In March 2012, 15.3 million heterosexual adults were living with a partner to whom they were not married. However, couples who are not married may still benefit from having a written agreement known as a no-nup that outlines what happens if one person falls ill or dies. It may also be a good idea to include in the agreement how household bills are split or how property will be split if the couple decides to end their relationship.
Such an agreement is important because couples who merely live together don’t have the same protections that married couples are afforded. Couples who are not married should also consider the tax implications of giving money to their partners. While spouses can transfer assets without paying tax, a couple living together is limited to $14,000 per year before gift taxes may be owed.
Furthermore, only spouses are entitled to benefits based on an individual’s work record. Even though a person can designate a partner as a beneficiary on a 401k plan or other retirement account, it may be easier for a spouse to use those funds. Finally, it may be a good idea to create a living will to ensure that a domestic partner has the power to make medical and other critical decisions according to an individual’s wishes.
For unmarried couples, it may be beneficial to create a written agreement that spells out their rights and responsibilities during and after the relationship if it ends. An attorney may be able to help a couple that is not married create those documents or help each partner designate the other as account beneficiaries if desired. Doing so may it easier to transfer assets or obtain other legal rights similar to what a married couple may be entitled to.