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Protecting the assets of unmarried couples
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The outcome of asset distribution for married couples is pursuant to the divorce laws, whether it's marital property or community property. For unmarried couples, the outcome in community-property states and marital-property states is about the same.

Certified financial planner Debra Neiman, co-author of "Money Without Matrimony," suggests that unmarried couples go into a property or business purchase with a written agreement.

"You can call it a property agreement or a partnership agreement. It spells out who contributed what toward the purchase. Very often, one person has the capital, and the other has the brawn and contributed the sweat equity."

Prepare 'what-if' contingencies
The written agreement of a property purchase should contain provisions that address "what-if" contingencies. For example: If the relationship dissolves, Party A will have the right of first refusal to buy the house from Party B. Three appraisals of the property will be obtained, and the average will be used as the purchase price, says Neiman.

"Unmarried couples should have durable powers of attorney," she says. "Each one would have their own. They can name each other to make legal or financial decisions if something happens."

For example, if one party suffers a medical crisis and is unable to make business or financial decisions, the second party with a durable power of attorney could do so on the first party's behalf. Otherwise, the second party would have to go to court and ask for guardian status before proceeding.

A written agreement should be bulletproof, and it is a good idea to have it prepared by an attorney. "You don't want anyone to later say that they were forced to sign it," says Neiman. "Married couples have divorce court, rules and formulas. Unmarried couples do not. This is a way to set up your own rules from the get-go."

What if the relationship ends and neither party is willing to sell the property or business? That's a situation most couples would want to avoid.

"We encourage our clients to enter into a property management agreement, or a comprehensive cohabitation agreement," says Elizabeth T. Erhardt, partner at Sideman & Bancroft LLP in San Francisco. The parties are free to contract as they wish, as long as it's not for an illegal purpose, and the courts will enforce the agreement.

What's in a title?
Deciding how to title property can be complex, especially in an unmarried-couple relationship. It's wise to consult with a tax or legal professional before making a final decision, but there are some basics to consider.

If both parties contribute equally, they may choose to own the property jointly with rights of survivorship. A 50-50 split makes sense if there is an equal contribution to the property, but this isn't always the case.

Next: "In the event of the death of one owner ..."
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