More and more American couples are choosing to not get married but instead live together in long-term relationships according to data from the U.S. Census Bureau. However, just because couples aren't marrying and signing prenuptial agreements doesn't mean they shouldn't have a financial plan in place - some referring to the plans as "No Nupts."
Unmarried couples planning for the future
So how do unmarried, co-habiting couples keep their finances fair and make sure each person is protected? A "No Nupt," also referred to as non-marital agreements or living together contracts, functions similarly to a prenup, establishing how financial, property and debts will be handled during the relationship or in the instance that the relationship dissolves.
A No Nupt is very useful for a relationship that's long term and when such a relationship has a significant amount of wealth, property and debt accumulated or expected to. They're even useful for older couples who choose not to marry so that any end-of-life health or financial decisions can be made as they'd prefer. The goal is to define what each person would like out of the relationship, establishing rights, obligation and distribution of property and wealth.
What should go into a No Nupt?
Ideally, it's best to make the No Nupt as uncomplicated as possible, complete with clear language with whatever necessary detail the couple prefers. Some items suggested to include are:
- Expenses: make a clear plan of how each person will pay any expenses. For instance, paying a mortgage or rent can be 50/50, while other couples may have a joint banking account which they both contribute to and use to pay expenses.
- Property: this includes any property either party came to own before the relationship, after it started and any gained by gift or inheritance. Often, couples will keep property from before their relationship started as well as any inheritance or gifts separate from their shared property. However, property acquired during the relationship should have a defined plan - does each person own 50 percent, or does the person who bought it own it fully?
- Dispute resolution: there should be a clear outline of how to resolve disputes before they arise. For example, deciding to use arbitration or mediation to solve the issue before going to court over the matter.
- End of relationship or death: of course, any relationship can come to an end. Whether it's a break-up or the untimely death of a partner, you'll need to make sure that property and other assets will be taken care of just in case. In the case of a break-up, it's important to lay out what each partner will get, or if one partner will buy the other out.
When you need an attorney
As an increasing amount of couples choose not to get married for various reasons, it's always a good idea to have a plan in mind for any of the above forseen circumstances. It's also important to reach out to a lawyer who practices family law to ensure your No Nupt is legally sound, clear and will protect your best interests, no matter what happens.