By Jill Schlesinger
April 28, 2016

The percentage of unmarried couples living together has jumped from slightly more than 1% of all couples in 1960 to nearly 12% today. If you’re planning to shack up without getting hitched, though, keep in mind that — because marriage offers many legal and financial protections — unmarried couples need to jump through some additional hoops to protect themselves.

Here are three specific steps you need to take before renting the U-Haul.

1. Spell Out an Agreement

Just assuming that all the financial details will work themselves out once you’re under the same roof? Uh-oh. A better idea is to create a “living together contract” or “relationship agreement,” outlining in plain language how you both will manage and pay for expenses, like housing, food, childcare and utilities. You can draft one of these agreements inexpensively at one of the many do-it-yourself legal sites.

If you want a professional involved, many matrimonial lawyers are now drafting something called a “no-nup” (as in, no nuptials), which includes agreed-upon terms for the division of assets if a future breakup were to occur.

Of course all of these documents are terribly unromantic, but think of them another way: They allow people to split amicably, if necessary, avoiding the nastiness and expense of lawyers and a potential court battle.

2. Determine Property Ownership

Such an agreement gets an extra wrinkle if one of you already owns property. You need to decide whether or not you want to co-own the property and, if so, whether you want to own it jointly with rights of survivorship — so that if one partner dies, the other will automatically inherit the property.

You should also discuss which one of you will claim certain tax-deductible expenses like mortgage interest and property taxes.

3. Get Estate Planning Documents in Line

Marriage also tends to provide some basic protections for a shared estate, but unmarried couples who are serious enough to move in together should consult an estate attorney to draft specific documents. You’ll want to make sure you have wills, a health care power of attorney, and a durable power of attorney in place. And if you have significant net worth — enough to trigger the federal estate tax, say, or more than $5.45 million or so — you may want to consider a trust.

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