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Life can get complicated sometimes. Marriage isn’t always a viable choice for a variety of people in committed relationships. For instance, many same-sex couples live in states where marriage is illegal. Other heterosexual couples may prefer not to marry if they’ve already been down that road before.

Interestingly, census data shows the number of live-in couples in the U.S. rose 25 percent from 2000 to 2010. If you are one of the many in this day and age that has chosen to remain unmarried, you should be aware there are still several financial planning strategies that can protect both you and your significant other during this lifetime and beyond.

Because the issues involved in being committed, but unmarried are complex, it’s important to examine some of the potential situations you could face. Following are some of the benefits and drawbacks to being an unmarried couple, along with tips for how to conquer financial and estate planning hurdles:

1. Be aware if your significant other dies, you won’t be financially responsible for his or her debt.  

If you choose not to combine assets, each of you will be responsible for your own debt. If credit card statements keep rolling in and your significant other has no estate to pay them off, you simply notify creditors of his or her passing. You’re not financially obligated for your significant other unless you are legally married.

2. Draw up an estate plan and will with your significant other, including health care directives and financial power of attorney documents.

Unmarried people need to clearly clarify in an estate plan and/or will who will speak on their behalf in event of a medical or financial emergency. This is particularly true if there are children involved in order to avoid custody and care disputes.

If you should become incapacitated, you’ll need two documents: a durable power of attorney and an advance care directive so your significant other can manage your financial and health care decisions. Otherwise, the state may designate someone else in your family to make those choices. Without those documents, one partner can even be denied the right to see the other in the hospital.

Estate planning documents can also help sort out a variety of other sticky financial issues for people that have previously been married. Example: should certain assets be left to your current significant other or children from an earlier relationship?

Without a will, your assets can pass, by default, to a parent, sibling or other blood family member — not your partner.

Most people wouldn’t want their children to be disinherited because of a new relationship. But leaving your whole estate to your kids could also cause some problems for your surviving partner, like suddenly becoming responsible for a mortgage he or she can’t afford. Drawing up proper documents that spell out your final wishes can help your loved ones avoid confusion, disputes and financial hardships after you’re gone.

One way to make sure assets pass directly from you to your significant other is to name each other as beneficiaries on all pensions, retirement accounts and insurance policies. Some retirement and pension accounts have different rules about naming non-family beneficiaries, however, so check with a financial professional first.

3. Make sure your property is properly titled.

It sounds crazy, but if you are living in a house owned by your significant other and that partner dies, his or her family can legally evict you. Ensuring a partner inherits the house can be difficult if it is not titled correctly.

In order to avoid this issue, make sure to title your home in both of your names and add a layer of protection through a “joint tenancy with right of survivorship.” That document will keep the property out of a lengthy legal process called probate if one of you dies, But the designation can have tax implications, so check with your accountant.

If only one partner has put in all the money toward the house, write the other partner in the will. You can always change it later if needed. Another strategy is to create a revocable living trust or revocable transfer-on-death deed that includes your partner and will ward off challenges to your estate.

4. Realize remaining unmarried is the only way to ensure one partner’s assets won’t be depleted to cover the other partner’s medical expenses. 

Depending on your state of residence, if you’re married and your spouse ends up needing costly long-term care, state health officials will look to your assets to cover the bills. Although couples can attempt a series of legal strategies to protect assets for the healthy spouse, none are 100% effective.

In that respect, unmarried couples actually have a significant advantage.

The bottom line: Whether you choose to stay single or get married, it’s important to understand the risks and rewards of both, and then find your own way. The right solution for you isn’t necessary the correct choice for someone else.


Author Ron L. Brown, CFP®

Ron is a CERTIFIED FINANCIAL PLANNER™ and President of R.L. Brown Wealth Management. He specializes in retirement, estate, and business planning for professionals and entrepreneurs. Ron assists his clients with creating a financial plan to ensure they are able to live their ideal lifestyle during retirement and leave a strong legacy for their family. Ron has been featured in The Wall Street Journal, US News, Yahoo Finance, Investopedia, and numerous other high profile financial publications.

More posts by Ron L. Brown, CFP®
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