How Unmarried Couples Can Protect Their Finances
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I was riding a hour at, like twelve years old. We had a right. I have to go out into circles. I got dizzy. I ready to a tree.

Welcome back to the rich girl round up weekly discussion of the money with kd show. I'm kd gi to and and monday's. My executive producer, hanna, and I used this segment to talk through listener questions, money stories and more more because I want the freedom to shoehorn whatever the hell I want into this segment.

So we will do that right after a quick break. You want a home soon, but you also want kids someday. So how do you baLance both financial priorities? M, and tom worked sure how much they could afford to buy in new york city, given that child care was gonna a major expense one day.

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I receive compensation and have an incentive to promote domain money. See important enclosures A D M M Y doc flash X. Before we get into IT, this weeks upcoming main episode is about the the type of insurance that we think all higher nis should probably consider.

It's not whole life. You already know that, but it's also probably something that you haven't really given much thought to right onto the round of hanun. What is our question today though?

I had a teaser. I wonder what I could be. This west question came from micro casey. It's a bit long, so bear with me, SHE said, quote, within one year old and another little one on the way. congratulations.

Uh, we rained in our spending and are prepared to accommodate an additional eighteen hundred dollars in monthly daycare senses for thing to starting next spring way. U. S.

I am genuinely relieved to share .

that through my intimate new budgeting process completed with your financial wisdom. I have a holing plan to pay down most of our deaths in the next three years while supporting two kids and take care. I feel empowering and excited for our families future.

Nothing sure that's something beautiful, they said. I ve been listening to old episodes, including those on financial considerations for a single folks versus married couples. My part are together, but unmarried.

I love in the pieces, but haven't gone through a break up after a nine year relationship and helping my parents through a divorce after thirty years of marriage. They safe to say i'm a bit cheated, but this puts us in a great area. What considerations are there were navigating finances in our situation? Well, it's not the norm.

I do see more and more couples opting to start families and either delaying or entirely for going officially tying the not I managed the household budget and all bills and most expand atures. And he gives me a big chunk of each paychecks to work with I about the condo we live in before we got together. And he boots the mortgage with me.

Legally, we are still two separate single people and for twenty twenty three taxes, I claimed her son and my partner filed as a separate individual. And listening to one of your episodes discuss the importance of pro n ups and to cover what happens if someone stops working post marriage IT occurred to me that we don't have any as such uh, arrangements or protections. We both love our careers and can't imagine not working.

But of course life happens. And similarly, while I hope you go the distance and less for harmony, relationships can take a turn. I want to ensure that neither bus is in a position to get screwed over. Amazing long question. But I feel like I gave us a lot of information to work with and something specifically that we don't or haven't often covered in the show, which is like cohabitation and also cohabitation with children.

You know what funny is? I think I keep doing this too. I think it's cohabitation. But doesn't that sound wrong? Doesn't sound to be cohabitation.

yeah. This isn't the word cohabitation. yeah.

But every time I tried to look up cohabitation, IT was like, do you mean cohabitation was like knowledge? I mean habitation. Anyway.

i'm going to keep saying .

that both are gona fly today. Let's go. So i'm going to adjust my typical disclaim er to say i'm not a lawyer but I do want to give you the general lay of the land and I will tell you which type of lawyer you should .

probably tell you this like that he said i'm not a lawyer and i'm going to do this but that puts me under the bus .

he says he is direct all legal liability to hanna.

Neither rest are certified professionals. Please contact a lawyer. continue.

okay. So I find the idea of long term cohabitation intriguing. I think IT is also worth noting that this is way more common in other countries than IT is in the united states. The the united states has far higher rates of marriage, then pretty much all of our our nations, but IT also has higher rates of child poverty.

So I I want to call that out explicit because I think there is typically like a moral panic argument that comes in here where people be like you need to get married for the stability of your children. And I think in the us, we kind of associate unmarried people who have children with instability. Is responsibility the that like? But really, I guess my point is like it's a financial thing.

The fact that we have in, I looked up ten per nations, every single one of them, lower rates of marriage, lower rates of child poverty. So I would just throw that out there. That is important that we do not conflict or feed into the moral panic of like every person that has kids needs to be married to the person that they have kids with. The financial stability part and the financial responsibility part are separate considerations here. So I think that's what we want to dig into today.

Yeah, I actually I fell down a rabid hall on the history of cohabiting place that right um and one thing than that I saw that was interesting with the actual study that said that couples that cohabit have IT I don't before this is gonna a thing .

the whole episode are just going to keep saying at .

either way is that live together before marriage actually have a higher rate of divorce. Then couples who stay unmarried and live together, which I thought was so fascinating.

So wait, let me make sure understanding if you live together before you get married and then you get married, you have a higher rate of like splitting up yeah, obviously you going to have a higher rate of divorce because cohabiting people can get divorce, but like you have a higher rate of split ting up, then people who just go have at the entire time.

I read IT like five times because I was like, surely they put a type, they are missing a word. But no, I checked the source that he came out. I was so fascinating.

And I think it's because people who tend to go habit in their eventually plans for marriages that they end up sliding into IT such that IT wasn't something they like intentionally meant to do or that IT was like a financial decision of, oh, it's just cheaper for me to live together but it's not really like the match mate and having that they think IT should be. But there are kind of stocks. Then people who are marriages are also scared divorce.

But anyway, fascinating.

Yeah, was really interesting because because disillusion and marriage is actually pretty common. So I found a study from a pew research center analysis that said fifty nine percent of adults between eighteen and forty four have lived with the romantic partner, compared digest fifty who have never been married.

And I feel like that probably increased in the pandey, at least anecdotally, from what I heard were a lot of people that I knew were just like we couldn't go anywhere, anywhere. We had have been a little part of that is will be together in that pod. basically.

I just think that this is a more common trend that we're seeing that people are choosing to go down this. And I was reading actually about the history of this as well from the nineteen twenty eight centuries, because interaction and gay marriage more legal, that people actually go have ted to begin with. And IT just wasn't track in the same way. And that in the one thousand nine hundred and seventies, when women had more access to birth control and legalize abortion in and meant women could pursue hair education, they could pursue those hired incomes, and so they could kind of choose what they .

wanted to do for themselves. Like, I have to get married .

because I need money. Yeah have someone for resources or like from my child. So anyway, I say all of this to say that I think i'm really impressed with the thoughtfulness Cathy's question, and I think that is something that a lot of couples are expLoring as well. Like I don't think that that's the neck chAmber shes, and I think we're hearing a lot to yeah.

I agree. I am also impressed with just the consideration because you're point about slighting. I do think that is just one of those things that we do because we feel like we're supposed to words just the the next step.

And so I give her a lot of credit for being extremely intentional about these decisions that she's making and not allowing pressure from society or the latest moral panic to make her feel as though that that's what SHE needs to do. This is also such an interesting reverse, you know, of the situation that we usually discuss on this show, which is how married people can protect themselves and understand how marriage changes their financial situation. Because obviously, in this case, you're really protecting yourself from the opposite, which is that the upsides, financially and legally, of you no longer have access to, you kind of have to create them in a different way for yourself.

So I guess if someone's married IT, obviously there's a lot of legal defaults that are just defauts to your partner. Yeah so what happens to someone that's cohabiting with someone? Like how would someone protect themselves?

So I would say the primary difference before I get into how to protect yourself, who to talk to, I think the primary difference that I can see and the thing that surprised me the most, Frankly, about the difference between these two situations, obviously, they're going to be a tone of details, some of which are gonna vary dramatically by state.

But the biggest shift to me with regard to marriage is that you, because you are illegally considered one entity, financially speaking, any income either one of you earn becomes marital property. Any assets you buy after you get married, or technically marital property, unless otherwise prescribed in a prune unctuous agreement with like specific car bouts. And even then, I think that can be kind of hard to enforce later like there are you kind of have to have good reasons for that.

And so we know that cleanups also allow you to write terms about spousal support if one parent becomes a full time care taker. This is kind of what cases to in her question, which is the primary reason that I find them to be valuable, especially for women who are statistically more likely to find themselves in that position. But when you're cohabiting, none of that really happens.

Your income is legally yours. Their income is legally there's your assets remain separate. And if you break up, you aren't, in my understanding, going to go through the process of splitting things up.

However, there is something called a cohabitation agreement. And in IT, I believe you can specify terms. It's a little bit like a pinups for people who are not married.

You can specify terms about partner support in the same way that if one person becomes a full time caretaker to the child and leave the workforce for extended period of time, you can outline the amount that they would receive if you were to split up. And you know you're relying on this person's income, the duration, the conditions of receiving the income and more. The other thing that I think is quite different from where i'm sitting is, is a treatment of debt.

So married people can be found liable for one another sets. This typically is not true for unmarried people. So all that to say that feels like the biggest kind of like high level distinction.

But that major protection that Cathy is outlining that she's kind of concerned with, like we don't really have anything to rely on if one of us leaves our jobs in you to protect us in the future. If we split up, you can achieve that with the cohabitation agreement. You just want to make sure that you work with a lawyer, A A family law attorney to make sure that IT is enforceable where you live.

And you can also contract fully define things like property ownership, your wills, custody arrangements, children's support. I think the while's piece is also very important because marry couples like default inherit one other's assets. The same is not true for people that are just living together. So I think you're going to achieve the lions share of the protections that you're concerned about with cohabitation agreement.

Hi, sorry. Did I start you when you used to hearing a certain type of commercial? Something like this can well take you by a surprise, that kind of how IT is with electors R, A vehicle that has continued to defy expectations for over twenty five years, from the first luxury vehicle of its kind to the first hybrid luxury vehicle to the only plug in hybrid worthy of the arx name. We understand you want more than the everyday S. U, V, and isn't being understood and amazing feeling experience amazing at your lexis dealer.

Can I add a couple other renters to consider, please? So one of the things that I saw when I was reading about this is that in unmarried couples who break up, the child's pretermit has to be established to be a DNA or genetic testing. So in a marriage, the legal father is like assumed to be the man in the marriage, but in a unmarried couple, they have to establish if this, in mary's voice, this is the father.

But that also means that the woman parents t will not receive any child support until that PPT unity is acknowledged or prevent. So that is something to keep in mind. And this kind of varies by state from what is on. I think that we can, at that copyright, told us all of this, which is that a lot of this will vary by stay in my live. A couple other things that I saw was if your partner becomes incapacitated when you're married, usually your sponsor partner can be the person who makes those decisions for you.

If you're unmarried, you may not have that option, although less is were in in that contain bitch agreement or that there's an a power attack y that's been given to you and health care power bitches for something again to think about. And I read something about five twenty nine accounts. I I know a lot of parents who listen to the show, look in the five twenty nine accounts, so I just want to to mention IT, so each parent can establish their own five twenty nine account.

But in, for example, in new york's state, you can get tax benefits for contributing to that. But you don't get tax benefits if you're unmarried, partner opens if I twenty nine and and contribute to IT, you need to have your own. So again, would encourage you to get this point, to talk to a family lawyer who would know more of this stuff. But I do think that there's some like smaller things that people need to consider if they're not planning ever get married.

Yeah kind of strikes me almost as like you're trying to build all the car. I want some of the protections of marriage. I don't want to assume some of the downside risks of marriage because there are financial downside risks, just like there are potential benefits that you stand again, there are also risks. And so if you decide that taking on those legal risks and taking on the downside is not for you, but you do want to make an effort to put those legal protections in place, I think this is what's going to get you closest. And again, a family law attorney is the type of person that you would consult to write a contract like this.

I saw one family lawyer say you could also get married and carve out the party you don't want in a renuart so that yeah get the other way around so you got options, which is good news yeah.

I think the thing to me is that the income and asset splitting part feels extremely difficult to get around. Like if ultimately your concern is that you will be with this person for a long time, but maybe not forever and thirty years down the road, you are really trying to avoid the painful process of having to split up your life's property with them. Somebody could come to the rational decision that IT makes more sense for them and their relationship and their personality type that like IT, is Better for us to just keep IT all separate to begin with and choose to be together in the ways that we want to be.

As far as I understand that there are certain things that marriage does in making you legally one entity that you cannot carve out with a ping up, to my understanding, at least in a way that is like reliably enforceable, that like, well, all of my income is going to stay mine and all their income is say there is and all the growth and arrest this to happen after we get married. Maybe there are some lawyers that would do that. My understanding is that that's actually pretty tough to do.

And like judges typically would not enforce that because it's kind of like it's so in opposition with the institution of legal marriage to begin with that it's like, well, at that point, why are you like just get ceremony married like cava ceremony but don't like legally join yourselves together if you want nothing to be together you what I mean yeah, it's a good point though. Yeah I just think everyone is I don't think anyone should feel pressured to get married if they don't want to. I feel very strongly about that.

particularly women cough, cough to my indian parents sub tweet.

But yeah, I mean, I I made a joke that I would not recommend getting divorced for tax purposes in a previous rich al round up. I stand by that theme of like I would not support actually I will joke that I got married for my married filing jointly tax status. But obviously i'm kidding.

That was not the reason why I got married and nice burks and nice voice. But I think that the other obvious upside two marriage the cohabiting doesn't give you is that overall lowering of of tax liability. And that's another thing that is different in the U. S. And in other countries like you don't get a legal taxation benefit in most other countries for getting married.

which could be why we have such a high rate of marriage, is that people feel like there are benefits to you.

Yeah one last thing, unlike the stuff that I think people should be aware of when they're waiting this decision and deciding what's best for them, marry people get survivor benefits of social security income that cohabiting people do not get. So if you end up living together for the rest of your lives and your partner dies, if you are married, you can be entitled to some of their social security benefit.

And if you aren't to married, you are not. For some people, that is like enough of an incentive to roll the dice. Risky at the premium.

You know, go hadn't do IT. But again, this is like you are really wearing a lot of considerations about what is best for you and what you feel good about. Asked me if I considered .

social security when I got married. No, I don't think anybody thinks about this.

Half the time I was like, yeah when you know, in my seventies, I really won't make sure I get that extra enfant. But I mean, I know IT does make a difference, that there are a lot of american, and goals at percent only live on social security. And so IT totally is worth considering. But I have a feeling, if you're listening to this show and thinking this heart about your financial future, you're probably making other plans for yourself and you're probably being pretty comprehensive in your financial planning. So yeah, just want to throw .

that out there. Do you want to share some really important .

feedback that we ve got recently? yes. So this is really hard, but we received some really necessary feedback about our statements about laws.

Oh, a few weeks ago I was insensitively joking about how dumb laws, or those big water sponges that you have to take care of. And rich girls, Christine and Caroline, weight in from different sides of the land's eight bedroom. Hanna pleas .

to the honnor. Christine s. Said, loans are a man's version, being hard girl hamster's he men, which true, uh, but an alternative. P O V from Caroline SHE said, women, especially moms, should claim them get me out OK SHE said as a mom, moving along has become sacred me time. My guard is my personal sanctuary, please.

I can retreat to and right to mower tractors or four beautiful uninterpreted hours with the sweet sound of not being asked for snacks, the great feeling of not having my legs endlessly hugged and hugged, deliberating sensation of solitude, which I never get at home, even in the bathroom, just me, the mower and will usually your voice or Taylor swift s what a nice conversion. Plus I emerged with a lovely glow after a Sunny mall and fringe benefit of forcing my partner into active parenting for several consecutive hours. I know, I know that whole situation is a bigger discussion in problem, but for another time, so back to my lawn. It's paradise, ed, with the side of empowers any takers or just me.

So I don't ever wanted hear that I don't show you both sides on the money with kd show. We are we are demonstrating opinions from all over. And I have to say karoline, I think you convince ed to me. I think i'm gonna attract my strongly worded statement about lungs being dumb because I did fail to recognize that if you are constantly being tugs and hugged, that you might really relish your time on that riding. Bower.

remember when I told you my story about the riding mower and you said to cut because IT wasn't funny enough.

And I was like, one time I was on a friday night, and I ran into a tree and was like, okay.

and was like, two vials. You gotta build up .

to the punch line a little bit more. And like, builds this fence. We need more attention. You can keep IT in this .

time about that. O I the right this time. But I was running a mower at, like, clubs old.

We had a riding IT circles. I got DIY and I read to a tree. I want to think .

you included the board about getting dizzy first time. That does make a funny arrivals. I got Daisy. okay. Well, that is all for this week's rich roll round up. We will see you on wednesday to talk about some important insurance that you probably wanted get if you are a higher.