What happens to joint property when the engagement is called off?

How Joint Property is Split When an Engagement Ends

Today, many engaged couples begin purchasing joint property well before the marriage takes place. They move in together or even purchase a new home and begin securing the building blocks for their new life together.

But when the relationship doesn’t work and the engagement is called off, many are left wondering how to split what would have effectively been the marital estate if the marriage had in fact taken place.

It’s important for engaged couples to realize that, until they are officially married, the “marital estate” does not exist. The only exception to this would be if the couple could meet the requirements for a common-law marriage and reside in a state where common-law marriage is recognized, then they could possibly handle the property distribution in divorce court.

But such an exception notwithstanding, the ex-fiances are typically regarded as “roommates” and any property purchased will be treated as owned by the person who actually made the purchase. Property truly purchased jointly (i.e. with joint funds) and property titled jointly (i.e. real estate or cars) are stickier issues. As a result, the couple could find themselves in a lengthy (and expensive) court battle and without the normal protections afforded to couples in divorce court. The court may consider financial contribution to the purchases, gifting of various pieces of property and other matters in dividing the property. It is not at all unusual for the court to order real estate to be sold with any proceeds divided between the former couple.

To alleviate this problem, it is highly recommended that couples draft a property agreement or cohabitation agreement. This type of document allows couples to outline how property will be owned and what will happen in the event that the relationship ends before a legal marriage takes place.

Cohabitation agreements can include everything from general property distribution to the right to make medical decisions for the other in the event that they are unable to voice their wishes. Cohabitation agreements can also include how debts will be split as well as any agreements regarding financial support after the breakup.

You may also want to read this book about cohabitation agreements .