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Financial Dangers Of Living Together And Not Being Married

There is an ever constant trend growing in America with more couples living together before they are married. In fact, some studies and recent census data suggest that almost half of all adults in the United States in their 30s and 40s live together in romantic relationships but aren’t married.

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While living together outside of wedlock has become an accepted norm throughout most sections of the country, many young couples are not thinking about the financial ramifications of it. There are many financial and legal aspects to living together without being married that you need to take into account in order to protect you and your loved ones.

Here are four quick aspects about your finances that you should consider when you are living with someone and are not married.

Who Pays For Your Mortgage After A Breakup?

Most married couples buy a house and title it as joint tenancy with right of survivorship. This is so the title will pass directly to a surviving spouse if one should die prematurely. How is your home’s title listed when you aren’t married? Are you protected if you break up? You both may pay the mortgage, but the bank will foreclose and destroy the credit of whoever’s name is on the mortgage.

Don’t Share Your Bank Accounts

Most financial experts and planners recommend that married couples merge their checking and savings accounts. This isn’t the case if you are living together and are not married. You do not want to share bank accounts with your significant other.

With joint accounts, your partner will have direct access and no requirement to discuss any withdrawals with you. This is fine and not an issue when things are going great in the relationship, but free access to your money with a joint account can quickly turn to trouble in a breakup if you are not careful.

Don’t Help Out With Their Debt

Just like sharing your bank accounts, you do not want to comingle your debts with one another if you are not married either. While no one want to think about ending a relationship that is blossoming, you have to protect yourself, your finances, and your credit score.

If you cosign for debt or get add your boyfriend or girlfriend on your credit card, you are opening yourself up to potential disaster. You could find yourself holding more than half of the combined debt if you are not careful. You will also open yourself up to being hurt if your loved one files for bankruptcy or simply stops paying on their debts.

Will You Be Protected In Probate Court?

Husbands and wives receive preferential benefits in most states even if one dies without a last will and testament. That may not be the case if you simply live together and are not married. You will need a will that lists who your assets will go to should you die.

Most states will bypass a significant other in search of other relatives like a parent or sibling if you do not have a will that specifically lists the person you are living with out of wedlock.

Over 6.7 million unwed American now live together according to the most recent US Census data. There is an inherent financial risk to living with someone and comingling your finances when you are not married. Do you know someone who has bought a house, car, or made some other large purchase with a boyfriend? Have you comingled your finances yourself with a significant other? Have you thought about the ramifications of breaking up?

Photo Credit: CC Chapman

Hank Coleman
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