Domestic Partnership Agreements: Support upon Termination of the Relationship

This fourth installment of a 7-part series about Domestic Partnership Agreements discusses support when the couple’s relationship ends.

Florida law generally provides, when there is no premarital agreement, a spouse’s right to alimony on divorce depends on the spouse’s need for alimony and the other spouse’s ability to pay.  But, when a couple is not married, how are support rights determined?

No Palimony…But Creating Support Rights by Contract

Although Florida courts will honor common law marriages validly established in other states, Florida itself no longer has common law marriage. Florida law provides no support (or “palimony”) for unmarried couples. But domestic partnership agreements may establish contract rights and obligations for support.

Creative Options for Support

There are many, creative ways to structure support. Most provide for a fair amount based on how long the couple stay together and their respective financial positions if their relationship were to end.

Among many alternatives, couples may consider:

Option 1 – provide for nonmodifiable payments. The amount could vary based on how long the couple stays together. Agreements may provide different amounts of support to the partner if there are children of the relationship.

Option 2 – provide for a fixed amount of support, e.g., (a) for 2 years if the relationship is under 7 years; (b) for 4 years if the relationship is more than 7 and but less than 12 years; (c) for 10 years if the relationship is more than 12 and but less than 18 years; (d) for the provision to be void if the parties are together more than 18 years.

Option 3 – provide for a percentage of support based on each party’s prior year’s gross taxable income. The payment schedule could be as in Option 2.  But the amount, rather than being a fixed sum, would be calculated by taking a percentage of each party’s prior year’s gross taxable income less a percentage of the other party’s prior year’s gross taxable income, then dividing by 12 months. For example, if the greater money earner’s gross income for the prior year was $100,000 and the partner’s gross income were $30,000, annual support could be (30% X $100,000) – (20% X $30,000), or $24,000, and monthly support would be $2,000.

Taxes

IRS Publication 504 states, unmarried domestic partners (who are not considered “common law married”) can’t file joint U.S. tax returns, but may file only individual 1040 tax returns.

Individuals who have entered into registered domestic partnerships, civil unions, or other similar relationships that are a legal marriage under state (or foreign) law are not married for federal tax purposes.  Nevertheless, unmarried domestic partners, with the assistance of a tax professional, could calculate and make creative (legal!) financial agreements to lessen the tax burden them and retain more of their wealth.

Related Blog Posts

Read more about Florida Domestic Partnership Agreements: 

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