My partner and I are not getting married. This is how we manage our money

Marriage rates in the US have been declining since 2011with more adults choosing to build a life with a partner without marrying. Over the past 30 years, the number of unmarried adults in the United States living in a relationship has increased more than twice. Yet the laws governing our finances in the US are still skewed in favor of married couples.

My partner Stefan and I are part of this trend. Aged 41 and 38 respectively, Stefan and I have been living together for 14 years and have no intention of getting married. Over the years we’ve run into a system that doesn’t know what to do with our relationship status – like the time we had to provide a notarized affidavit confirming our relationship status to put it on record with my employer health insurance planwhile my married colleagues experienced the same obstacles.

In 2023 we bought our first house together. As time went by we had to think more and more how we manage money and asset ownership. Much of what is assumed for married couples is not so simple for unmarried partners, so we need to be intentional about our financial plans.

I spoke to several experts to get their advice on the best way for couples to manage money when they’re not married.

📋 Create a daily spending plan

The first thing every couple has to decide is whether to do it pool their finances or keep them separate. You can do both regardless of your marital status, but if you’re single, it’s easier for you to keep your finances completely separate if you want to.

Stefan and I consolidated some of our finances shortly after we moved in together. We share a bank account which we use to get paid and pay all our bills. We are too both are self-employed and we have business finances that we manage separately, allowing us to maintain some financial independence.

“You might not want to bundle it all together,” said Melody Evans, a financial advisor and retirement company CFP TIAA. “I recommend that couples maintain a separate bank account for each of them.”

Keeping all or some of your finances separate can protect you in the event the relationship ends. This is generally true for married couples as well, but unmarried couples don’t have the help of a divorce decree to divide assets if you separate. Separating ownership throughout the relationship can help you avoid legal headaches down the line.

💰 Talk about your debt

“The biggest challenge (for couples) is deciding how to manage shared finances without tying themselves too closely to other people’s debts,” said Ned Priestley, chief executive of the lender MQL.

As you consider how you will manage day-to-day expenses and household expenses together, talk openly about debt as well. If any of you bring loans or credit card debt in the household, how much will you do together? Do you prefer debts to remain individual obligations? How will this affect if and how you combine finances?

“For unmarried couples, clarity is key,” Priestley said. “Put everything on the table early and make agreements about who pays for what… Transparency is non-negotiable.”

🏠 Explore home ownership options

Depending on where you live, the assets you acquire while you are married, for example if you are buy a homecan automatically be co-owned, so the spouse will retain ownership of them if the other dies. The same logic doesn’t always apply if you’re not married, so pay attention to the contracts you sign when making a large purchase, such as a home.

My partner and I own our house as ‘joint tenants’, which means we each own a 50% share of the property and each of us has a right to inherit – ie if one of us dies, his share automatically goes transfer to the other. You can also set up your co-ownership of a property as ‘tenants in common’ where you can divide the interest in the property however you wish and there is no right of inheritance. In such a case, if someone dies, their interest in the property goes to their heirs.

Right of survivorship is a benefit of joint tenancy, but defining it can also be a challenge. For example, if the relationship ends before someone dies, joint tenancy can make it difficult to divide property. In a tenancy in common, one owner can force the sale of the property (to the other owner or to an outside buyer) to exit the relationship with an intact interest.

Alternatively, you can let one partner own a shared home while the other pays rent or otherwise contributes to the household. Just think about how you would handle the property if the homeowner died first. The ‘renting out’ partner will not automatically have a claim to the home, no matter how long they have lived there. They also will not build wealth through home equitywhich puts them at a disadvantage, especially if the relationship ends.

💵 Talk to an accountant before tax season

Married partners have the option to file taxes jointly. Filing taxes jointly gives the couple access to higher rates tax benefits and income limitsoften double or more than those of single filers, even if only one spouse earns income for the household.

For years I was the sole breadwinner in our household. Even though I was paying almost 100% of our expenses, I couldn’t claim my partner as a dependent for tax purposes (an option we lost after the Tax Cuts and Jobs Act of 2017). I had to file as single and we were penalized with lower deductions and income limits than married couples in the same situation.

This is less of an issue for unmarried couples if you both earn income and contribute equally to household expenses, but there are still some differences.

“Our tax code is much more generous to married couples than to singles,” Evans said. “An unmarried couple should be very aware of how their individual financial decisions will affect their individual tax forms.”

Other than getting married just for the tax breaks (not recommended!), there’s not much you can do to change your tax status. But talking to an accountant about your financial circumstances before April 15 can help you plan ahead for any tax relief you may be eligible to claim, especially if you have children in the household. You may find advantageous ways to separate household expenses and asset ownership, for example.

✅ Create a comprehensive estate plan

An estate plan allows you to determine how your assets will be managed after you die or are no longer able to make financial decisions. It is important to create an estate plan whether you are married, in a common-law partnership or single.

“Estate planning is a really powerful tool … to shape our future and legacy the way we want,” said Noel McEntee, co-founder of the inclusive online estate planning service Legacy.

An estate plan is more comprehensive than a will. Your estate plan may include a will, but it will also include plans to handle your affairs if you are alive but unable to manage them. A solid estate plan allows the couple to shape their financial future and legacy, McEntee said.

There are various estate planning documents you may choose to create, but McEntee most recommends one called a revocable living trust. This puts your assets — such as property, savings, retirement accounts and life insurance — into a trust with a trustee designated to oversee it. It also names beneficiaries, just as a will does, to inherit the contents of the trust.

Unlike a will, a trust does not become public and does not pass through probate after your death. This is particularly important to protect the wishes of unmarried partners whose relatives may try to usurp the surviving partner’s role in the inheritance.

Unmarried partners can also grant each other financial and medical powers of attorney to ensure they can make financial and health decisions for each other if needed. Without these designations, these powers could fall to a close relative who may not be aware of your wishes.

All couples should consult with estate planning attorneys to determine the best plan for them. Those of us without the legal protection of marriage should seek advice from a firm that incorporates our status and does not adhere to the traditional “husband” and “wife” terminology that is common in the industry.