What is a Palimony Agreement?
Palimony agreements are contracts that determine the division of property, assets, real estate, or financial support following the end of a relationship. Many people are surprised to find their separation agreement is called a palimony agreement, as the term is more commonly applied to a court proceeding when one person seeks a share of their partner’s wealth following the end of their relationship. However, the term is frequently used to describe the separation agreement that precedes litigation. Palimony agreements are generally defined as an agreement between two single individuals in a cohabitation agreement regarding financial issues, such as property and assets.
The term palimony was first coined in the early 1970s in California, when a woman sought financial support from her partner following their separation. She was not married to the man, but raised their children and kept house, as well as worked in his law office. When their relationship ended, she sought financial support, similar to the alimony that she would have been entitled to had they been legally married. The case attracted media attention and the term palimony was born , creating a heightened awareness of the demands for support by unmarried partners in relationships.
Palimony Agreements simply denote a contract between two individuals in a cohabiting relationship, rather than the legal action that follows should the issue proceed to litigation. For many, any demand made to an ex-partner is done with the hope that the relationship is over and demand for support will never be called upon, however, should the need arise, dividing property, assets, accounts and financial support are all common issues that may need to be addressed by the court.
Palimony agreements differ from palimony litigation in that they are simply contracts made between two single persons, rather than a divorce proceeding similar to alimony. An alimony award is made by the court at the dissolution or separation of a marriage and is always based on a judge’s decision after determining the amount but, more commonly, palimony agreements between members of a cohabiting couple can be decided and agreed upon without the need for litigation or court action regarding the relationship. Palimony agreements in court are often used where one partner in a relationship has a higher or substantial earning power and seeks some form of compensatory award for their investments in the relationship.
History and Development of Palimony
In the early 1970s, the term "palimony" was coined to describe the spousal-like support provided to a cohabiting partner in a relationship where the couple were not legally married. The dynamics of such couples were somewhat shrouded in mystery at the time. For example, it was generally assumed that a woman who had a lifelong live-in partner (she and her partner never married) would be taken care of; when the relationship ended, that man would take care of her and would be legally obligated to do so because they had been a long-term couple. However, this was not so clear to the courts.
In 1975, a widely publicized case shot the issue of cohabitating couples into the national limelight: the case of Marvin v. Marvin. The case involved Barbara Charline Marvin, who had a house before beginning a relationship with Lee Marvin, a noted actor who had "dropped out of Hollywood’s powerful social scene and was living a modest life in the then economically depressed community of Huggerston, California."
Marvin moved into Charline’s home, and together they "embarked on a loving, personal venture," living as a married couple for approximately four years. During that time, they renovated her home and conceived of and acted on "some economic and personal partnership agreements" that revolved around design and development of a seaside property. However, the relationship soured — and as happens in "conventional" marriages, the two parted ways.
After the breakup, Lee Marvin refused to support Charline, but she sought support anyway, based on two agreements they had made during their relationship: verbal pledges to be respectful eventually devolved into an agreement that if the relationship didn’t work out, he would take care of her financially, as though they had been married. She alleged that he had breached his promise and sued him for palimony.
Ultimately, the court ruled in Charline’s favor, with a landmark opinion written by Chief Justice Rose Elizabeth Bird: "Contracting is a nexus between individuals bodies and will, an assemblage of mutual and independent consent, which arises in a circumstance of agreement. Such an agreement cannot be deemed a marriage, regardless of the duration of the relationship, and is an expression of free will."
Unfortunately for the couple, their financial misadventures as a result of their agreement resulted in a $250,000 judgment against them, which he refused to pay. He appealed, and lost.
Whether or not people are able to walk away from a relationship without signing any contract, the reality remains that the relationship may have an economic cost to both individuals involved, depending on the circumstances of their cohabitation, so the possibility of both partners "paying" for the marriage should be at the forefront of any conversation about moving in together.
Although more states have come to recognize the importance of palimony agreements for couples, they often hesitate to award a partner anything who "merely lived in a relationship that resembled marriage." However, the courts are becoming more aware that many couples see these relationships as marriage itself, even if they never signed a paper that says as much; they shuffle their last names together (for example, Johnson-Miller), call one another Mr. and Mrs., and have children together.
Essential Features of a Palimony Agreement
Like a prenuptial agreement for legally unrecognized relationships, a palimony agreement is a contract drawn up with the intent to protect the contractual rights of both parties in the event that the relationship ends or one partner becomes incapable of providing future support. While no two agreements are exactly the same, the typical components of a palimony agreement are financial support, property rights, and conditions for any restrictions, such as a time limit. In the case of financial support, common elements may include: Property rights can also be covered in palimony agreements, including: Depending on the laws of the state the parties occupy, there may also be conditions or limitations attached to the agreement. A common clause is putting a time limit or expiration date on the agreement. For example, the agreement may only apply if the parties have cohabitated for a specified number of years. A palimony agreement is legally binding when it meets the criteria of a written contract, which typically includes elements such as: As long as the terms of the agreement do not violate statutes pertaining to public policy (such as alimony laws), courts will enforce palimony agreements that meet the basic requirements of a valid contract.
How to Draft a Palimony Agreement
When drafting a palimony agreement, the first step is to identify the practical concerns that must be addressed. A manual guide to drafting an effective palimony agreement has been developed. It includes the following "how to" steps: 1. Identify the assets constituting the independence wealth of each party and then value that wealth; 2. Determine the property that each party will take out of the relationship as well as the property that will remain within the relationship; 3. Devise a formula that delineates each party’s interest in, or entitlement to, the property that is remaining in the relationship; and 4. Provide an appropriate safety net in the event the relationship is terminated outside of the agreement. Once the goals have been established, the next step is to address the legal requirements that must be met to make the palimony agreement enforceable. In order for a palimony agreement to be valid and enforceable, it must satisfy the Statute of Frauds (N.J.S.A. 25:1-5) and be supported by consideration (N.J.S.A. 25:1-5.2). Lastly, and most importantly, the concept of palimony continues to be in a state of evolution, so obtaining experienced legal advice upon drafting a palimony agreement is a must. Such advice will provide a thorough understanding of the current law while also avoiding some oftentimes common mistakes when drafting a palimony agreement.
Legal Strength and Challenges
Cohabitation, relationship duration, and intent are some of the factors play significant roles in determining the enforceability of a palimony agreement. These may include whether or not the parties had a written document outlining the palimony agreement in detail, how long the parties lived as domestic partners, whether or not it was clear to both parties that (a) there was intent as domestic partners, (b) there was intent to give up the right to claim alimony, and (c) support is offered for palimony.
For example, if a couple resides in a state where cohabitation does not give rise to the presumption of a contract, and does not intend to be legally bound, then a court would be highly unlikely to enforce the contract. Similarly, if a contract is highly detailed, then a court will likely enforce it if it passes the statute of frauds requirement. However, if the parties resided together for seven to fifteen years and neither one ever indicated that they were going to marry each other, a court may not enforce the alleged agreement if one of the parties were to sue. Ideally, the parties involved would be able to articulate the basis of their agreement. For example, if Suitor A were to ask Suitor B to live together it might be because Suitor B was looking to get health insurance. It might be that Suitor A wanted a partner to hike every weekend. It might even be that Suitor A wanted a tax write-off. If Suitor B were to ask Suitor A, it would be for similar reasons. If the relationship dynamics shift and Suitor B leaves Suitor A without initial intention of returning the favor , Suitor A might have a claim at palimony.
In one of the earliest cases of its kind, Barlow (Suitor A) v. Ledyard (Suitor B), Barlow sued Ledyard for support after they had been living together for 30 years. In this case, Mr. Barlow had testified that he and Ms. Ledyard had lived in the same home, slept in the same bedroom, and amassed several joint bank accounts with substantial balances. Moreover, Mr. Barlow had even referred to Ms. Ledyard as "my wife" and was even called as such by third parties. At one point however, the couple agreed to have neither of them pay alimony to the other. Later, Mr. Barlow’s attorney filed a motion to terminate all previous orders and commence a new action for spousal support. The court later found that under New Jersey law, there were no legal grounds for Mr. Barlow to sue for alimony. Thus, Mr. Barlow lost his case but later appeared in the New Jersey State Governor’s Task Force on Discrimination to seek justice for what he felt has been a misinterpretation of the law.
Since Barlow, courts have challenged the concept of palimony, and many have required strict proof of exceptionality. Courts have demanded a higher threshold of evidence that outlines the balancing of equities in support of the case. Factors that could support a valid claim include:
The party who receives benefits under a palimony agreement is required to prove that they "intended" to alter their position to act as an inducement. Even in the face of these strict considerations, statute of limitations would enable Suitor B to sue at any time during the relationship, or after it has completed.
Palimony vs. Alimony
Palimony and alimony are used to provide post-separation financial support to a spouse or partner. While the two terms are often used interchangeably, they differ in some very important aspects.
The most significant difference between the two is that alimony is a court-ordered and mandated obligation that only exists between legally married people. With palimony, there absolutely must not be any marriage or legal union between the relevant parties.
Alimony is for couples legally recognized as spouses. This includes same-sex couples whose marriages are legally recognized by their state but do not include common law couples, who are not, in general, included in the "spouse" definition. As with most legal definitions, you should check your state’s statutes.
Palimony agreements can therefore be reached between unmarried people in a domestic partnership, civil union, registered domestic partners, same-sex couples and common law spouses. In the end, it doesn’t matter what you call it, as long as you understand that palimony agreements are entered into with people who never entered into an actual marriage.
Alimony is a court order and must be pursued through the judicial system. It can be obtained through a separation agreement or in the context of a divorce. Because it is a court order, it can be enforced by the local court system if the other party stops making alimony payments. With alimony, the full scope of the law is available to the aggrieved spouse for seeking alimony payments and enforcing them if they’re not being made.
Palimony agreements, on the other hand, are voluntary agreements that are just like a protracted business contract. Saying that you love someone and are committed to your relationship is not the same thing as signing on the dotted line and discussing the issues that could come to bear on the relationship and what the repercussions will be. In the absence of a legally enforceable court order, however, there’s not much that can be done when one party fails to live up to their end of the bargain.
Because palimony agreements must be reached voluntarily with guidance from attorneys and other professionals, they are most often entered into when the relationship ends in a way that does not assume that the two parties will be separating.
If, for example, you are living together but not married and you fall ill and then become disabled for the foreseeable future, your partner may have a legal obligation to provide you with support. Without a palimony agreement, however, this is not enforceable in any way, such as by garnishing their wages. Examples of when palimony agreements are appropriate include:
Married people who divorce usually enter into a legal contract that’s typically referred to as a separation agreement. While the alimony agreement contained within the contract may not be state-mandated, the agreement is still enforceable in state courts for the purpose of garnishing wages, withholding tax refunds, etc. Examples of instances where an alimony agreement is appropriate include:
In the end, both alimony and palimony are about fairness and reward: alimony is a reward for a spouse who has been faithful, treated their partner with respect and handled all the chores around the house, and palimony is a reward for the sacrifices made by a partner who has a legal claim and right every bit as strong as any married couple—and may be called into action when this bond is severed.
When Should You Get a Palimony Agreement?
Your attorney may tell you, "I’m pleased to report that you have grounds to pursue the palimony agreement." But what does that mean, and should you really go through with it? What are its benefits? And could it hurt your case for other support, such as spousal support, community property division, or child support?
A palimony agreement can cover a number of issues in a common law marriage. Rights to inheritance, death benefits, or gift tax benefits are some that can come to mind. Others might include insurance benefits or even trust distributions. They can also be used to establish responsibility for debts or financial obligations.
Many couples enter into an intimate partnership that carries on their lives together over a period of years or decades without seeking legal recognition or support. This is probably the most common situation for palimony cases in California. Such an agreement offers these couples security by addressing property and complicated issues of support. Life partners can be liable for child support, spousal support, or other financial obligations. However, without an agreement, that is left to the court’s discretion. Plus, a palimony agreement today is a lot easier than a complex dispute through the courts to settle an estate later.
But there are additional reasons to draft a palimony agreement.
- It can clear up any credit or debt issues.
- It can clarify whether a pre-martial agreement should apply.
- It can be the basis for a breach of contract claim against the partner who fails to agree to its terms.
Courts often look favorably on a palimony agreement. A well-paid attorney can help draw it up, and it may be worth the cost of having the asset protection it affords.
Seeking Legal Counsel
Like any contract, the language in a palimony agreement is crucial. Depending on the states of domicile of the parties, the drafting of a palimony agreement requires adherence to all or some of the Statute of Frauds requirements (i.e., must be in writing, signed, etc.) as well as the Statute of Limitations (solicitation of a petition for permanent support) to be effective and binding.
When meeting with a lawyer to discuss your potential palimony agreement, be prepared to give the attorney as much information about the relationship as possible (dates, purchases of property, bank statements, etc . ). By providing thorough and accurate information, the attorney can respond to your specific needs and requests. Also keep in mind that lawyers sometimes send out a retainer agreement which must be signed stating the scope of services to be rendered and payment provisions.
If litigation is involved, the lawyer will commence actions (in accordance with state law) and the involved parties will be responding with their own pleadings.