addiction and became more effective and productive. From that time until the couple separated for the second time in 1995, he put in about 65 hours of work per week.
During the 10 years that David lived together with Kimi, his auto body business grew and was fairly lucrative. At the time the couple separated, it was worth $218,725.51.
The Court of Appeals stated that David's ability to overcome his drug problem and concentrate on his business was directly related to the fact that he had a home and the support of Kimi. In other words, if David had not had the stable home that he and Kimi shared as a result of her contributions to the household, he couldn't have put in all those hours at work, and his business would never have prospered.
The kinds of contributions a party to such a relationship makes are not always relevant. Whether they are financial contributions or contributions that are more directly related to homemaking (such as housekeeping or home improvement) is not always of significant consequence. In the case of David and Kimi, the court recognized that they had contributed equally to the increased value of the business, although their respective relationships to the business were very different and involved very different kinds of contributions. As a result, the value of the business was divided equally.
Under Washington law, the auto body business was separate property and not subject to division because of the quasi-marital relationship. However, the increase of that business was attributable to the community labor of both partners and that increase could be divided. The court had reasoned that the couple had a marital-like relationship. Even when a couple are not married, they both can contribute to the value of assets they each hold. In that way, when such a couple separate, their property can be divided as if they were married.
If you're in such a situation, it can be confusing to know what you're entitled to in a breakup. It can be particularly confusing, given the widespread false notions about how property can only be divided according to an equal arrangement only if parties to a relationship have been married. If you're in such a situation, consider contacting a qualified family law attorney near you. They can assist you in determining what you're entitled to under these circumstances. At the same time, they can help you navigate any legal process you may encounter during the split-up.