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But Who Gets the Dog? Cohabitation and Pet Ownership

by Taylor Lovett, Associate Attorney

Often relationships involve pets. It can be difficult and emotional to determine who gets to keep the animal when the relationship has ended. While pets feel like a member of the family, they are considered property under Wisconsin law. The Wisconsin Supreme Court has expressed some discomfort with considering pets as mere property, stating that doing so “fails to describe the value human beings place upon the companionship that they enjoy with a [pet].” Nevertheless, pets are considered property under the law. Because of this when pets are involved in divorce, the court determines custody of a pet by using the marriage property division statute, Wis. Stat. § 767.61. But this property division statute is inapplicable to non-martial cohabitation. Therefore, determining custody of a pet in a non-martial cohabitational relationship can be ascertained the same way other personal property division is decided.

In Wisconsin, the seminal case handling property division following a cohabitational breakup is Watts v. Watts.  In Watts, the couple lived together for 12 years, had 2 children together, and held themselves out as husband and wife though they were never married. When the relationship ended, the Wisconsin Supreme Court recognized “nonmarital cohabitation does not render every agreement between the cohabiting parties illegal and does not automatically preclude one of the parties from seeking judicial relief.” The court outlined several legal theories a plaintiff in this situation can use—first, the plaintiff can argue the couple had a contract to share equally the property accumulated during their relationship; second, the plaintiff can use the doctrine of unjust enrichment; third, the plaintiff can ask the court to create a constructive trust; and fourth, the plaintiff can rely on the doctrine of partition.

The Wisconsin Supreme Court decided Watts in 1987, and over time “unjust enrichment” has become the so-called “cohabitated divorce action.” Also called “quasi-contracts” or contracts implied by law rather than fact, unjust enrichment involves “obligations created by law to prevent injustice.” In Wisconsin, there are three elements that must be met to prove unjust enrichment. These are 1) A benefit conferring on the defendant by the plaintiff; 2) Appreciation or knowledge by the defendant of the benefit; and 3) Acceptance or retention of the benefit by the defendant under circumstances making it inequitable for the defendant to retain the benefit. In Watts, it would have been unfair to allow the defendant to keep everything while the plaintiff received nothing after all she had contributed to housekeeping, childrearing, and the defendant’s business.

Cohabitation alone does not give rise to an unjust enrichment claim. The claimant must establish there was a joint enterprise during the relationship in which both parties made financial contributions or services to the acquiring joint assets. This may or may not include joint financial accounts, joint tenancy in real estate, joint sharing of expenses, and even housekeeping and childrearing duties that allowed the other partner to acquire income and other property. In a pet ownership dispute, a judge may look to who bought the animal and paid various costs associated it with caring for it, such as purchasing food and paying veterinary bills, but will also consider who is the pet’s primary caretaker. For example, if Partner A paid the couple’s cat adoption fees, and generally takes the cat to the vet, buys the cat food and toys, etc., a judge may decide it would be unfair to allow Partner B to keep the cat in a breakup.

To avoid involving the legal system, a cohabitating non-married couple with a pet, or pets, could reach an agreement ahead of time regarding who gets to keep the animal(s), or come to a shared custody arrangement. Russell Law Offices, S.C. is here to help with your cohabitation questions.

Wisconsin Probate Administration

by Laine Carver, Associate Attorney

After a loved one passes away, family members are often left with the seemingly daunting task of administering the decedent’s estate. This can be overwhelming for some folks, especially if the decedent did not leave a will prior to death. However, with a bit of legal consultation, administration of a decedent’s estate, also known as probate, does not need to be so difficult. This article is intended to provide family members with a basic understanding of the probate process and hopefully make the experience less stressful for everyone involved.

Opening the Estate

The first step in opening an estate is to actually apply to do so. In this application, the applicant (generally an heir of the decedent) will provide information about the decedent, family members of the decedent, whether or not there was a will, and nominate the Personal Representative. The Personal Representative is charged with administering the estate. This is sometimes referred to as the Executor in other states.

In Wisconsin, most estates are administered either by Informal Administration or Formal Administration. Informal Administration allows the Personal Representative to administer the estate without direct involvement of the court. Formal Administration requires an attorney to be hired and is often the type of administration to choose when the estate is large, if there is a question of the legitimacy of a will, or if any other type of dispute may arise.

Once the Personal Representative is appointed, he or she will be issued Domiciliary Letters, which allows the Personal Representative access to the decedent’s information and assets, such as bank accounts, investments, safe deposit boxes, etc.

Once the estate is opened, the Personal Representative must publish a “Notice to Creditors,” which, as its name suggests, notifies creditors of the administration of the estate. Creditors will have 90 days to file a claim against an estate. If a creditor fails to file a claim in that time period, the debt owed to the creditor is likely never to be paid by the estate.

Inventory

The compiling of estate assets is the most time-consuming duty of the Personal Representative. The estate assets (and liens on those assets, like a mortgage) are accounted for on the Inventory statement that is filed with the court by the Personal Representative. The assets must be valued at their fair market at the time of the decedent’s death. Generally, if the asset is sold to a third party after the decedent’s death, the selling price is a sufficient value. If the asset is being purchased by an heir of the decedent or is going to be co-owned by beneficiaries, an appraisal of the asset may be necessary to obtain a fair market value.

Once the asset values are all accounted for, the Personal Representative will file the Inventory statement. Upon filing, the estate must pay an Inventory filing fee of .2% of the net value of the estate.

Closing the Estate

After the Inventory has been filed, the Personal Representative must do three things to close the estate. First, the Personal Representative must provide a full accounting of income, expenses, and distributions from the estate. This is done on the Final Accounting statement that will be filed with the Court. Second, the Personal Representative must distribute the estate assets according to the decedent’s will or the laws of intestacy (if the decedent died without a will). To confirm the assets have been appropriately distributed, the Personal Representative must obtain Estate Receipts from the heirs or beneficiaries that received the distributions. Once these are obtained, the Personal Representative files a Statement to Close the Estate, which ends the administration of the decedent’s estate.

Conclusion

Probate administration is a scary thought for many who just lost a loved one. However, with legal counsel who are well-versed in the process, it can be (relatively) quick and painless. If you or someone you know has questions about the administration of a loved one’s estate, do not hesitate to call Russell Law Offices, S.C. at 608-448-3360 to see how we can best serve you.

Rental Considerations for Cohabitating Couples

by Nathan Russell, Founder and Managing Attorney

When an unmarried couple shares a rented residence in Wisconsin, they may face a number of challenges in untangling their respective rights and obligations when they break up. The time that each individual spent at the dwelling – whether it’s an apartment, condominium, house, or cabin in the woods – may very well have constituted a form of a residential tenancy, each with their own rights to sort out.

When a cohabitating, unmarried couple splits up, among their initial rental considerations is determining the impact of the departure of either or both of them from the rented premises. The first step in working through this dilemma involves a review of the terms of the lease agreement. Not only would a lease agreement generally contain basic terms about the named parties, the rent and security deposit, the start and end date of the tenancy, and so on, but it may also contain terms surrounding more specific aspects of the tenancy, such as specifying how to proceed when a renter intends to terminate the agreement and vacate the premises prior to the expiration date. It may be the case that there is no written lease or that one of the residents is not named on the lease as a tenant. In such circumstances, either or both of the residents may still have developed tenancies at the premises, just in other forms, such as through a periodic tenancy or tenancy at will.

Other considerations involve the sublet or re-rental of the premises, the condition of the premises and security deposit, and the possibility of a lease termination agreement. If the lease describes procedures to sublet or re-rent the premises, the residents may find it worthwhile to communicate with the landlord about how to proceed. For example, even if the residents were able to procure new subletters, renters, or roommates to replace one or both of them under the lease, they may still need to obtain the landlord’s prior approval before putting that plan into action. If one of the cohabitants remains while the other leaves, one of them may wish to ask the landlord if they would be amenable to conducting a move-out walkthrough as, or immediately after, the former resident departs, to log the condition of the premises at that time (though the landlord may conduct one regardless, depending on the circumstances). Lastly, the landlord may offer that the departing renter/s pay a lump sum in exchange for an early termination of the lease. The parties should carefully weigh the costs and benefits of such an agreement based on their circumstances.

If the renter who remains (or hopes to remain) at the rented premises will be unable to pay their rent and other housing expenses following their former partner’s departure, they may want to act sooner rather than later, since the failure to pay timely rent could result in the accrual of late fees and an eviction being filed against them. In addition to efforts made to procure new subletters or roommates, such a renter may also consider requesting that the landlord allow them to move to a lower-cost rental unit, if the landlord or property is of a large enough scale to accommodate that request. Such a renter may also consider contacting local rental assistance programs to see if they would qualify for any financial assistance in meeting upcoming payment obligations.

Cohabitation involving a rented residence can present an added layer of difficulty when partners go their separate ways. Reach out to Russell Law Offices to assist you in navigating this legal landscape so you don’t have to go through it alone.

Cohabitation and Personal Property

by Justin Brewer, Associate Attorney

Cohabitation has become an increasingly popular for Wisconsin couples, young and old.  Many couples live together for years, sharing property, financial accounts, expenses, and housekeeping and childrearing responsibilities, all without getting married. But what happens when a cohabitating couple breaks up? When a married couple decides to separate, they have the divorce process. Further, the married couple’s personal property is considered martial property, and each partner has a legal right to it.

However, Wisconsin does not allow non-married couples to get a legal divorce, and their property is never considered marital property. While many states recognize common law marriages, which treat un-married couples as if they were married for legal purposes, Wisconsin abolished common law marriage in 1917. This creates unique problems for couples who may have lived together for years, accumulating personal property and financial assets, but who never married and thus do not have marital property protections.

One of the biggest problems facing cohabitating couples after a separation is deciding who owns shared property, and who gets to keep it. Personal property – generally any property that can be moved, as opposed to real estate – can be difficult to split. Some personal property comes with ownership papers or title information, like vehicles, or bank accounts. For other property, ownership is unclear, like furniture or appliances. Without the divorce process or marital property protections, cohabitating couples are left without a clear legal process for fairly and efficiently dividing their personal property.

How do couples split up property when both partners are legal owners or title holders? What happens when one partner takes more than their fair share of personal property? While cohabitating couples are left out of the divorce process, there are still some legal avenues for resolving these questions, namely unjust enrichment, and partition actions.

Unjust Enrichment

For Wisconsin cohabitating couples, unjust enrichment claims are one of the main legal options available during a separation. Unjust enrichment is legal relief and cause of action that relies on the principle that someone who receives a benefit has a duty to pay restitution if keeping the benefit would be unjust. For cohabitating couples, it is the primary way for partners to fairly distribute the value of their shared property – in some ways it is the divorce action for unmarried couples.

If a cohabitating couple separates, and one partner takes more of the personal property than is fair, an unjust enrichment claim is an option for the other partner. For example, if one partner takes all the furniture the couple purchased together, it would be unfair for that partner to keep it without paying the other partner. After all, it they didn’t buy the property by themselves! Similarly, if one partner stays at home to raise the couple’s children while the other partner goes to school or works, they might be able to claim that the other partner’s earnings should be split to avoid unjustly enriching that partner.

In cohabitation separations, couples can bring unjust enrichment claims to make their partners pay them for their contributions to property they have taken. To prove an unjust enrichment claim, a claimant must show that they worked together with their partner to accumulate property and financial assets, which the other partner has kept in an unreasonable amount without compensating the claimant. Claimants will have to show that they helped contribute financially to the accumulation of property either financially, or by contributing to childcare or housekeeping.

Claimants can show that they contributed to accumulating property in a number of ways. If the couple shared financial accounts, made home improvements for each other, paid for each other’s expenses or education, or contributed to childcare, then unjust enrichment claims may be available when another partner takes too much property after a separation.

Successful unjust enrichment claims make the partner who took or received too much property pay the other partner enough to make the split equitable.

Partition

When a couple owns property that has ownership papers or titles, splitting the property becomes trickier. While there is no legal document showing who owns a couch or appliance, there is for cars and bank accounts. When two partners co-own vehicles or accounts, one partner cannot just take the property. Partners can buy each other out of their ownership interests in this property, but when they can’t agree, they can turn to the court for a partition action. In a partition action, the court will order that the property in question be sold at a public auction. While this allows a cohabitating couple to fairly divide jointly-owned property, they are unlikely to get fair market value, and both partners would lose their interest in the property.

Cohabitation Agreements

Neither unjust enrichment claims, or partition actions are imperfect solutions. Lawsuits cost time and money, and the results aren’t always what a party wants. The best way to deal with a cohabitation break up is to plan for it before it happens. By creating a cohabitation agreement with your partner, you can establish rules and processes for who receives what property, and when after a separation. Cohabitation agreements are contracts, much like prenuptial agreements, that allow cohabitating couples to plan ahead. While it can be weird to plan for a breakup that hopefully never happens, a cohabitation agreement can save you an enormous amount of stress and money should you split from your partner.

If you are interested in making a cohabitation agreement, or are going through a cohabitation break-up and need help, the experienced team of family law attorneys at Russell Law Offices S.C. would be happy to discuss your case.

How to Choose an Entity for Your New Business

by Laine Carver, Associate Attorney

After years of dreaming of starting your own business, you have finally decided to take the chance in search of a better life. That’s a big step in the right direction—however, there is still so much to figure out. Among these unknowns is the type of legal entity you should use to structure your business. You’ve done a little research and are aware of corporations, limited liability companies and even limited liability partnerships. However, determining the legal structure that is best for your budding business can be overwhelming, and it is an important decision. This brief article should give you a basic understanding of the different legal entities, but consulting an attorney will always be the best way to ensure you are starting your business on the right foot.

SOLE PROPRIETORSHIPS

The simplest way to structure your new business is without a legal entity at all. This is what is called a sole proprietorship. A sole proprietorship is an arrangement that is very informal and consists of no organization. The business is the individual themselves. This poses a few legal problems.

First, there is absolutely no liability protection for the individual. For example, if you are an electrician operating as a sole proprietor, and you make a mistake that results in a house burning down, your entire net worth may be at risk in a lawsuit, including your house, vehicle, and retirement. Although you may have insurance, it may not cover all incidents and it may have a policy limit, leaving your personal assets exposed.

Second, sole proprietorships are more difficult to sell to a third party or pass down to your next generation. Because there is no legal entity, there is no business interest that can be sold, like stock or a partnership interest. Instead, there are simply the assets owned by the individual that can be purchased by a third party or passed to the next generation. This can be difficult to coordinate and market, reducing the value of the business. Furthermore, it could have negative tax implications.

For these reasons alone, most attorneys would not generally recommend that a person operate a business as a sole proprietorship.

CORPORATIONS

Corporations, on the other hand, are their own legal entity, completely separate from the individual owners. Corporations are a structure in which the owners of the business own shares of the corporation. The corporation owns the business assets and conducts operations. The corporation income can then be paid out to the shareholders in the form of a dividend. The most commonly known characteristics of a corporation is its liability protection for shareholders and what is commonly known as double-taxation.

Since a corporation is its own legal entity, any claims against the corporation generally end at the corporation level, thus protecting the corporation’s shareholders. Of course, if there is some sort fraudulent action taken by a shareholder, liability could flow to that shareholder. However, in general, corporations protect the shareholders from any liability that may result from the business’s actions.

The major downside to most corporations is the what is commonly referred to as “double-taxation.” When a corporation earns net income, that income is taxed at the corporate level. The rate is currently 21%. However, as mentioned above, the owners of the company do not have access to the corporation’s earnings until the corporation pays the shareholders in a form of a dividend. This dividend is taxable to the shareholder at the shareholder’s personal tax rate. Thus, since the corporation’s income is taxed at the corporation level and the dividend is taxed at the shareholder level, the income is double-taxed. This is not always bad, and can be used to a shareholder’s advantage in certain situations. However, most of the time, double-taxation is best avoided.

Some types of corporations avoid taxation at the corporate level. These are corporations that are allowed to make an election under subchapter S of the Internal Revenue Code. There are many restrictions on so-called “S” corporations, including limitations on the number of shareholders, the types of shareholders, etc.

LIMITED LIABILITY COMPANIES

Limited liability companies (“LLCs”) are a relatively new form of legal entity. They offer liability protection for the owners (“members”), and they can be taxed as a pure “pass-through” entity in which the business itself pays no taxes—only the individual members do. Because of this, LLCs have become extremely popular in the past couple decades.

The liability protection for LLCs is generally regarded as being equal to that of corporations. However, to benefit from the liability protection of an LLC, the business must be structured correctly. The business should have its own bank account. There should be a process for transferring money in and out of the account. Employees should be paid using a payroll system and payroll taxes must be paid accordingly. So long as procedures are installed and followed, the members of the LLC should be completely safe from any liability incurred by the business itself.

The biggest benefit of an LLC is the ability for it to be taxed as a partnership under Subchapter K of the Internal Revenue Code. This allows for the LLC to be a pure pass-through entity in which the LLC itself will not incur income tax. Additionally, setting itself apart from S corporations that are mentioned above, there is much more flexibility in the types of members, the number of members, and different tax strategies that may be used in an LLC compared to the S corporation.

CONCLUSION

In summation, there are many factors to consider in choosing a business entity type. For that reason, it is better to seek the advice of legal counsel in making such an important determination. If you or someone you know is considering starting a business, feel free to contact our team at Russell Law Offices, S.C. to set up a consultation and help decide what entity is best for you.

 

by Justin Brewer, Associate Attorney

Who Gets the Car? Cohabitation Breakups and Car Ownership

Cohabitation has become an increasingly popular relationship arrangement in Wisconsin. Unlike married couples, who have access to the divorce process, unmarried cohabitators have limited legal options for divvying up their property after a breakup.

Cars are some of the most important and valuable pieces of personal property that need to be divided after a break up. Cars are different from other types of property in that they come with ownership paperwork – there is a title to the car which shows who owns it, and what liens are attached to it. What happens to your car after a cohabitation breakup will depend heavily on who is named on the car’s title, and whether or not there are still outstanding car loans.

Who owns the car?

The first thing to figure out is who legally owns the car. Is it titled in one partner’s name, or both?

Sole Ownership:

If the car is titled in only one of the partner’s names, then legally they are the owner, and they get to keep the car after a cohabitation break up. Remember, marital property laws do not apply to non-married cohabitators! If the property is titled in someone’s name, it belongs to them.

However, if one partner helped contribute towards acquiring, or paying for the car, even if they aren’t on the title, they can make an unjust enrichment claim if the other partner decides to keep the car. Unjust enrichment occurs when a person receives a benefit, and accepts or keeps the benefit without paying for it, in a manner that would be unjust. In the case of car ownership, if one partner is the sole-owner of the car, and keeps the car, the other partner may have an unjust enrichment claim if they contributed to the acquisition or maintenance of the car. This would allow a partner who helped financed or improve the car get paid for their contributions to the car.

Joint Ownership

If the car is titled in both partners’ names, then the ownership question becomes messier. In these cases, the partners need to come to an agreement as to who will take full ownership after the breakup. The best option is for one partner to buy the other out of their half interest in the car, or for both partners to sell the car to a third party and split the proceeds.

However, if the couple cannot agree to a buyout, they can turn to a judicial action called a partition. In a partition action, the court will order the sale of the car at a public auction, and the partners will split the proceeds. This is the nuclear option for disagreeing couples – the car is usually sold for less than market value, and both sides will incur legal fees, in addition to losing their interest in the car.

What if your car isn’t paid off?

If there are outstanding car loans, then the loan servicer has an interest in the car, and based on loan agreements the car owners usually cannot sell or transfer the car without the loan servicer’s permission. Usually, in order to sell or split the car the car owner would have to pay off the remaining loan balance, either out of pocket or through refinancing. As such, outstanding car loans make deciding on car ownership all the more challenging.

In Joint-ownership cases, in order for one partner to be removed from the title, or for one partner to take on full ownership of the car, the car loan must be paid off either out of pocket or through re-financing. With outstanding loans, a partition is unrealistic, because loan servicers will require that the loan be paid off before the partition. Ultimately, your rights to the car will be determined by the loan agreement. Often, it will be easier for the partners to decide who will take the car, and re-title it after paying off the loan.

In sole-ownership cases, things get a bit easier. The partner who is titled to the car will get to keep the car. If they decided to give the car to the other partner, the couple would need to re-title, and re-finance the car to remove the old loan.

Figuring out how to handle a car after separation is difficult. If you have questions about how to split a car between partners, or if you need help with a cohabitation separation in general, the experienced family law team at Russell Law Offices, S.C. is ready to help.

 

What do you need to know about starting a business in Wisconsin?

by Justin Brewer, Associate Attorney

Starting a business is hard work! You may have an excellent product or idea for a future business, but creating and operating a business to capitalize on it takes significant planning. This article will give you a brief primer of the things you need to consider when forming a business, and the legal steps you need to take to make it official.

Business Planning

Before trying to create a legal entity for your business, or registering it with the State of Wisconsin, you need to put considerable thought into a business plan. First off you should pick a name, and a location to conduct your business. This may involve checking if your preferred name is already taken, and looking into areas you could establish a store front or office space. You should also conduct market research – who wants your product or service, how can you market it to them, and what are your competitors in the field?

Perhaps most important is creating a business plan. You should think about how you want to develop your product or service, how you want to sell and market it, and who will be a part of your business. You also need to know what your business’s financial requirements and burdens will be, and how much you need to sell in order to have a successful operation.

This is an incredibly important step – every entrepreneur needs a plan for growing their business and ensuring its long-term success and stability. Once you have a plan, you can begin to consider the legal business entities that are available to you, and how they match your needs.

What type of entity is right for you?

There are lots of different entity options for entrepreneurs. Depending on how direct you want your profits to be, or how much tax and other financial liabilities you want to expose yourself to, you should consider several options. One of the first questions is whether you want to incorporate your business or not.

Non-incorporated entities include sole proprietorships, and partnerships:

Sole Proprietorship – a sole proprietorship is an informal business entity that treats the business and its owner as one and the same. The profits of sole proprietorships go directly to the owner of the business. However, any liabilities for the business, financial or otherwise, also fall directly on the owner.

Partnerships – partnerships are like sole proprietorships, but with more business members. Generally, profits from the partnership are split directly by the partners, but like a sole proprietorship, the liabilities of the partnership are the responsibility of the partners. Wisconsin does allow limited liability partnerships (LLPs) in certain circumstances, which can help provide liability protections, while offering a partnership structure.

Non-incorporated entities like these provide maximum profit flow, and the simplest taxation structure – profits are taxed as personal income for the owner. However, the benefits of profit flow are balanced out by the direct exposure that owners have to legal and financial liabilities. They are a double-edged sword.

Incorporated entities include LLCs, and various types of corporations, statutory-closed corporations, and non-profit corporations:

Limited Liability Company (LLCs) – an LLC is an incorporated business entity, that has limited liability protections in place for the owners and managers of the LLC. LLCs are easy to maintain, and have good tax structures – company profits are passed through to the owners, and are taxed as personal income, which avoids double taxation. You can have an LLC be managed by the owners, or by a hired or elected management group.

Corporations – Full corporations are more complicated business entities. They can choose between S and C corporation status, which affects how the company and its owners are taxed. They require more filings with the state, and require more maintenance by the owners.

Incorporated entities are more closely regulated by state laws. LLCs are taxed only once, but some types of corporations can be taxed twice – once at the corporate level, and again at the personal income level. Corporations shield their owners from the financial and legal liabilities of the company, as long as the owners and managers don’t abuse the company for their own personal financial use.

The business structure you choose will depend on the unique characteristics of your business. For many small business owners, especially sole-owners, the LLC is a great option, but you should consult with a business lawyer to see what the best option is for your business.

What do you need to register?

Once you have picked a structure for your business, you need to take the appropriate steps to create and register the business. All businesses will need to name their business, choose a registered agent that will accept taxes and legal documents on behalf of the business, acquire an Employer Identification Number.

If you are creating a corporation, you also have to file articles of incorporation with the Department of Financial Institutions. Once you pay a filing fee, and submit the articles of incorporation and other basic business information, you have a registered business!

What else do you need to consider?

After registering your business, there are still several things to consider. Corporations and LLCs need to make annual filings with the State.

You should quickly create an operating agreement or corporate bylaws that will create guidelines for your partners, shareholders, and managers. Many small businesses register with the state, and then fail to create rules that govern their own corporations. Operating agreements, and bylaws create rules that govern how your business will function, and are the best way to deal with potential conflict between managers and owners before they happen. Attempting to resolve disputes without clear business rules can be expensive, and sometime fatal to the company.

Your business may need insurance, or special licenses. For example, bars are required to obtain liquor licenses among other things. Before you begin operating, make sure you have obtained all the proper licenses for business sector. You should also consider obtaining business banking and financial accounts, in order to keep a level of separation between you and your business, and to keep your business financials running smoothly.

If you have employees, you should consider compiling an employee handbook that establishes the rules your employees need to follow, and creates drug abuse and harassment policies. Properly managing your employees, and establishing protocols to manage employee conflicts will save your business money and headaches down the line.

Ultimately, starting a business is a complicated process, but with the right help, you can get your business off to a great start. If you want help forming a business, the experienced attorneys at Russell Law Offices, S.C. are here to help.

 

 

What Happens to the House When Unmarried Couples Break Up?

by Laine Carver, Associate Attorney

These days, it is not uncommon for people to be in long-term relationships in which they live in the same household as their partner without ever being married. This is oftentimes referred to as cohabitation.

In many states, including Wisconsin, marriage laws were created to attempt to leave both spouses in a similar financial position upon the dissolution of the marriage. However, those marriage and divorce laws do not apply to cohabitants who wish to terminate their relationship. Instead, the people involved in the break-up must piece-together separate areas of Wisconsin law to determine how the break-up should resolve. In this article, I will discuss what is likely the most expensive part of a breakup—determining ownership of real property owned by the once-loving partners.

There are three potential scenarios that play out when partners own real estate together and wish to end their relationship: (1) both partners agree to sell the property and split the proceeds; (2) only one partner wishes to retain the property and that partner has the money or credit to “buy-out” the other partner; or (3) both partners wish to keep the property and/or neither partner has the ability to buy-out the other. The third scenario is the focal point of this article.

When a person owns an interest in real property, there are specified remedies for which that person can sue. The first is for declaratory judgement, essentially asking the court to declare the person the owner of the property. The second is monetary damages. The third is for a partition of the interest in the real estate. The remedy of partition is sought when real property is owned by two or more people, and those people no longer wish to own property together.

There are three ways a court will handle a partition claim. First, if the court finds there is an easy way to divide the land by the portion of the real property interest owned by the parties (e.g., 50-50), the court will divide the land and grant each party their respective portion of the land.

Second, if the court does not see an easy way to divide the land according to the parties’ proportional interests, the court may appoint a third party (a referee) to attempt to draw a fair boundary to divide the land between the parties. The referee may conclude there is no fair way to divide the land and, therefore, it should be sold. Generally, the court will then order the sale of the property.

Third, the court may determine there is no fair way to divide the land as a matter of law and make the decision without the appointment of a referee. This is generally the case when the real property at dispute in a partition claim is a residence. In that scenario, the court will order the sale of the property, the proceeds of which will be distributed to the parties based on their proportional interest.

As you can probably tell, partition claims can be complicated and relatively expensive. That is why you should be sure to contact an attorney (1) to avoid entering into a situation in which a partition claim will be necessary, and (2), if you find yourself in the middle of a partition claim, to pursue or defend that claim to reach the best outcome for you. Please do not hesitate to contact Russell Law Offices, S.C. if you have any questions or concerns about cohabitation and the legal ramifications that may accompany it.