Many couples have not tied the knot but still have lives that are as closely connected and interlinked, as any married couple. In many ways, this is a nonissue, but it’s important to understand that without being legally married, couples lack some of the legal rights that we associate with close partnerships. In order to protect themselves legally, financially, and physically, unmarried couples must be aware of these issues and take proactive planning steps.
Accounts and Assets
When couples live together it only makes sense to share expenses and rely on the same assets. In the event of a breakup, however, dividing those assets can become complicated and contentious. In order to bypass these issues, it is recommended that couples keep assets – accounts, property, debts, etc. – separate. If you do elect to make a major purchase together – house, boat, etc. – make sure that it is registered in both of your names. In order to avoid future issues, some couples choose to enter into a written agreement outlining terms if the relationship ends, such as a Co-Owner of Residence Agreement.
You will also want to consider what happens to jointly owned assets in case of death. Without planning, you could end up owning property with a relative of your deceased partner. You should consider signing a will, and how you will take title to assets, such as tenants in common or joint tenants with right of survivorship.
Most people are aware that there are certain tax benefits to being married. But unmarried couples who are savvy can actually get even bigger deductions if they meet certain conditions. For example, if you support a dependent in the household you share with your partner, you may be able to claim “Head of Household” filing status and earn eligibility for a number of tax credits. Partners who pool money to cover shared expenses may also be entitled to tax breaks. Working with a tax professional is the best way to discover any savings or concerns you need to be aware of.
Injury and Disability
If you or your partner were to become temporarily or permanently disabled as a result of illness or injury, you would likely want important decisions to fall to the able-bodied partner. But without the right legal protections in place, it may be impossible for unmarried couples to make crucial decisions about each other’s finances and medical needs. A court proceeding may be required, and a judge may appoint someone other than your partner to act and make decisions, such as a parent. With a Durable Power of Attorney for finances, and a Living Will/Health Care Power of Attorney in place, unmarried couples can continue to provide love, support, and input.
Safeguarding a relationship, even an unmarried one, with legal protections is always a smart step. Couples want to dictate the terms of their own relationship, not to have the terms dictated to them by relatives, doctors, lawyers, or tax collectors. That means unmarried couples must go a step beyond and use the law to their advantage. Have a conversation with an attorney experienced in these issues by contacting Schloemer Law Firm, S.C.