For most couples, marriage provides emotional and financial support -- to say nothing of a guaranteed date on Saturday night. But for retired executive Eric Nathan, it's little more than a musty tradition. The divorced 64-year-old North Carolina resident says he prefers his current arrangement: He has a steady girlfriend with whom he can see himself spending his remaining days, but he maintains his financial independence. The only problem is that the couple may still have a few financial matters they need to think through as, well, a couple. "What if my girlfriend needs to move in with me?" asks Nathan.
That sort of question has given rise to an entire niche industry: Call it financial planning for the kind-of-married. In recent years, financial advisers and estate attorneys have started offering services for unmarried couples -- same-sex or not -- who must deal with the same financial issues as their wedded compatriots but lack the piece of paper that makes the process much simpler. There are big numbers behind the push: Unmarried couples constitute some 6 percent of American households, according to the U.S. Census -- a figure that has risen by a quarter during the past decade. In raw numbers, that translates to nearly 7 million households.
Professionals catering to this group say they can barely keep up with demand. J.T. Hatfield Smith, a vice president of SPC Financial in Rockville, Md., says the number of unwed couples he works with has quadrupled to more than 100 households in the past five years. Others say they're looking for ways to tap into the unmarried pipeline. Attorney and CPA James Lange, owner of Lange Financial Group in Pittsburgh, recently signed up for a one-day legal workshop dedicated to working with this niche. And Gregg Parish, a professor at the College for Financial Planning in Greenwood Village, Colo., says his school recently added an accredited program for advising domestic partners. "It got to the point where financial planners were saying, 'Hey, I don't know what to tell these people,'" he says.
And there's a lot to tell: Married couples can take much for granted, like the ability to transfer assets between spouses without tax implications or the right to assume end-of-life caregiving decisions. But for unmarried couples, there's a range of paperwork -- from trusts (which can cost $1,500 to $5,000 in legal fees to establish) to prenup-style domestic-partnership agreements -- that's required to guarantee the proper protections and cost-saving measures. Otherwise, they could run into problems with issues like, say, whether the surviving partner will be able to remain in the couple's home after the other passes.
But the problem, say experts, is that the issues involved are so complex that even specialists devoted to this type of planning can make mistakes. Estate planning is one potential trouble spot. It's a crucial piece of planning for unmarried couples, because there's no assuming the "spouse" will get what he or she deserves or expects, and yet there are few cookie-cutter solutions for drawing up legal documents for unwed partners, says Lange. And even small planning matters can cause problems, says Hatfield Smith. Take homeowner's insurance: If the property is under only one partner's name, the policy won't necessarily cover the other's personal items.
If there's any takeaway for the kind-of-married, say the pros, it's that even a little planning can go a long way, be it in the form of thousands of dollars saved in taxes or the comfort of knowing you can make medical decisions on a partner's behalf. Of course, for some couples, a marriage blessed by the federal government remains an option -- and there are couples who tie the knot for financial reasons, say advisers and attorneys. But Nathan, the retired executive, doubts he and his girlfriend will ever be one of them: "We're both very protective of our freedom."