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Permanent partners but never plan to marry? Rules of engagement

The holidays are a busy time of year for engagements. Yet despite the countless ads for diamond engagement rings, social scientists say that a growing number of young couples in the U.S. won't be buying one. They're not planning on getting married.

According to the Census Bureau, about 15.3 million American heterosexual adults were living together in 2012. That accounts for 6.5 percent of all U.S. adults, and that number is almost certainly higher now. You might assume these live-in relationships are a prelude to marriage, and many are. On the other hand, some couples already consider their relationships permanent. They have no intention of tying the knot legally, for reasons that seem good and sufficient to them.

Everyone is entitled to make their own decisions about marriage, but unmarried couples should be aware that marriage really does confer substantial rights and benefits. For example, married couples can transfer wealth back and forth during their lifetimes and pay no gift taxes, whereas unmarried couples must limit the amount they give each other annually or they may owe the IRS.

Those in partnerships outside the legal structure of marriage should clarify their responsibilities and protect their rights up front, or someone is bound to lose out later. Committed unmarried couples do break up sometimes, and the dissolution of their relationships ultimately involves all the same issues as a divorce.

In a divorce, however, a judge is on hand to ensure that the property division and allocation of support and parenting time are basically fair and legal. Without that protection, the parties themselves are responsible for ensuring fairness -- and that can be hard to do when the relationship has broken down. So, it's crucial to develop a fair, written agreement early in the relationship, for the same reasons prenuptial agreements are set up right away.

A prenup for someone who isn't getting married? It does sound odd, so some people call them "no-nups." Depending on your situation, your "no-nup" might be, for example, a cohabitation or domestic partnership agreement.

Like a prenup, your agreement should cover at least these areas:

  • A list of your all current assets and debts, and whether they are individual or joint
  • Who is responsible for paying which household expenses
  • A basic plan for what will happen if you break up, such as who will get the house, whether one partner should receive moving expenses or "palimony," etc.

Ultimately, if your relationship becomes unsalvageable, you will have to figure out how to extricate yourselves with minimal hassle and heartache. Whether you start with a "no-nup" or an estate plan, taking time to plan now is the best way of ensuring that.

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