Money Tips For Unmarried Couples 2009: Countless Reasons

Money Tips For Unmarried Couples

There are countless reasons couples choose to live together without walking down the aisle first.
If marriage isn’t on your agenda, but living with a significant other is, talking finances now can save you money and trouble down the road. Topping his list: buying property. “It’s a question of how they’re going to own assets, share expenses and who’s going to pay for what,” he says. Suppose you’re in a relationship in which one partner earns $100,000 and the other $50,000 a year. You decided to have the high-earner cover the majority of the down payment and monthly mortgage payments. Since both partners are paying for the mortgage, both are eligible to claim a mortgage interest deduction from their income taxes (assuming they both itemize deductions.) It’s also vital for unmarried couples to make out wills and grant each other power of attorney. Otherwise, the partners may have no say in each other’s affairs, or rights to one another’s assets, in the event of a sudden illness or death. If you’re in a relationship that’s not recognized by some sort of domestic partner law, and you don’t have a will, then a blood relative, rather than your partner, will likely be granted rights to discharge your estate. “You want to make sure that the people you want will get your property and are in a position to make decisions for you if you become incapacitated in some way,” Hoffmeister says. Even young couples without property or significant assets should do some tax planning. Keep in mind that you can gift up to $13,000 annually to anyone you like (as long as no services are provided in exchange) without the Internal Revenue Service regarding it as taxable income. Why should that matter Suppose you want to contribute to a charity but you are in a lower tax bracket than your partner. It makes more sense for the higher-income partner to do all the couple’s donating so that he or she may can claim a greater charitable deduction.
And in that case, you may want to have a little talk about budgeting before exchanging vows.

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