According to the U.S. Census Bureau, more and more couples choose to stay unmarried. A 2004 study done by the Government Accountability Office reported that married couples were protected by more than 1,100 federal laws. Unmarried couples have no such luck. 

Married couples enjoy things like survivor benefits for pensions, Social Security, family health insurance coverage and continued coverage under COBRA, the right to ask for spousal support in divorce, estate and income tax benefits like the ability to transfer property tax-free to their spouse, and many more benefits. 

So where does that leave two people who simply decide to live together, regardless their reasons? With careful planning you may be able to replicate some of the same protections of the laws available to married couples. 

I’m not saying it will be easy but it you put these in place at the onset of what you feel to be a promising, long-term relationship, you can spare yourself a major headache and heartache down the road. 

So here are some financial tips for unmarried couples to prevent future financial blow-ups. 

1)   If you are planning on buying a house together, that’s a big deal. You should consult an attorney about how to title property in both names, such as jointly or as “tenants in common”. Both have different tax and estate consequences. 

Both partners should have a special power of attorney. In case one partner becomes disabled, the other will have the legal authority to manage the property. 

2)   Have adequate amounts of insurance in place. 

Since unmarried couples do not have the Social Security survivor benefits available to them, life insurance can help meet this need. 

Most employers now offer health insurance benefits to domestic partners. Despite the fact that the additional coverage may be considered a taxable income, take advantage of this. 

3)   Plan your estate. That is because unmarried couples don’t have the same benefit of an unlimited transfer of assets to their surviving loved one when one partner dies. So make sure to have all legal documents properly written up and up to date. Those include will or trust, living will and power of attorney.  

With a will and a correct listing of a beneficiary on your retirement accounts and insurance policies, your money will go to the right hands upon your death.  Without one, the state decides who should get your money, even your “money hungry” relatives.

Power of attorney for health care is especially important if you want to have a say in medical decisions for your partner should he or she be hospitalized. 

Regardless whether you marry or decide to just live together, you may occasionally struggle with the same decisions. You have to decide whether to blend your assets or keep them separate, how to protect your assets during tough times and how to structure your estate plan to be fair to your new and established family.

To bring transparency and clarity to your new relationship, you may consider getting a “cohabitation agreement” drawn up to spell out how finances will be handled and even how assets will be divided in case your partnership fails. 

Regardless whether you decide to pool your money together or not, the above tips are a must to give you piece of mind and allow you to focus on your relationship. 

Mystified by money and want to improve your financial effectiveness? Denisa Tova CFP®, CDFA, MBA is a Colorado Springs-based Certified Financial Planner and a Certified Divorce Financial Analyst. Contact her at DenisaTova.com or email denisa.tova@gazette.com.