Unmarried couples face different standards in finance

Wedding rings

Couples who decide to forgo the wedding rings face some different financial challenges. Image from Wikimedia Commons.

Unmarried couples are becoming more common, as fewer heterosexual couples elect to become married and same sex couples aren’t allowed in many areas. Moral arguments aside, a relationship that avoids convention also has some different financial risk built into it. There are also some benefits to it as well.


Omitted or denial of vows leads to different challenges

Couples that elect not to get married or couples that are not legally permitted to get married face some different challenges when it comes to the matter of personal finance, and there are more of them every year. The Census Bureau, according to Business Week, recorded 7.5 million heterosexual couples and 620,000 same sex couples cohabitating in 2010, an increase of 14 percent since 2009. The American Academy of Matrimonial Lawyers observed a 48 percent increase in the number of lawsuits when unmarried couples break up, given the legal ambiguity of untangling the family finances. Legal marriage, on the other hand, makes the issue far less cloudy as those rights are easier to determine legally.

Liability and access

The two issues for unmarried couples are those of liability and access. For instance, if a person cohabiting with a partner defaults on some bad credit loans, the person who took out the loans is the one responsible unless the other person was a cosigner. On the other hand, when it comes to assets like cars or houses, the owner is the one with the name on the title regardless of who was making payments. Medical decisions also go to the next of kin rather than a person’s partner. In essence, the law is firmly set on the side of the married and unmarried couples have fewer legal rights. However, there are precautions that can be taken.

Cohabitation agreements

Marriage is, at the heart of the institution, a contract above all other things. An unmarried couple can form just such a contract, called a cohabitation agreement. Cohabitation agreements can establish the allocation of assets in case the relationship disintegrates, and about 39 percent of the American Academy of Matrimonial Lawyers noticed more cohabitation agreements in 2010, so people are catching on, according to USA Today. An agreement should be vetted by an attorney to make sure it will hold up in court so one party isn’t left holding the bag for the other’s installment loans that they haven’t made payments on. It also helps to have a paper trail of the relationship, according to CNBC, such as joint financial statements and so forth in case proof of the relationship needs to be furnished. If a person wants to grant their partner rights of medical access, they can be designated their health care proxy in case of emergencies.


USA Today


Business Week

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