First Comes Love, Then Comes … the House?

Reviewed Apr 18, 2015

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Summary

  • Unmarried couples don’t benefit from the same legal protections as married couples.
  • It can be more difficult to break up co-ownership of a house than to get a divorce. 

First comes love, then comes … a house? A car? A joint checking account? For couples who choose to wait on marriage or can’t tie the knot, that scenario may well be the case. Before you and your partner say “I do” to a mortgage, car payment or other large purchase, plan ahead to protect yourselves in good times and in bad.

Just the facts

Consider whether you and your partner fit into these statistics: About 7.5 million people live with an unmarried partner, according to the 2010 American Community Survey by the U.S. Census Bureau.  And, single couples represent about 8 percent of homebuyers, according to a 2012 report by the National Association of Realtors. Yet almost half of cohabitations break up within 5 years, Centers for Disease Control and Prevention National Survey of Family Growth data show.

Unfortunately, unmarried couples don’t benefit from the same legal protections their married counterparts do. In fact, more than 1,140 federal laws apply to married couples, covering everything from credit cards to homes—but not to couples who are unmarried, write Sheryl Garrett and Debra A. Neiman in Money Without Matrimony.

If you fit the profile, whether you’re a member of a same-sex or opposite-sex couple, it makes sense to plan before making a big purchase. And if the numbers haven’t provided the impetus for action, consider these truths:

  • It can be more difficult to break up co-ownership of a house than to get a divorce. 
  • Without a marriage license, unmarried couples have to establish a legal relationship on their own.
  • If you accumulate property with a partner and then break up, you could face a serious battle over how to divide those acquisitions and financial obligations. 
  • You will need to protect yourself and your partner in the event of unexpected disability or death.

Advice to heed before making a large joint purchase

Couples should disabuse themselves of the notion that financial planning is unromantic or a sign of wavering love—it just makes good sense to treat economic commitments as a business partnership. If you’re thinking of making a large purchase with your partner, it’s much better to ask questions before opening your wallet than after encountering trouble in paradise.

Before merging assets or making a large purchase:

  • Consider your partner’s financial liabilities; those liabilities also could affect you in the future.
  • Weigh potential liability issues carefully—for example, a joint car purchase could become problematic in the event of an accident. 
  • Decide how you will both contribute to common expenses; consider opening a shared checking account. 
  • Be wary of contributing large sums of money to an asset that is held only in the name of your partner.  

Put it in writing

Experts at Nolo and other organizations recommend that unmarried couples prepare property agreements, which can help provide both partners with some measure of protection. An agreement should be in writing, signed and notarized, and should include very specific details about the purchase and ownership, maintenance, sharing of income and expenses, and also division of property and resolution of disputes in the event of dissolution of the relationship. Those issues could become especially significant with a big and complicated investment such as a home, according to Nolo.

If you’re purchasing a house together, you also should consider how the ownership will be listed on the deed. Among other implications, this would affect how the property would be passed along in the event of the death of one partner. For example, “joint tenants with rights to survivorship” would allow one partner to automatically inherit the home if the other dies, while “tenants in common” means that if one partner dies, that share of the home would go to whoever is named in a will or trust, or to blood relatives in the absence of an estate plan.

A family lawyer can help structure a property agreement and alert you to any laws that might affect your situation. Most importantly, do your planning in good times, when you and your partner are more likely to be fair.

By Kristen Knight
Source: Financial Self-Defense for Unmarried Couples: How to Gain Financial Protection Denied By Law by Larry M. Elkin. Doubleday Currency, 1995; First Comes Love, Then Comes Money: How Unmarried Couples Can Use Investments, Tax Planning, Insurance and Wills to Gain Financial Protection Denied By Law by Larry M. Elkin. Currency Doubleday, 1994; Money Without Matrimony: The Unmarried Couple's Guide to Financial Security by Sheryl Garrett. Dearborn Trade Pub., 2005; About Personal Finance for Unmarried Couples, http://financialplan.about.com; Bankrate.com, www.bankrate.com/; Centers for Disease Control and Prevention National Survey of Family Growth, www.cdc.gov/nchs/nsfg.htm; Detroit News Online, www.detnews.com; Nolo, www.nolo.com; United States Census Bureau, www.census.gov/; The Alternatives to Marriage Project, http://www.unmarried.org/mission-statement/; National Association of Realtors, http://www.realtor.org/news-releases/2012/11/nar-survey-of-home-buyers-and-sellers-shows-dual-income-couples-fueling-market

Summary

  • Unmarried couples don’t benefit from the same legal protections as married couples.
  • It can be more difficult to break up co-ownership of a house than to get a divorce. 

First comes love, then comes … a house? A car? A joint checking account? For couples who choose to wait on marriage or can’t tie the knot, that scenario may well be the case. Before you and your partner say “I do” to a mortgage, car payment or other large purchase, plan ahead to protect yourselves in good times and in bad.

Just the facts

Consider whether you and your partner fit into these statistics: About 7.5 million people live with an unmarried partner, according to the 2010 American Community Survey by the U.S. Census Bureau.  And, single couples represent about 8 percent of homebuyers, according to a 2012 report by the National Association of Realtors. Yet almost half of cohabitations break up within 5 years, Centers for Disease Control and Prevention National Survey of Family Growth data show.

Unfortunately, unmarried couples don’t benefit from the same legal protections their married counterparts do. In fact, more than 1,140 federal laws apply to married couples, covering everything from credit cards to homes—but not to couples who are unmarried, write Sheryl Garrett and Debra A. Neiman in Money Without Matrimony.

If you fit the profile, whether you’re a member of a same-sex or opposite-sex couple, it makes sense to plan before making a big purchase. And if the numbers haven’t provided the impetus for action, consider these truths:

  • It can be more difficult to break up co-ownership of a house than to get a divorce. 
  • Without a marriage license, unmarried couples have to establish a legal relationship on their own.
  • If you accumulate property with a partner and then break up, you could face a serious battle over how to divide those acquisitions and financial obligations. 
  • You will need to protect yourself and your partner in the event of unexpected disability or death.

Advice to heed before making a large joint purchase

Couples should disabuse themselves of the notion that financial planning is unromantic or a sign of wavering love—it just makes good sense to treat economic commitments as a business partnership. If you’re thinking of making a large purchase with your partner, it’s much better to ask questions before opening your wallet than after encountering trouble in paradise.

Before merging assets or making a large purchase:

  • Consider your partner’s financial liabilities; those liabilities also could affect you in the future.
  • Weigh potential liability issues carefully—for example, a joint car purchase could become problematic in the event of an accident. 
  • Decide how you will both contribute to common expenses; consider opening a shared checking account. 
  • Be wary of contributing large sums of money to an asset that is held only in the name of your partner.  

Put it in writing

Experts at Nolo and other organizations recommend that unmarried couples prepare property agreements, which can help provide both partners with some measure of protection. An agreement should be in writing, signed and notarized, and should include very specific details about the purchase and ownership, maintenance, sharing of income and expenses, and also division of property and resolution of disputes in the event of dissolution of the relationship. Those issues could become especially significant with a big and complicated investment such as a home, according to Nolo.

If you’re purchasing a house together, you also should consider how the ownership will be listed on the deed. Among other implications, this would affect how the property would be passed along in the event of the death of one partner. For example, “joint tenants with rights to survivorship” would allow one partner to automatically inherit the home if the other dies, while “tenants in common” means that if one partner dies, that share of the home would go to whoever is named in a will or trust, or to blood relatives in the absence of an estate plan.

A family lawyer can help structure a property agreement and alert you to any laws that might affect your situation. Most importantly, do your planning in good times, when you and your partner are more likely to be fair.

By Kristen Knight
Source: Financial Self-Defense for Unmarried Couples: How to Gain Financial Protection Denied By Law by Larry M. Elkin. Doubleday Currency, 1995; First Comes Love, Then Comes Money: How Unmarried Couples Can Use Investments, Tax Planning, Insurance and Wills to Gain Financial Protection Denied By Law by Larry M. Elkin. Currency Doubleday, 1994; Money Without Matrimony: The Unmarried Couple's Guide to Financial Security by Sheryl Garrett. Dearborn Trade Pub., 2005; About Personal Finance for Unmarried Couples, http://financialplan.about.com; Bankrate.com, www.bankrate.com/; Centers for Disease Control and Prevention National Survey of Family Growth, www.cdc.gov/nchs/nsfg.htm; Detroit News Online, www.detnews.com; Nolo, www.nolo.com; United States Census Bureau, www.census.gov/; The Alternatives to Marriage Project, http://www.unmarried.org/mission-statement/; National Association of Realtors, http://www.realtor.org/news-releases/2012/11/nar-survey-of-home-buyers-and-sellers-shows-dual-income-couples-fueling-market

Summary

  • Unmarried couples don’t benefit from the same legal protections as married couples.
  • It can be more difficult to break up co-ownership of a house than to get a divorce. 

First comes love, then comes … a house? A car? A joint checking account? For couples who choose to wait on marriage or can’t tie the knot, that scenario may well be the case. Before you and your partner say “I do” to a mortgage, car payment or other large purchase, plan ahead to protect yourselves in good times and in bad.

Just the facts

Consider whether you and your partner fit into these statistics: About 7.5 million people live with an unmarried partner, according to the 2010 American Community Survey by the U.S. Census Bureau.  And, single couples represent about 8 percent of homebuyers, according to a 2012 report by the National Association of Realtors. Yet almost half of cohabitations break up within 5 years, Centers for Disease Control and Prevention National Survey of Family Growth data show.

Unfortunately, unmarried couples don’t benefit from the same legal protections their married counterparts do. In fact, more than 1,140 federal laws apply to married couples, covering everything from credit cards to homes—but not to couples who are unmarried, write Sheryl Garrett and Debra A. Neiman in Money Without Matrimony.

If you fit the profile, whether you’re a member of a same-sex or opposite-sex couple, it makes sense to plan before making a big purchase. And if the numbers haven’t provided the impetus for action, consider these truths:

  • It can be more difficult to break up co-ownership of a house than to get a divorce. 
  • Without a marriage license, unmarried couples have to establish a legal relationship on their own.
  • If you accumulate property with a partner and then break up, you could face a serious battle over how to divide those acquisitions and financial obligations. 
  • You will need to protect yourself and your partner in the event of unexpected disability or death.

Advice to heed before making a large joint purchase

Couples should disabuse themselves of the notion that financial planning is unromantic or a sign of wavering love—it just makes good sense to treat economic commitments as a business partnership. If you’re thinking of making a large purchase with your partner, it’s much better to ask questions before opening your wallet than after encountering trouble in paradise.

Before merging assets or making a large purchase:

  • Consider your partner’s financial liabilities; those liabilities also could affect you in the future.
  • Weigh potential liability issues carefully—for example, a joint car purchase could become problematic in the event of an accident. 
  • Decide how you will both contribute to common expenses; consider opening a shared checking account. 
  • Be wary of contributing large sums of money to an asset that is held only in the name of your partner.  

Put it in writing

Experts at Nolo and other organizations recommend that unmarried couples prepare property agreements, which can help provide both partners with some measure of protection. An agreement should be in writing, signed and notarized, and should include very specific details about the purchase and ownership, maintenance, sharing of income and expenses, and also division of property and resolution of disputes in the event of dissolution of the relationship. Those issues could become especially significant with a big and complicated investment such as a home, according to Nolo.

If you’re purchasing a house together, you also should consider how the ownership will be listed on the deed. Among other implications, this would affect how the property would be passed along in the event of the death of one partner. For example, “joint tenants with rights to survivorship” would allow one partner to automatically inherit the home if the other dies, while “tenants in common” means that if one partner dies, that share of the home would go to whoever is named in a will or trust, or to blood relatives in the absence of an estate plan.

A family lawyer can help structure a property agreement and alert you to any laws that might affect your situation. Most importantly, do your planning in good times, when you and your partner are more likely to be fair.

By Kristen Knight
Source: Financial Self-Defense for Unmarried Couples: How to Gain Financial Protection Denied By Law by Larry M. Elkin. Doubleday Currency, 1995; First Comes Love, Then Comes Money: How Unmarried Couples Can Use Investments, Tax Planning, Insurance and Wills to Gain Financial Protection Denied By Law by Larry M. Elkin. Currency Doubleday, 1994; Money Without Matrimony: The Unmarried Couple's Guide to Financial Security by Sheryl Garrett. Dearborn Trade Pub., 2005; About Personal Finance for Unmarried Couples, http://financialplan.about.com; Bankrate.com, www.bankrate.com/; Centers for Disease Control and Prevention National Survey of Family Growth, www.cdc.gov/nchs/nsfg.htm; Detroit News Online, www.detnews.com; Nolo, www.nolo.com; United States Census Bureau, www.census.gov/; The Alternatives to Marriage Project, http://www.unmarried.org/mission-statement/; National Association of Realtors, http://www.realtor.org/news-releases/2012/11/nar-survey-of-home-buyers-and-sellers-shows-dual-income-couples-fueling-market

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