Breaking up is hard to do. But once you and your unmarried partner have actually separated and each of you has reached some degree of emotional and physical stability, you should find it much easier to resolve any remaining areas of conflict. While each breakup comes with its unique disputes, there are a few general rules, procedures, and tasks that unmarried couples will probably want to follow when they split.
1. The first big step is to make a clear list of the remaining issues each of you believes need to be resolved—from who owns what furniture to who gets to keep the apartment.
2. Keep in mind that the easiest and most direct way to resolve your conflicts is to negotiate with each other directly--either face-to-face, by phone, or by email. Keep good notes of your discussions and write down any agreements you reach.
3. Decide which of several available procedures you are going to use to attempt to resolve the disputes you can’t work out without help (for example, mediation or arbitration). Once you agree on the method you’ll use to resolve your disputes, put your plans in writing and sign the document so you can move on to tackle the substantive issues. The Agreement to Mediate and Arbitrate form included here can get you started.
4. Take stock of the emotional barriers that may prevent resolution (maybe you blame your ex for the breakup), and try as hard as you can to overcome them. In addition to mediation, this may require formal separation counseling or meeting at a “safe place” with a trusted mutual friend who can work to calm your anger.
5. Figure out a realistic pace and timetable for resolving your substantive disputes. Commit to a schedule of meetings, phone calls, or emails, and then make a conscious effort to keep the ball rolling.
6. Attempt to limit your discussions to practical items such as who will get to keep certain property. Focus on finding solutions, not allocating blame. Don’t view your meetings as an opportunity to try to resolve the emotional rifts of your dissolution (any separation counseling should take place at another time).
7. Educate and empower yourselves to handle property disputes rationally and competently. For example, for house-related disputes you may need to get an appraisal or learn the exact process of transferring title. For automobile disputes, you will want to determine the car’s actual sales value and obtain a form from the state for transferring ownership.
8. Check out the possible tax implications of your separation. For couples with major assets (especially those that have increased in value), a visit to a tax consultant or financial adviser may be necessary. Separating couples are often tempted to value assets and divide them 50-50 (or according to some other percentage that they agree is fair). But before you do this, consider the tax consequences. If your assets have appreciated (for example, the value of your stock in XYZ Corp. has tripled), the person who gets the asset will have to pay tax on it when sold. This can result in an unfair distribution between the partners because the other partner doesn’t bear the tax burden. Also, if one partner transfers an asset to the other partner, the partner making the transfer may be subject to gift tax and the recipient may be subject to capital gains tax—taxes that married couples transferring assets don’t face. In some states, significant tax penalties are imposed whenever real estate interests are transferred between unmarried partners. The bottom line: Before splitting assets, get tax advice from an expert. For an overview of the issues involved when splitting assets that have appreciated, see the Nolo book Divorce and Money, by Violet Woodhouse—though geared towards divorcing couples, this book provides valuable advice for unmarried couples as well.
8. Figure out a starting negotiating position. Do this by evaluating the likely outcomes for each area of dispute in the context of what it could cost to mount a serious court battle; for example, you may decide that accepting 40% instead of 50% of the amount in dispute makes more sense than engaging in protracted litigation. Once you determine your own bottom line, it’s usually best to keep it to yourself—at least for a while. It’s often unwise to offer too big a compromise too soon—unless your ex is really willing to settle all disputes quickly and reasonably. Better to offer a series of small concessions, hoping your partner will begin to do the same, allowing you to work together to find common ground.
9. Assuming you agree on at least some things, start by writing them down. Then, as you work out the rest of the issues in dispute, add these to your “agreed-upon” list so that you gradually build a comprehensive agreement. If your agreement is fairly short, a simple exchange of letters or emails is perfectly legal, as long as it is clear at the end of the day what you both agreed to. Once you have settled a number of issues, prepare a written settlement agreement, such as the one discussed in the article Property Settlement Agreements for Unmarried Couples.
10. Last, but certainly not least, you need to conscientiously implement your agreement. This means promptly completing and signing all the paperwork required to record and carry out its provisions. For items such as furniture and art objects, it may simply be a matter of hiring a mover. For financial accounts, a joint letter to the bank or the stock broker will usually be sufficient. For real estate transfers, a more formal set of tasks awaits you, as discussed in Property Settlement Agreements for Unmarried Couples.