Whether a couple is married or unmarried, there are invariably many money issues for them to consider -- and some valuable financial moves to make. Here are some tips for those in the not-married camp.
Selena Maranjian: Let's start with financial issues concerning your daily life. A bad way to manage your joint and separate finances is to just wing it. Do so, and one or both of you can end up feeling resentful because of various irritations or an overall sense of unfairness -- such as if one party is spending much more than the other thinks is best.
Instead, talk things out and have a plan. Discuss which income and assets are joint and which, if any, are separately held. Figure out how much money is coming into the household and how you both want it to be spent. Come up with a budget and a plan for sticking to it. (A budget doesn't have to be strict and punishing. You can budget for entertainment, travel, and dining out -- as long as you can afford it.) Be sure to plan for retirement savings and any other savings goal, such as a down payment on a house or college expenses, and above all, live below your means. If one partner is saddled with substantial debt (or if both are), it should be a priority to get that paid off.
If you don't have a joint bank account, you might want to open one. You can then both contribute to it in whatever proportion you agree, and then joint expenses -- electric bills, rent, dinners out, hotel stays, etc. -- can be paid from that one account. You might split everything 50-50, but if one earns much more than the other, or there are other special considerations, a 60-40 split, or something else, might seem best. All long-term couples need to have some money talks and make some joint decisions.
Dan Caplinger: Unmarried couples lack some of the automatic protections married couples have, especially when it comes to estate planning. Most laws give a spouse the right to inherit as a default, even if you never get around to writing a will, but an unmarried partner's rights are often almost nonexistent. That makes it critical to set up your finances deliberately if you want to leave money to a partner while you're not married.
A couple of strategies are available to achieve that goal. First, holding property in joint tenancy accounts with rights of survivorship will serve to transfer ownership directly to the surviving partner after your death without the need for a probate proceeding, and without being subject to a will or to the local laws governing intestate succession. Beneficiary designations on retirement accounts and life insurance policies can serve the same purpose.
At the same time, during your lifetime, making sure to give each other powers of attorney to make not only financial decisions, but also healthcare choices on each other's behalf is often what each member of an unmarried couple wants, and having documentation prepared is essential to give financial institutions and caregivers the peace of mind to know they're abiding by your wishes. Use these two strategies, and you'll come a lot closer to the rights married spouses have.
Jason Hall: Dan covers the critical topic of estate planning, but there's an important first step that you and your partner need to take before you can really tackle it: Talk about the issue.
The cold reality is, too many people just make assumptions about what their partner would want, or outright ignore anything that may be hard to confront, such as the potential death or illness of a loved one. Making assumptions (that may be false) or simply ignoring something that may be uncomfortable to think about will only make it harder to deal with if the worst does come to pass. Without having had some tough conversations, you might find yourself unsure of what to do if your partner is temporarily or permanently incapacitated, or, worse -- dies. Do you know if your partner would want to be kept alive at all costs, or at what point they would not want to live? Do you know who they want their assets to go to if they die? If they prefer cremation or burial? A nice casket or a simple wooden one? Would they even want a memorial service?
Not planning or informing each other of your wishes isn't going to keep anyone alive any longer. But it will make it much easier for you or your partner to move forward when bad things happen.