More and more, couples are choosing to live together before getting married, and some are forgoing marriage altogether. According to the Institute for Family Studies, 70% of couples live together prior to marriage. 1 And while no one wants to “jinx” the relationship by planning for a combined financial future, it’s important that partners are on the same page when it comes to finances. Here are five questions couples should ask each other when moving in.

1. How will we handle daily expenses?

Groceries. Dining out. Utilities such as internet, water and gas bills. It’s important to establish up front who pays for what when it comes to household costs. Many couples split bigger expenses like a mortgage and rent based on their salary ratio to keep things equitable, but there are also other things to discuss, like whether or not each member of the couple has access to each other’s finances. Say you want to invest in a home remodeling project or there is an unexpected need to purchase new appliances. Who covers that cost? Considering this ahead of time can help avoid the need for a rushed conversation and alleviate unforeseen tensions.

2. What happens to our shared assets?

If one of you is moving into the other’s home, chances are the residence is already in one partner’s name. Decide ahead of time what the two of you will do if the relationship dissolves. Who keeps the residence and who moves out? What happens to the furniture you bought? Have these conversations early so you’re on the same page. You may even want to keep a record of who purchased larger shared items, just in case.

3. What if someone loses their job?

Assuming both partners earn income at the time you move in together, it’s important to talk about what you’ll do if one partner can suddenly no longer work. Maybe there’s a layoff or an illness that forces one of you to take medical leave. Income made by individual partners is not considered communal property for unmarried couples, so there’s no legal grounds for equal division of income or assets. Discuss how finances will be shared in the event one of you can’t contribute a stable income. Couples can use a cohabitation agreement to lay out the details of these “what-if” scenarios so an agreed upon strategy can be followed if the unexpected happens.

4. Who makes decisions in a medical emergency?

No one likes to talk about worst case scenarios, but it’s important to have the conversation early. If a married partner is injured or falls seriously ill, their spouse can make medical decisions on their behalf. This doesn’t apply for unmarried couples. If you want your partner to have health care and/or financial power of attorney in the event you are unable to make decisions for yourself, you need to set up the proper legal agreements in advance. While this can be an uncomfortable topic to bridge, you will be happy to have the security that a sound plan provides, if you find yourself facing an unforeseen circumstance.

5. What about taxes?

There are many tax implications for unmarried couples to consider. For example, if two partners share a child but aren’t legally married, only one can claim the child as a dependent.2 Couples who aren’t married also don’t get to file their taxes jointly, even if they share a residence, which means they may miss out on a variety of deductions and credits. On the flip side, unmarried couples aren’t responsible for whatever outstanding tax debts their partner may incur.3 Work with a financial advisor to determine how you can best prepare your finances to take advantage of and be aware of the tax consequences of your relationship status.

Relationships need careful planning and attention to detail, as do personal finances. For those who choose to live together prior to marriage or forgo marriage altogether, it’s important to ensure finances are being protected through careful planning with a lawyer and financial adviser.

1- “What’s the Plan? Cohabitation, Engagement, and Divorce.” Institute of Family Studies. HYPERLINK “https://ifstudies.org/reports/whats-the-plan-cohabitation/2023/executive-summary” \hhttps://ifstudies.org/reports/whats-the-plan-cohabitation/2023/executive-summary

2- “Answers to Frequently Asked Questions for Registered Domestic Partners and Individuals in Civil Unions.” IRS.gov. HYPERLINK “https://www.irs.gov/newsroom/answers-to-frequently-asked-questions-for-registered-domestic-partners-and-individuals-in-civil-unions” \hhttps://www.irs.gov/newsroom/answers-to-frequently-asked-questions-for-registered-domestic-partners-and-individuals-in-civil-unions

3- “The Tax Ramifications of Tying the Knot.” IRS.gov HYPERLINK “https://www.taxpayeradvocate.irs.gov/news/tax-tips/tas-tax-tip-got-married-here-are-some-tax-ramifications-to-consider-and-actions-to-take-now/2024/08/” \hhttps://

Aaron Fritz, CFP, APMA is a financial adviser with Echelon Wealth Partners a private wealth advisory practice of Ameriprise Financial Services, LLC in Marshall, MN.  He specializes in fee-based financial planning and asset management strategies, he has been in practice for over 15 years. To contact him, ameripriseadvisors.com/aaron.fritz, 507-532-2210, 100 West College Drive, Floor – 1, Suite 103, Marshall MN.