Unintended Consequences: Family Business, Nonmarital Cohabitation, and the "Committed Intimate Relationship"
Washington State does not have "common law marriage" but it does have a now well-developed (yet still evolving) body of law on "equity relationships" or "committed intimate relationships." This case law applies to two cohabitating unmarried adults and may, under certain circumstances, result in both partners in the relationship having rights akin to community property ownership when one partner holds title to assets and intends on being the sole owner.
An equity relationship is a "stable, marital-like relationship where both parties cohabit with knowledge that a lawful marriage between them does not exist."1 Relevant factors establishing an equity relationship include (1) continuous cohabitation, (2) relationship duration, (3) relationship purpose, (4) pooling of resources and services for joint projects, and (5) the parties’ intent.2
These factors are not exclusive as the court will examine all relevant evidence, and no factor is more important than another.3 Furthermore, a committed intimate relationship can start prior to marriage or a registered domestic partnership.4
Committed Intimate Relationship Property Rights
Once an equity relationship is determined, all property acquired by the parties through their efforts during the relationship is before the court for distribution upon termination of the relationship.5 The court will examine the relationship and property accumulation and make an equitable and just division of such property.
Despite the parties being unmarried, the court may use marital property characterizations such as "separate" and "community" property by analogy.6 However, unlike a marriage, the court only has what would be "community property" in a marital relationship before it at the end of an equity relationship.7
- Property acquired during marriage is presumed to be community, but such presumption may be rebutted. In general, property acquired during a committed intimate relationship by gift, bequest, devise, or descent and the rents, issues and profits thereof is not before the court for division. Additionally, the court may not dispose of the parties’ separate property.8
- Any increase in value of separate property is presumed to be separate in nature.9 However, "if the court is persuaded by direct and positive evidence that the increase in value of separate property is attributable to community labor or funds, the community may be equitably entitled to reimbursement for the contributions that caused the increase in value."10
- The labor of each party during a committed intimate relationship is community labor.11 However, a court may offset the "community’s" right of reimbursement against any reciprocal benefit received by the "community" for its use and enjoyment of the individually owned property.
- One party may unilaterally express an intent to terminate the relationship and the CIR.12 However, infidelity and a lack of romantic intimacy between partners does not automatically sever a committed intimate relationship where the parties remained a couple and continued to live together after one partner learned of the other’s infidelity; the court held that intimacy and commitment are factors but are not determinative.13
In one case, the court determined an eight-month period where the parties lived apart was not sufficient to terminate a committed intimate relationship when the parties reconciled and cohabitated for another decade; the court found that the period the parties lived apart did not restart the period of the committed intimate relationship.14
Time Deadlines for Filing Claims
The cause of action for establishment of a committed intimate relationship and equitable division of “community” property accrues at the termination of the relationship during the lifetimes of the parties or at the death of one of the parties and must be brought within three (3) years.15
Where the parties to a committed intimate relationship marry, the statute of limitations for enforcing a committed intimate relationship property distribution starts on the date the parties separate and the marital community ends.16 The burden of proof is on the person alleging a committed intimate relationship.
Protecting Your Family Business Assets from an Equity Relationship Cause of Action
In order to avoid a former partner of a family member potentially becoming a part of your family business, your family should be informed about "equity relationships" or "committed intimate relationships." Furthermore, you should consider asking family members who are unmarried and cohabitating with a romantic partner to enter into a written agreement with their partner.
At a minimum, this agreement should provide that any family business interests and all income and appreciation therefrom or thereon, regardless of how or when received or earned, is and will remain the family member’s "separate" property with no "community" like rights accruing with respect to reimbursement of efforts or funds or division of property upon relationship termination during life or at death.
We facilitate family discussions of this type and prepare property status/cohabitation agreements for unmarried cohabitating persons.
FOOTNOTES
1 Connell v. Francisco, 127 Wn.2d 339, 346, 898 P.2d 831 (1995)
2 Connell, 127 Wn.2d at 346
3 In re Marriage of Pennington, 142 Wn.2d 592, 602, 14 P.3d 752 (2000)
4 In re Domestic P’ship of Walsh, 335 P.3d 984 (Div. 1 2014)
5 In re Marriage of Lindemann, 92 Wn. App. 64, 69, 960 P.2d 966 (1998)
6 Connell, 127 Wn.2d at 351
7 Connell, 127 Wn.2d at 351
8 Lindemann, 92 Wn. App. at 69
9 Lindemann, 92 Wn. App. at 69
10 Lindemann, 92 Wn. App. at 69
11 Lindemann, 92 Wn. App. at 72
12 See In re Parentage of G.W.-F., 170 Wn. App. 631, 634, 285 P.3d 208, 210 (2012)
13 In re Committed Intimate Relationship of Murdian, 413 P.3d 1072 (Div. 2 2018)
14 Morgan v. Briney, 403 P.3d 86 (Div. 1 2017)
15 In re Kelly and Moesslang, 170 Wash. App. 722, 287 P.3d 12, 19 (Div. 3 2012), review denied, 176 Wash. 2d 1018, 297 P.3d 706 (2013)
16 In re Marriage of McBeth, 2019 Wash. App. LEXIS 2401, WL 4447560 (Div. 2 2019)