Why? Federal tax law specifically excludes employee benefits received by spouses from taxation, but Uncle Sam doesn’t recognize domestic partners. In other words, if John covers Jane as a domestic partner under his employer-sponsored health plan, John could be taxed by Uncle Sam for any benefits extended to Jane. But if you’re providing your domestic partner with health care benefits, the portion applying to them could be taxable to you. When you’re married, the IRS doesn’t tax your health benefits, nor does it tax the benefits your spouse receives under your plan. While it may not matter to your employer if you’re hitched, it does matter to the IRS. Many big companies and government agencies will extend health insurance coverage to unmarried couples. So talking to an estate attorney is a good idea. Something else to consider: If you’re rich - say, with assets exceeding $5 million - you could have estate tax issues that wealthy married people don’t. If you don’t relish the idea of a parent, sibling or some distant uncle inheriting everything, get a will. If you’re unmarried and die without a will, your estate still goes to your next of kin - but that’s not your partner. If you’re married and die without a will, your estate will eventually go to your spouse because, according to the law, your spouse is your next of kin. However, if there’s no paper, as far as the law is concerned, you’re strangers even if you’ve shared a bed for 20 years. But even without a will, the law won’t leave a surviving spouse high and dry, thanks to another piece of paper - a marriage certificate.

It’s bad enough when married couples don’t have a will, especially when it’s so easy to do. Have a lawyer look it over, then have it notarized or recorded. So, if you’re thinking of buying a house together - or taking on the responsibilities of someone who already owns a home - go into the transaction with your eyes open. Absent a legal document to the contrary, it’s John’s house and his equity. Is Jane then entitled to any of the equity she’s creating by paying down John’s mortgage? No. Because she makes more than John, Jane proceeds to make the monthly mortgage payments.

If both parties are on the deed as owners, but only one is on the mortgage, the one responsible for the mortgage remains responsible, even if that person has moved out and moved on.Īnother common scenario: John already owns a house, then Jane moves in. If you both apply for the mortgage, you’re both responsible for paying it - even after you break up. The difference is that with right of survivorship, your interest in the property automatically transfers to the other owner when you die. The two basic ways of sharing title with other people are joint tenancy with right of survivorship and tenancy in common. So, make sure both parties are named on the deed. It doesn’t matter what verbal agreements were made or who paid the mortgage.

Keep in mind what I said above: The house belongs to the person whose name appears on the legally recorded deed. This could be a great move, but be aware of potential problems. Unmarried couples may decide not only to move in together but also to buy their own place. Here are some important things to know before you decide to live with a significant other. It’s essential to remember that when it comes to money, the law doesn’t fully recognize relationships not officially documented on paper. But living together as you get older (and hopefully wealthier) can pose additional challenges. Many young couples who break up have faced the issue of “this is yours, that’s mine” - from books and music to pets and furniture. That’s a mistake, because cohabitating couples are not afforded all of the same protections and advantages that married couples receive. However, I suspect that many unmarried couples haven’t considered the financial ramifications of living together. Watch the video of ‘Living Together but Not Married? 5 Important Things to Know’ on .Īs marriage rates have fallen, cohabitation relationships have increased.

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