Property Rights of Unmarried Couples

Unmarried couples in New Jersey oftentimes assume that a shared life automatically creates shared property rights. They come to this conclusion whether they’ve lived together for six months or 16 years The stark reality is that this belief is unfounded. It is false. New Jersey law draws a sharp line between marriage or civil union and cohabitation without legal status when it comes to property rights of unmarried couples. That doesn’t mean an unmarried couple completely lacks rights. What it does mean is that the property rights of unmarried couples have other legal origins from such things as title, contracts, and equitable remedies.

These legal rights are not derived from the New Jersey family-law framework that governs an action like divorce. In this article, we discuss property rights of unmarried couples in the state of New Jersey.

No Common Law Marriage in New Jersey

A starting point for this discussion is recognizing that New Jersey does not recognize common law marriage. There is an exception in limited circumstances when a common law marriage validly was created in another state that recognizes that type of a union and a couple moves to the Garden State. As a consequence, if two people are not married or in a civil union, there are no automatic legal rights to what might fairly otherwise be called a divorce-style division of assets and debts. For unmarried couples, property generally belongs to whoever owns it “on paper” unless an enforceable agreement or another legal theory applies in a specific situation.

The Prevailing Rule: Title Controls

In the case of most significant assets potentially owned by unmarried couples in the state of New Jersey, the starting point is relatively clear:

• Real estate: The deed matters. If only one partner’s name is on the deed, that person is presumptively the owner. If both names are on the deed, they are co-owners (often as joint tenants with right of survivorship, or as tenants in common—language in the deed determines this).
• Bank accounts: The account title matters. A joint account is typically treated as jointly owned, though disputes can arise about contributions and intent.
• Cars, investments, valuable personal property: Registration, account ownership, receipts, and possession all matter.

This so-called title-first approach is why many unmarried couples at times are shocked at the time a breakup occurs. One partner may have paid half the mortgage or renovated the shared residence. However, if that person is not both on the deed or there’s no written agreement, the residence may remain in the full possession of person whose name is on the deed.

Protecting Legal Interests through Cohabitation Agreements

The most practical, and arguably most effective, way for unmarried couples to protect property rights, interests, and expectations is a written cohabitation agreement. A cohabitation agreement is a contract spelling out who owns what now, how future purchases will be titled, how shared bills are handled, and what happens if the relationship ends. A cohabitating couple is most wise to have this type of agreement drafted by an experienced attorney and not try to fumble through the creating of such a contract on their own.

A well-drafted cohabitation agreement addresses a variety of key elements that typically include:

• Whether a home is separate or jointly owned
• Buyout terms if one partner keeps the house
• How improvements and renovations are credited
• Treatment of joint accounts and savings goals
• Responsibility for debts (credit cards, loans)
• Personal property division (furniture, art, pets, and so forth)

New Jersey courts have the lawful ability to enforce cohabitation agreements like other contracts. This is the case provided that these agreements satisfy basic contract rules.

Palimony Claims in New Jersey

New Jersey is somewhat known for its so-called palimony history. With that said a critical current reality is that New Jersey requires a written agreement for a palimony claim to have legal traction. This present reality doesn’t end all claims between unmarried partners. However, it significantly limits the type of case based solely on verbal representations in New Jersey.

In the final analysis, New Jersey, unmarried couples do not get divorce-style property division simply because they built a life together. As we discussed, property rights are derived mainly from ownership documents and enforceable agreements, with courts sometimes stepping in through equitable remedies to prevent clear unfairness. If you have any questions or are in need of legal assistance, you can schedule a no cost, no obligation initial consultation by calling the Law Offices of Peter Van Aulen at 201-845-7400.