Whether you are moving in with your boyfriend to save money or to test the waters for a future marriage, take stock of these dos and don’ts before you reserve the moving truck. These are not meant to set up for a failed relationship, but to help should something, unfortunately, go wrong.
1. DO DETERMINE HOW YOU WILL DIVIDE EXPENSES
Paying bills can lead to significant disagreements in the best of marriages, and living together is no exception. Avoid disagreements by putting down on paper who will be responsible for what expenses from buying groceries to paying the electricity bill.
If you have decided to open a joint checking account to pay bills, BE CAREFUL! If you open a bank account in both of your names you may each individually withdraw money from this account. If one of the roommates deposits $2000 in the account, it is assumed both roommates own it, so either roommate can withdraw it. This can be a problem if you don’t know your roommate’s spending habits. The safest arrangement is to keep all financial accounts separate in order to make a transition (should it be needed) back to the single life a little smoother.
2. DON’T MAKE MAJOR PURCHASES TOGETHER
Do not take on major purchases with your roommate or co-sign for a debt of your partner if you don’t want to be held equally responsible for the debt should you later not be together anymore. Do not take out a loan for a car your partner will be driving or buy major appliances for a house your partner owns. You may end up having to continue to pay those bills long after you have broken up.
3. DON’T QUIT YOUR JOB
If moving in with your partner means you do not have to work, think twice before you quit your job. Unlike married couples, the boyfriend who may be supporting you has no obligation to continue to support you once the relationship has ended.
Many people are under the false assumption if a couple lives together for a certain number of years the couple enjoys the rights of a married couple when they split under the common law marriage doctrine. Yes, in a state recognizing common law marriage, a couple is considered legally married even if they do not have a marriage license. But, only a few states in the United States still recognize common law marriages, so no matter how long you have lived with someone or how intertwined your lives and finances are, you may not be able to collect support after a split.
4. DO GET IT IN WRITING
If you are serious about protecting your financial assets when you move in with a boyfriend, you should consider entering into a Cohabitation Agreement. It’s like a pre-nup but without the nup. A Cohabitation Agreement can include provisions on every aspect of living together from a formal written division of household expenses to who will take custody of pets if there is a break up. If one partner is helping to make the mortgage payments on a home owned by the other partner, the agreement may include a split in any increase in equity on the home. Or maybe the homeowner just wants to accept rent from the other partner and the agreement includes a clause indicating the renting partner gets no part of the house on a subsequent break up.
This type of signed, written agreement spells out a separation of property, assets and debts at the beginning of a roommate relationship and legally binds both of you to this agreement.
Another useful agreement for unmarried couples is a Co-tenancy Agreement. If you are planning on buying a home together, a Co-tenancy Agreement specifies how much each partner is contributing to the purchase, mortgage, property taxes and repairs. The agreement also includes how the equity in the home will be divided on the future sale of the property. No one wants to deal with these issues when there is a break up, so spelling out decisions ahead of time will minimize an already tense split.
5. DO THINK ABOUT THE LONG-TERM
Couples who have lived together for decades and consider their partner like a spouse, want their partner to make decisions for them if they should become incompetent or ill. Unfortunately, just because partners have lived together for years does not mean they have the legal right to make healthcare or financial decisions for the other unless a prior written arrangement has been made. Instead, an immediate family member may be given the authority to make these decisions.
Likewise, one partner has no rights to inherit from the other partner. If your partner dies without a will, you may end up as a co-owner of property with the partner’s relative.
So before you start picking out furniture together, ask your partner about their assets, debts and expenses and understand how they deal with money. Specify in writing how you will pay for living expenses and make sure wills, trusts and healthcare decisions are in order. Then call the moving truck!
Keller Smith is an attorney with The Keller Law Firm in Manhattan Beach, California; she can be reached at www.kellerlawfirm.com. She contributes a column once per month.