Log In   ·   Become A Member

How Your Relationship Status May Affect Your Finances

Rocco A. Carriero

Whether you said "I do" at the altar, entered a common law marriage, are in a domestic partnership or cohabit with your significant other, the laws about your financial rights and obligations vary by state, and sometimes even by city.

To understand how your relationships status and living situation impacts your legal rights and obligations, consider consulting with reputable financial, legal and tax professionals in your area. With that in mind, here are some important things you should know:

 • Only select states recognize common-law marriage. One of the most common myths about common-law marriage is that if you live with someone for a certain length of time— often believed to be seven years—you are considered married under the law. This is not true everywhere in the U.S. In the states that do allow common-law marriage the circumstances vary, as do the financial implications. If you think you may be eligible to enter a common-law marriage, do some research to see if it applies to you in your state and what the implications may be.

 • Since most states don't recognize the rights of unmarried couples that cohabit, many couples enter cohabitation agreements. Designed to protect couples from an unfair distribution of assets and property, these agreements describe individual financial and household responsibilities and assign debt to one or both individuals. They are also becoming increasingly popular among cohabitating elderly couples who want to define their financial responsibilities for their partner's medical care and other expenses.

 • If you live in a common-law marriage state and don't want to be legally married, document your intentions. Meet with your lawyer to create a written record of your desire to remain independent from each other. If you don't take this step and your living situation meets your state requirements for common-law marriage, you are considered legally married in every way. For example, if your relationship ends, you are required to get a divorce. Or if one of you dies, your assets automatically pass to the other.

 • Domestic partnerships may occur between same-sex or opposite sex couples. Again, the definitions and rights vary by state or even by cities within a state. Even if your state doesn't recognize domestic partnerships, your city may have ordinances that allow domestic partners who meet certain criteria the opportunity to secure voluntary employer benefits and a limited form of legal recognition to protect their families.

Once you become familiar with your legal rights and obligations as an unmarried couple, you can take steps to financially protect yourself—and your partner. Start by discussing:

 • Whether your assets will be shared or separate: Couples who live together face financial vulnerabilities that married couples do not when it comes to shared checking accounts, credits cards and other investments. Often it's easiest—and smartest—to keep your assets separate and split bills and other joint expenses down the middle. But regardless of how you choose to manage your finances, documenting your decisions with a written legal agreement is the best way to protect yourself—and your credit score - if the relationship doesn't stand the test of time.

 • Who will pay for property purchased together: Before you buy a home, decide if you will be joint tenants in which ownership is equally shared or tenants in common in which you each have a distinct percentage of ownership. Unlike joint tenancy, if your co-owner dies, you don't have rights to their share of the property. Instead, their share becomes part of their estate and their will or state intestacy laws will determine how it's distributed. Also consider who owns what when making other big purchases together like a vehicle or small business.

 • Who will inherit assets in the event of death: As an unmarried couple, your assets don't automatically pass to your partner in the event of your death. If you have assets you want your partner to inherit, properly document your intentions in writing to help ensure your wishes are carried out. If you don't, state and federal laws will dictate who gets what— and typically it's your next of kin or your estate. Also, if your significant other is the desired recipient of your retirement funds and life insurance policies, be sure to list him or her as the beneficiary. Keep in mind that your beneficiary designations override the directives of your will, so it's critical to keep them current.

Again, since the legalities governing marriage, common-law marriage, cohabitating and domestic partnerships are complex and vary by state, please consult reputable legal, tax and financial professionals in your area for more information on how to protect yourself, your significant other and your assets.



Rocco is a Private Wealth Advisor with Ameriprise Financial Services, Inc. in Southampton, NY. He specializes in fee-based financial planning and asset management strategies and has been in practice for over 13 years. Advisors is licensed/registered to do business with U.S. residents only in the states of NY, NJ, TX, MA, PA, NC, NH, UT, NV, CA, NM, WA, VT, MS, MD, RI, FL, MO, SC, GA, MN, CT, AZ. Ameriprise Financial Services Inc., and its representatives do not provide tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. www.roccocarriero.com


Be the first to comment on this article. (Just fill out the form below)
 

Submit Your Comment

Please note, you are not currently logged in. Your comment will be submitted as a guest.
To submit your comment as a member, please click here.
Your Name:
Location:*
Comments:*
* Comments will be reviewed and posted in a timely fashion
* All fields are required
Question:*
Please type the word 'water'
(For spam prevention, thanks)
 
 
 
http://www.hamptons.com/gallery/ads/2143.gif
http://www.hamptons.com/gallery/ads/1824.gif
Bridgehampton National Bank
For over 100 years Bridgehampton National Bank has been the East End's hometown bank. Many success stories...one bank, BNB!

Advertise on Hamptons.com - Have your business be seen by over 2 million viewers including NEW searches
Hamptons.com- Our exclusive online magazine has 2.6 million Page Views YTD for 2015. Contact us to join our elite group of clients that benefit from having a presence on the Hamptons award winning publication www.Hamptons.com

Hamptons Carpet One Floor & Home
We pay less,and so do you.With over 1,000 stores in our buying group, we can get the lowest prices from the best flooring manufacturers — and pass the savings on to you.Visit our other locations: Hamptons Carpet One Floor & Home, 675 North Sea Road,Southampton, NY 11968

CP Complete- Landscape Design & Construction
Paul Guillo And Chris Hall Two Of The Most Respected Names In The Community Together, they are partners in CP Complete. They bring their years of experience and integrity to creating and renovating luxury backyards.

D+J Concepts is known for a high-end cutting edge approach to design.
D+J Concepts is known for a high-end cutting edge approach to design with a balance between functionality and imagination. We skillfully and tastefully transform ordinary spaces into classic modern styles, which are understated, and luxe. We’re known for our modern transitional style incorporating antiques and modern elements for an unexpected edge.

Hamptons luxury real estate specialist for 33 years, Andrea Ackerman offers outstanding expertise in the field.
Hamptons luxury real estate specialist for 33 years, Andrea Ackerman offers outstanding expertise in the field. Trusted, experienced and successful, Andrea has solidified herself as the go-to broker of the Hamptons and a wholehearted advocate for her clients. A pioneer in the real estate industry on the East End of Long Island, she is driven by her passion for the business. Andrea is based in the Bridgehampton office of Brown Harris Stevens as a licensed real estate associate broker and consultant. Formerly, a principal partner and Senior Director at Brown Harris Stevens, Andrea now assists in developing their corporate strategy for the Hamptons region, advising other brokers and sales associates, as well as being one of the top producers and listors.