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When You And Your Partner Or Spouse Part Company, What Happens To Your Horses And Horse Property?

Any time you involve someone else in your property, you should put into writing what will happen to that property if you part company with that person or persons. The best time to put it into writing is before the other person acquires an interest in the property or becomes involved with the property in any way. At that time, everyone is positive and generally on good terms. To wait until after relationships have soured is to assure everyone of disagreements which could lead you onto the frustrating and expensive road to court.

How could this relate to you? Consider the following scenarios:

Scenario I

You are single and own two mares and a yearling. You also own a hobby farm where you keep your mares. You get married and your new spouse helps to feed and care for the horses, does maintenance on the farm, and builds a shed for storing hay. Each mare now has a foal at her side. You separate and are contacted by his divorce attorney. The attorney claims that your spouse owns an interest in the yearling, the two foals, and the hobby farm.

Under Minnesota divorce laws, your spouse may have a legitimate claim. Although you can prove that you owned the hobby farm, the mares, and the yearling prior to marriage, your spouse may be able to claim that he has an ownership interest by virtue of his labor and resources which went into increasing the value of the property during the marriage. Although the foals were born from mares owned by you prior to the marriage, the care of the mares, the supplies and facilities for the mares were contributed to during the marriage. (and perhaps the breedings) Property bought with money earned during the marriage is considered marital property and each spouse has an interest in that property no matter whose salary paid for the property during the marriage.

How can you preserve that property for yourself? Prior to the marriage, you should enter into an antenuptial agreement (sometimes called a prenuptial agreement). This is a written agreement which spells out what property each of you own and what debts each of you owe prior to the marriage. The antenuptial goes on to state what would happen to that property and how that debt is accounted for if there is a divorce. (The antenuptial agreement can address other matters as well, but for purposes of this illustration, is limited to these property issues.)

The agreement is required to be procedurally correct and substantively fair in order to be enforceable. Also, it is important that you each use an attorney to finalize the agreement in order for the agreement to be enforceable at the time of the dissolution.

It is important that your attorney understands horse business as well as family law so that your needs are truly covered in the agreement. For example, you should spell out that each party recognizes that day-to-day feeding and care of the horses does not create a property interest in the animals and is part of living on a hobby farm, just as mowing the lawn and cleaning the house does not create a property interest in the property. You should also spell out if you are going to join forces and share in any increased values of the horses or the farm. Whatever your intentions are, they should be spelled out in the agreement so that when tempers run high, everyone's rights and responsibilities are clear.

Scenario II

Same scenario as above except, you have someone move in with you whom you do not marry.

Do they have rights to any of the property when they move out?

There is no common law marriage recognized in Minnesota, therefore they have no type of interest in the property which relates to their relationship with you. In fact, the law prohibits gaining a property interest solely based on "conjugal" relations. Any property interest would arise from contract law. There are several legal theories which range from oral contracts to unjust enrichment. Whether they succeed or not depends strongly upon the facts of each situation. The result, however is accumulation of attorney fees.

The safest bet is to put into a written agreement what the terms of the living arrangements and finances will be. Who pays what and what property interest does each party accumulate as a result of what they pay. Who gets what if there is a separation.

Scenario III

Imagine the following, you move into your boyfriend's home. He owns and operates a stable which has just undergone a financial setback with the loss of several boarders. You quit your job to help him train and sell horses and establish a riding program. The clientele grows, profits are used to build an addition to the house and the barn and paddocks are improved. While you are doing this work, he takes the income to pay the bills and make the improvements and you are given an amount for your personal expenses. Five years later, he establishes a relationship with one of the clients and tells you to move out.

What happens next? His lawyer argues that the amount given to you for your expenses was in addition to your room and board and ample compensation for your work. You were an employee who just happened to have a personal relationship with the boss. You have no property rights and are now unemployed. Your only alternative to try to obtain any property rights is to go through the expense and time consumption of court. You could argue such legal theories as oral contracts, unjust enrichment, or partnership law. In the meantime, you have to move and find other work. If you had a formal written agreement in your possession, you would have your property interests and could use the agreement to obtain enforcement of your rights while you move on with your life.

There are many other scenarios such as people entering into a joint financial arrangement when there is no personal relationship. Interrelationships between people and property may seem simple at the onset, but can become very complicated and emotionally, as well as financially devastating, when they fall apart. With a divorce rate of 50% for first time marriages and even higher for subsequent marriages, the likelihood of the relationship falling apart, whether it's between spouses or partners, is very high. Prior to focusing more on equine law, I spent a great deal of my practice in family law. Just when you think you have seen it all, a new set of facts comes up and another "unique" resolution is required. I now limit that area of my practice to those cases involving horses and farms. Because horses and property are so unique and cannot be replicated, the disputes over ownership become very intense. Although no none wants to spend money on attorneys and everyone would like to think that their relationship will last forever, putting everything in writing at the start of the relationship is a way to give each of you peace of mind and a substantial savings in attorney fees if you do part company.

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