These days, there are lots of couples who live together even though they aren’t married. They might be planning on organizing a wedding later down the line, or perhaps they just don’t fancy getting married anytime soon. When you cohabit, you can enjoy all the benefits of being married but without the expense of a wedding! But you must protect your finances!
However, you don’t exactly have all the same benefits that married couples get. For instance, if you do break up, you don’t have any legal protection and your finances aren’t protected either. Thankfully, there are ways you should protect your finances as a pair while you cohabit.
Protect Your Finances When Cohabiting
It’s really important that you have protected your home in all the necessary insurance. For instance, you should get contents insurance so that all your belongings are covered in the event of a fire or burglary. Advice from Stewart J Guss is that you should also get liability insurance as well. That way, no one can sue you for injuring themselves on your property. Don’t forget building insurance either as this will cover the cost of expensive maintenance and repairs.
Write A Last Will And Testament
In the event that your partner passes away unexpectedly, you will have no legal claim to their inheritance as you are not married. This will also be the case for your partner if you were to suddenly die. One way to get around this is to write your last will and testament so that it is clear who you want your estate to pass to after you have gone. Another option is for you to prepare a transfer on death deed to secure your property while you are still alive and be able to transfer it to the rightful beneficiary when the owner passed away. This a great way to protect your finances.
Draw Up A Cohabiting Agreement
You might want to write up a cohabiting agreement that you and your partner can sign. This details how all of your shared assets should be divided between the two of you if you split up. This document should also explain who will stay in the house after the split. But this kind of agreement isn’t just necessary for separations. It can also be used to prevent any disputes as you can outline how bills and other financial responsibilities will be split between the two of you.
Keep Your Debt Separate
It is never a good idea to take on the responsibility of someone else’s debt, no matter how long you have been together. You should also look after your own. Your partner should take care of theirs. If you do mix your debt, then you could find your own credit report is badly damaged and you might no longer be eligible for loans and credit cards, even if you have behaved responsibly with debt in the past.
Did you know that there are a lot of tax breaks available for married couples? In fact, getting married could save you quite a bit in tax each year. So, maybe you could afford that big wedding after all? After all, you will find it easier to save when you don’t have to pay so much tax afterward!
Hopefully, this blog post makes the financial side of cohabiting easier! Are you cohabiting with someone and are your finances protected? Tell me about it in the comments below.