Key takeaways

  • The number of unmarried couples living together in the U.S. has more than doubled since 1990.
  • These couples need to take extra precautions with retirement and estate planning, as laws are far more catered to those who are married.
  • Even with precautions, there will always be a measure of financial risk without the legal protection of marriage.

As times have changed, so has the American perspective on marriage. Fewer couples feel pressured to get married before they’re ready, with some choosing to live together and even have kids without tying the knot. In fact, the number of unmarried couples in the U.S. has more than doubled since 1990.1

While this decision has its advantages – reducing the likelihood of future divorce – there are some financial drawbacks to remaining unmarried. This is especially true as it relates to retirement and estate planning.

Regardless, there are ways unmarried couples can overcome these challenges. Let's dig in:

Common-law marriage may not make a difference

Some unmarried couples may forgo marriage because they believe themselves to be “common-law married” – a phenomenon that can apply after a couple lives together for seven years. However, this distinction isn’t recognized in many jurisdictions and therefore does not provide legal protections similar to marriage.

It is possible for couples to build a successful retirement and estate plan while unmarried, but long-term partners should be aware of the risks and benefits they may be losing out on. If they’re set on remaining unmarried, they can help reduce these risks by consulting an attorney and applying certain considerations to their financial planning process.

Retirement and estate planning challenges for unmarried couples

Unmarried couples face more challenges than their married counterparts when it comes to planning for retirement and arranging for what will happen with their assets when they pass away. Simply put, marriage provides certain default protections that can be hard to replicate. Here are the main challenges to consider for couples who are not married:

  • Members of an unmarried couple have no right to their partner’s assets should one of them die
  • The legal view is also murkier on shared property
  • If an unmarried couple separates and there’s no mutual agreement, division of assets will be left to civil court (which can be slow and expensive)
  • Health care or end-of-life decisions automatically go to next of kin, which is likely not the unmarried partner
  • As a non-spouse beneficiary, an unmarried partner who inherits an Individual Retirement Account (IRA) faces stricter requirements on when they need to withdraw the funds2

Benefits not available to unmarried couples

Although actions can be taken to mitigate an unmarried couple’s financial risk, there are still some benefits that are just not available to people without a legal marriage union. These include:

  • Social Security spousal and/or survivors benefits, which an unmarried partner is not eligible for3
  • Income tax benefits, particularly when it comes to inheriting tax-deferred retirement accounts. An unmarried partner can only transfer the assets to an inherited IRA, must take minimum distributions and must distribute all inherited assets out of the tax-deferred account by 10 years following their partner’s death.4
  • Avoidance of estate and/or gift tax. These taxes can hit an unmarried partner hard if their loved one dies5, especially if that loved one was very wealthy or significantly older (in which case the partner will also incur the generation-skipping transfer tax).6

Steps unmarried couples should take

Fortunately, there are legal recourses to address some of the challenges. Here’s what unmarried couples can do to secure their finances with the help of attorneys and trusted advisors:

  • Name each other in wills, trusts and powers of attorney so that your partner becomes the executor/beneficiary rather than the legally determined next of kin, and consider living wills or advanced directives that describe wishes for end-of-life care
  • Title valuable assets – and especially shared assets – in joint name with rights of survivorship
  • Create a property co-ownership agreement that keeps track of who contributed what to a property (down payment, mortgage, maintenance, etc.) and lays out how the property would be divided in case of separation
  • Similarly, establish a cohabitation agreement that sets parameters for how all financial assets would be divided upon separation

To learn more, read our white paper on the topic here (PDF).

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Pew Research. “Rising Share of U.S. Adults Are Living Without a Spouse or Partner,” (October 5, 2021).


Internal Revenue Service. “Required Minimum Distributions for IRA Beneficiaries.”


Social Security Administration. “Who Is Eligible to Receive Social Security Survivors Benefits and How Do I Apply?”


Internal Revenue Service. “Required Minimum Distributions for IRA Beneficiaries.”


Internal Revenue Service. “Frequently Asked Questions on Estate Taxes.”


Internal Revenue Service. “Instructions for Form 706-GS(T): Generation-Skipping Transfer Tax Return for Terminations,” (November 2021).