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couples living together before marriage
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A growing number of couples are choosing to merge their lives in every way that married couples do, but without actually getting married.

The most recent Census survey say the percentage of cohabitating unmarried couples has jumped from just 1% in the 1960s to 12% in 2011. Besides moving in together, these pairs are joining bank accounts and having children sans matrimony.

While marriage offers some legal and financial protections that shacking up together together doesn't, proactive planning can help unmarried couples mitigate some possible challenges. A few moves to consider if you and your partner aren't looking to put a ring on it:

Craft a Relationship Agreement...

In a new survey by UGallery, 83% of women polled said they find living with a significant other riddled with challenges. Dividing chores and sharing expenses were the top concerns, ahead of sharing a bathroom and splitting TV time.

Take that as a lesson, and get some things in writing to make sure you’re both on the same page in terms of your expectations—financial and otherwise—in the relationship. For example: How you will manage and pay for certain expenses such as housing, food, childcare and utilities? Who owns what? Are you each responsible for your own credit cards?

You can make one of these agreements inexpensively at one of the DIY legal sites like Rocket Lawyer or LegalZoom.

...And a No-Nup

Folded into that relationship agreement—or created separately—should be some agreed-upon terms in the event of a breakup so that you can split amicably and avoid court.

Married couples to-be can get prenuptial agreements. Experts advise unmarried people to execute a similar legal document that explains how assets will be divided if things go south. “For those who eschew the wedding industrial complex altogether, I advise a no-nup,” says Sarah Wright, board chair at Unmarried Equality, an advocacy group for unmarried people. “The no-nup…usually addresses property distribution, financial support, and debt planning if the relationship ends."

Decide Who Owns the House

Buying a home together? Unmarried couples want to pay very close attention to how they set up a joint property.

Putting it in one person's name means that the owner can sell the home at anytime without consideration for the other's desires and without sharing the proceeds—even if the silent partner helped with the downpayment and mortgage payments. Also, if the titleholder passes away, the house won't automatically pass to the partner without it being willed that way.

On the other hand, “If one partner funds the purchase, but both partners are on the title, the proceeds [of any sale down the road] will be given to the record owners of the property," says Jon Robertson, a certified financial planner with Abacus Planning Group in Columbia, SC. So if you know you’re the only one paying the mortgage, will you be okay with having your partner on the deed as an equal owner?

Another thing few couples remember to hash out: Who will pay for and claim certain tax-deductible expenses like mortgage interest and property taxes? Since you can’t file taxes jointly, only one of you can. Because it will result in more savings, “it might make sense for the partner in the higher tax bracket to pay expenses that are deductible,” says Robertson.

Make a Co-Parenting Plan

If you plan to raise a family together, have an agreement in place that “supports the rights and responsibilities inherent to parental roles and relationships,” says Wright.

Married couples are automatically the lawful parents of their kids. With children born to unmarried couples (about 22% of the baby population), “there’s no presumption of paternity.”

In other words, a dad needs to take legal steps to be recognized as the rightful father. Having a court-approved parenting agreement establishes legal guardianship of your children and provides your kids with similar beneficiary entitlements as children born “in wedlock,” such as Social Security survivorship benefits.

“This type of agreement should also detail each parent’s specific involvement and commitment to the child or children,” says Wright. You can check out more books and resources related to this on Unmarried Equality's web site.

Establish an Estate Plan

Unmarried couples have a greater need for estate planning documents, says Robertson.

If a couple is married and one spouse dies without a will, the surviving spouse will most likely have some protection from their state’s intestacy laws. “If you aren’t married, the rules of intestacy will not apply and you will inherit no money unless your partner has a will directing assets to you,” he says.

Not only that, without a health care power of attorney stated in your estate plan it’s not likely that your partner can make medical decisions on your behalf should the need arise.

There are several free templates online that can help you construct a simple will and overall estate plan, but if your situation is complex—e.g. you own a business, have significant assets or need to financially protect children from a previous relationship—it’s worth it to speak with an estate-planning attorney.

Farnoosh Torabi is a contributing editor at Money Magazine and the author of the best selling new book When She Makes More: 10 Rules for Breadwinning Women. Her new podcast So Money features intimate interviews with leading entrepreneurs, authors and influencers. Visit SoMoneyPodcast.com to listen to the show’s inaugural interviews with Tony Robbins, James Altucher and Jean Chatzky.

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