Divorce is notoriously expensive (both financially and emotionally), but as more unmarried couples move in together, they may be surprised to discover the costs of breaking up an unmarried household. For instance, "someone has to pay for a mover and cough up the security deposit because you’re not necessarily going to get it back from the original apartment if the other person is staying," says Wynne Whitman, attorney at the law firm Schenck, Price, Smith & King, LLP and coauthor of Shacking Up: The Smart Girl's Guide to Living in Sin Without Getting Burned. "There are a lot of expenses involved in setting up an apartment."
Our friends at Bundle.com talked to Whitman about cushioning the financial impact and dividing up a household.
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Signing a cohabitation agreement
It's a good idea to discuss expectations before moving in together, even though it may sound unromantic. "Take the time to have the uncomfortable conversation about what you anticipate happening if you break up," says Whitman. "Everyone feels better if you've taken the question mark out of the equation." In fact, she suggests signing a cohabitation agreement (like a prenup for the unmarried) outlining who's bringing what to the relationship, how expenses will be divvied up, and what will happen in the event of a break up. Those who have lots of assets should consult a lawyer, adds Whitman.
Protecting against the unexpected
Cohabitation agreements are useful in case something tragic happens to one person. A woman referenced in Whitman's book had been living with a Wall Street tycoon when he died in 9/11 and his family started taking belongings from their apartment. "How are the families going to know what belongs to each person? What were your intentions?" asks Whitman. Cohabitating couples may also want to consider healthcare proxy forms so that one person can make medical decisions for the other person if necessary (just be sure to update those forms later if you break up).
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