Financial tips for unmarried couples

By LAURA T. COFFEY

© St. Petersburg Times, published April 1, 2001

According to a 1998 census report, more than 5-million unmarried couples live together in the United States. If you fall into this category, consider these tips for securing benefits and protecting your money and property.

1. Seek out insurance breaks. Married couples are more likely to get discounts on their homeowners, renters and auto insurance policies. Some insurers will extend that discount to domestic partners and even to roommates. Call around for a variety of quotes.

2. Inquire about domestic partner benefits. Some companies offer health benefits, pension benefits, bereavement, sick leave and other provisions to the unmarried partners of their employees. Ask your employer what's available.

3. Consider a contract. When married people split up, they have a ready-made legal instrument, the divorce proceeding, to help them keep some or all of their assets. Unmarried couples don't have the same protection. Consider drawing up a written agreement about your finances, property you owned before you started living together and property you bought or inherited during your relationship.

4. Remain financially independent. Financial advisers recommend that unmarried people maintain separate credit cards and bank accounts. Meanwhile, they say it's usually not a problem to have a joint checking account for basic household expenses.

5. Be wary about co-signing. Avoid co-signing a loan or applying for a joint credit card unless you're prepared to assume full responsibility for that debt.

6. Watch those titles. If you want your real estate or other property to go to your partner after your death, you can title assets jointly with rights of survivorship. This approach designates both of you as owners of half the property, regardless of how much money you put into the investment.

7. Consider becoming "tenants in common." If you buy property together and one pays substantially more than the other, you can become tenants in common and specify who owns what percentage of the property in the deed. With this approach, the surviving partner does not have rights to the entire property.

8. Give thought to estate planning. You must make specific provisions in your will if you want your partner to inherit your assets. Consult with a lawyer who has experience with wills, trusts and the probate process.

9. Avoid estate taxes. Married spouses can transfer assets to each other tax-free. But with domestic partners, assets valued above the $675,000 exemption can be hit with taxes of up to 55 percent. To transfer money without getting zapped, one partner can make annual tax-free gifts of up to $10,000 to the other. Also, trusts can be used to transfer stocks and real estate at a tax savings.

10. Opt for mediation or arbitration. If you break up and cannot resolve financial conflicts on your own, mediation or arbitration proceedings would be faster, simpler and less costly than litigation. -- Compiled by Laura T. Coffey.

Sources: Money magazine (http://www.money.com); Myvesta.org (http://www.myvesta.org); and Alternatives to Marriage Project (http://www.unmarried.org)

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