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SEATTLE. If you’ve been living together before marriage or committed to a long-term commitment with no plans to get married, you need to prepare for the future or you could be in trouble later, experts say.

There are “increasing rates of cohabitation” where many couples are abandoning marriage because “they don’t see the benefit,” says Michelle Petrovsky, a certified financial planner at Being in Abundance, a financial firm in Phoenix.

Financially, “it can be a blessing and a curse,” he said, speaking Monday at the Financial Planning Association’s annual conference.

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Over the past two decades, more and more American couples have lived together before marriage, according to the Pew Research Center.

The percentage of U.S. adults who are married has fallen from nearly 60% in the 1990s to less than half in 2019, the survey shows. During the same period, the share of US adults aged 18 to 44 who cohabit with a partner rose to 59%.

While some couples opt out of marriage for financial reasons, they may not realize the pitfalls, Petrovsky said. “We always think that there will never be an emergency.”

Here are some unexpected financial issues for unmarried couples to consider.

1. You can’t claim Social Security benefits based on your partner’s work history

If you’ve been married for at least 10 years, you may be eligible to collect Social Security benefits based on your spouse’s or ex-spouse’s work history, including spousal or death benefits.

However, unmarried partners cannot take advantage of these payments together or after separation, even if they have been together for more than 10 years.

Petrowski said the strategy of claiming Social Security benefits can be valuable for spouses who take years out of the workforce to care for children.

2. Inherited individual retirement accounts can cause “unintended consequences”;

Inheriting an individual retirement account also becomes more difficult for unmarried couples, Petrovsky said.

Thanks to the SAFE Act of 2019, certain heirs, including non-spouse beneficiaries, must exhaust inherited retirement accounts within 10 years, known as the “10-year rule.” Previously, non-spouse beneficiaries could roll out distributions during their lifetimes.

“It could have unintended consequences,” Petrowski said, as higher income over 10 years could affect college financial aid, Social Security taxes or higher Medicare premiums.

3. Your partner can be “left with nothing” if you die

Whether you’re keeping assets separately or buying property together, unmarried partners need guidance on proper title and legal documents to protect both parties, Petrovsky said.

For example, you should consider what would happen if you die while your partner lives in your home, she said.

“If you die without a will and you don’t plan, that person’s whole life is going to fall apart,” Petrovsky said.

Property typically passes to your biological or legal heirs.

You can choose a cohabitation agreement, which is similar to a prenuptial agreement for unmarried couples, or a will to cover what happens to the property if one partner dies. You should talk to a local estate planning attorney because the exact laws vary by state, Petrovsky said.

“Your partner may have nothing,” she said, so it’s important to plan ahead for worst-case scenarios.



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