Nearly 7% of households were headed by unmarried opposite-sex couples in 2015, according to the Census. When same-sex couples are included, that adds up to more than 12 million unmarried partners (Source).
Cohabitation in the United States is often seen as a natural step in the dating process (Source). However, the standard financial planning for married couples doesn’t always work for their unmarried peers.
Legal Rights Aren’t Implied
If you’re in a long-term committed relationship, have you considered a formal domestic partnership agreement? It is a document that explicitly states legal and financial rights and responsibilities for each partner: how they will share assets, income, bank accounts, property, and expenses.
With a married couple, there is an implied estate plan if one dies. Conversely, with unmarried couples, everything must be legally documented, including: health care proxy, will, power of attorney, life and retirement beneficiaries.
When Kids Join The Mix
Some 39% of cohabiting opposite-sex households include children under age 18, according to the Census Bureau. In fact, about one-quarter of births to women aged 15–44 occur in a domestic partnership, double the rate from the early 2000s and higher than the rate for single mothers (Source).
When Property Joins The Mix
Consider the scenarios & conclusions presented in this article about how being unmarried can affect property:
It states: “What if Kanye owns his home and Kim moves in? Unless Kanye lists her on the property deed, Kim can’t be listed on the homeowners insurance policy. Kim is technically a tenant and needs her own renters insurance policy if she wants coverage for her personal property. If she moves everything she owns into Kanye’s home and it burns to the ground, again, that couple better trust each other. If not, Kim could be left without any belongings or a home because she doesn’t have any insurance to cover her loss.”
When Considering Remarriage
For seniors who have been married before, remarriage comes with its own costs. A lot of tough questions must be asked about the financial ramifications they might ensure if remarried.
- Will getting married alter the nest egg they planned to leave their children?
- Will they no longer be eligible for alimony or pension benefits if they remarry?
- How will it affect health insurance?
We’re firm believers that all families must make the right decisions for their unique financial picture. No matter your family situation or configuration, you must have the right tools to ensure all of your financial bases are covered. Make sure to educate yourself.