FAMILY LAW Q&A
We Built a Business Together
Lived Together and Now It's Over...
Do I Have a Legal Claim to the Business?
November 2011: Getting engaged is an exciting time in any couples life, yet 20% of all engagements never make it to the alter. What happens when a couple lives together, builds a life and business together and then splits up? Is the party that doesn't own the business have stake? Is there anything he or she can do? Are there agreements engaged couples with joint property and business interests should have in place upon engagement just in case they end up in that 20%? This is the issue in this week's question with Steve Mindel, Couples Company's Family Law Expert.
Dear Steve:
I've been living with my fiancé for the past three years and I've decided I don't want to get married. The problem is when I moved in with him, I gave his adult children all of my furniture and housewares (so they'd move out of the house finally) and now I've got nothing. I've been working with him on his businesses, so I don't have my own income anymore. He doesn't pay me. We've been building the businesses together. If we were married, I'd be entitled to a portion of the businesses we've been building, but since we never said 'I do', my understanding is I have no claim and nothing to stand on. I really want out but I don't have any money nor any possessions anymore. Is there anything I can do?
Tricia,
Rancho Cucamonga, California.
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Dear Tricia:
Your situation is reflective of many couples who find themselves in your position. Essentially, the question is going to be whether or not your fiancé made specific promises to you. It is clear that you will need to meet with a family law attorney who is familiar with both California Family Law and California Partnership Law. Your family law attorney may want to consult with an attorney who focuses in the area of employment and labor law. Since it is unlikely that you would have worked for free, it may be the case that you have additional rights as an employee of the business. This issue should be fully explored with an attorney.
Prior to your meeting, you should make a list of all of the promises that each of you made to each other during your relationship.
Did your fiancé promise that he would pay for any, or all, of your expenses while you lived together, or possibly, after you broke up?
Your attorney will also be very interested to hear about any agreements or promises that you and your fiancé made with regard to the business: e.g. did you and your fiancé have a discussion about who owns the business?
Clearly, most people would not be willing to work for free. The question now becomes whether or not you were properly compensated for your work and services to the business, as well as whether or not your fiancé promised you any ownership interest in the business. Clearly any written communications such as emails, text messages, or even holiday cards could be helpful to prove your version of the story is the correct version.
While oral promises are difficult to prove, and juries are often skeptical about oral agreements between couples, and for that matter business partners, it is possible for a jury to find that the two of you had an agreement and for a Court to enforce your agreement.
Obviously, the best solution would have been for you and your fiancé to have had a COHABITATION AGREEMENT or a BUSINESS AGREEMENT to establish your obligations to each other in your relationship, and a Partnership or other Business Agreement to establish your duties and obligations with regard to your business. A knowledgeable family law attorney should be able to help you to determine your rights and possibly your responsibilities.
About the Author: Steven A. Mindel is a Certified Family Law Specialist and the Managing Partner of Feinberg Mindel Brandt & Klein LLP, a 15 attorney firm that concentrates in the areas of Family Law, Estate Planning, Probate and Trust Administration in Los Angeles California. Mr. Mindel has been listed as one of Southern California's Top 100 lawyers for the past 5 years and has been recognized as a Super Lawyer by Los Angeles Magazine since 2004.
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