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Goodbye, Earl. Now Pay Up

Earl Johnson was married to a very wealthy, much older woman when he met flight attendant Fiona Bayne on a trip between London and Dublin.

Johnson initially kept his marital status to himself, but, eventually, the truth came out. When it did, however, neither Johnson’s elderly wife nor Bayne left him. Instead, the three started living together, and Bayne took on caretaking duties for Johnson’s wife, whose money allowed them all to live in luxury.

While this series of events might make a compelling novel, it made a messy court case. After Bayne left Johnson in 2000, she sued him for “palimony” in a case that was eventually decided last year. Bayne lost the case, but the fact that there was a suit at all points to an interesting, and frequently murky, legal realm that lies somewhere between family law and contract law.

A palimony case rests on the claim that one partner in a non-marital relationship made a promise, which might have been oral, written or merely implied, to support the other for the rest of his or her life. Our courts are frequently asked to figure out exactly what he said, what she said and when they said it.

Palimony exists not as any special right granted to unmarried couples, but rather as an application of contract law. In the eyes of the law, the sweet nothings whispered by lovers can become binding contracts.

Palimony got its start back in 1976 when Michelle Marvin, nee Triola, sued her long-term boyfriend, the actor Lee Marvin, claiming that the two had had an oral agreement that, in exchange for Michelle acting as a homemaker for the duration of their relationship, Lee would support her financially for the rest of her life. Michelle said that she had given up her own career on the basis of this promise, and she wanted the courts to enforce it.

The California Supreme Court ruled that the promise was potentially enforceable, throwing out arguments that such an agreement, if it existed, would be the equivalent of prostitution and therefore void. If Lee had indeed promised to support Michelle, he could be legally bound to do so, the Court said. Michelle’s lawyer, Marvin Mitchelson, coined the phrase “palimony” to refer to this “alimony” from a “pal.” In the end, a lower court ruled that, in the case of Michelle and Lee, there had been no contract, but the precedent had been set and the court doors were opened to future “palimony” cases.

Since then, palimony suits have marked the ends of many relationships between both opposite-sex and same-sex couples. In many cases, the contract at issue is not even an oral one, as it was with Marvin v. Marvin, but an implied one. By living together and acting as a married couple, jilted partners argue, couples demonstrate an implied agreement that their property is communal.

But, if acts demonstrate intentions, then shouldn’t the act of not getting married, at least when marriage is an option, demonstrate an intention not to be married? While some couples cannot get married because of their sexual orientation and state of residence, for most people who maintain long-term, non-marital relationships, marriage is an option that they consciously reject. Because marriage comes with obligations to support and share with your partner, it seems reasonable to infer that some people who do not get married simply do not want the obligations that marriage brings.

So how should courts sort out the commitments, or lack thereof, that two people may have made to one another?

New Jersey state senators Nicholas Scutari and Gerald Cardinale have suggested an answer. If a couple intends to share property or promise support, they should say so—in advance and in writing. The bill, S-2091, introduced in 2008, would add “a promise by one party to a non-marital personal relationship to provide support for the other party, either during the course of such relationship or after its termination” to the list of contracts New Jersey demands must be set down in writing to be enforceable.

The items already on the list include certain loan contracts and agreements by creditors to eschew the use of some available methods of collecting on debts. A separate statute stipulates that premarital agreements, or prenups, also should be in writing. Although state laws vary, generally contracts to buy or sell real estate, contracts to guarantee another person’s debts and contracts that will not be completed within one year must be written.

Whether written agreements are required or not, they are always a good idea. This is especially true in a relationship that might look like a marriage, except that it isn’t.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book Looking Ahead: Life, Family, Wealth and Business After 55.

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