For problems involving large deformations of thin structures, simulating fluid-structure interaction (FSI) remains a computationally expensive endeavour which continues to drive interest in the development of novel approaches. Overlapping domain techniques have been introduced as a way to combine the fluid-solid mesh conformity, seen in moving-mesh methods, without the need for mesh smoothing or re-meshing, which is a core characteristic of fixed mesh approaches. In this work, we introduce a novel overlapping domain method based on a partition of unity approach. Unified function spaces are defined as a weighted sum of fields given on two overlapping meshes. The method is shown to achieve optimal convergence rates and to be stable for steady-state Stokes, Navier-Stokes, and ALE Navier-Stokes problems. Finally, we present results for FSI in the case of 2D flow past an elastic beam simulation. These initial results point to the potential applicability of the method to a wide range of FSI applications, enabling boundary layer refinement and large deformations without the need for re-meshing or user-defined stabilization.