face special financial situations
Solot stresses that these documents are for couples
that survive the initial getting-to-know-you phase and are in it
for the long haul. A good place to start is with the cohabitation
agreement, sort of a prenup
without the nup.
"It doesn't have to be limited to issues regarding
what if you break up. It can also be about how you'll handle your
finances while you're together," she says. "What are the
rules if you have a joint account? What's it to be used for? If
you have a joint credit card, how much can you buy on it? A lot
of couples find it helpful to have something they can refer back
to that explains what the expectations are."
Rhode cautions new partners to get to know each other's
credit history and spending habits before establishing joint accounts.
After all, your continued good credit could depend on it.
"This is a trip-up even for married couples because
if you have a joint credit card and you divorce, you divorce your
spouse, not your credit report," he says. "So now you're
left jointly obligated for the debt of somebody you can't stand."
The biggest money decision involves how you will pay
the bills. Will you pool all expenses and share them according to
ratios based on your incomes? Will you divide them? I pay these,
you pay those or split the bills evenly?
Whatever method you choose, it's a good idea to make
sure all your bills are getting paid in a timely manner.
Disclose your money style
"One law of nature is that savers attract spenders," says
Rhode. "The mistake I see lots of people making is not looking
over the bills together. It's you pay the cable bill and I pay the
trash bill and everything remains separate so nobody has a clear
picture of what's really going on. That's not helpful."
Stacy Whitman, who co-authored Shacking
Up: A Smart Girl's Guide to Living in Sin Without Getting Burned
with her attorney sister Wynne, suggests a couple schedule a money
date and talk about financial goals and sources of irritation before
moving in together.
"You could have different savings habits, different
financial goals, different views about money in general," she
Solot says financial frankness is especially important
when an unmarried couple makes the leap to purchase
You can take title as joint tenants, in which you
are both equal owners and automatically receive the other's share
if he or she dies, or as tenants in common, in which case you can
own the house in unequal percentages and do not have automatic right
"It is common for people to bring different amounts
of money and savings and income to the relationship," she says.
"There often is some kind of imbalance there that you have
to work around and find something that feels fair.
"It's really important to have explicit conversations
about how you're going to do it."
Unmarried with children
Things get even trickier when you're unmarried with children.
According to attorney Wynne Whitman, if only one partner
is the biological parent or legal guardian, the other partner has
no financial obligation to the child. If the couple has a child
together, however, courts will generally hold both legally responsible
for the child as long as both parents' names appear on the birth
Unmarried couples should take steps beforehand to
plan for the child's upbringing.
"If you're thinking about having a child together,
it's a good idea to draft a co-parenting agreement and consult a
family-law attorney in your area because state laws do differ,"
says Whitman. "This is particularly important for homosexual
couples where one is the biological parent."
Her sister, Stacy, agrees: "You should see a
family-law attorney to get some guarantees regarding child custody
and child support in the event the two of you were to break up."
Bottom line: Cohabitation may appear more carefree
than marriage, but it's also fraught with considerable financial
risk. Draft the necessary agreements. They can help protect your
credit and provide an effective blueprint to keep money issues from
ruining your romance.
Jay MacDonald is a contributing editor
based in Mississippi.