Cohabitating before, or in lieu of, marriage has become increasingly popular in the United States.
If you choose to postpone or forego marriage yet live with a boyfriend or girlfriend, it is wise to protect yourself and your partner to avoid disputes that could lead to litigation down the road.
What Legal Options Are Available to Protect Cohabitating Couples?
Various legal tools and strategies can be used to protect the interests of cohabitating couples; however, the most commonly used tools are a revocable living trust and a limited liability company (LLC).
If the property where you will reside is your “homestead” property for tax purposes, a revocable living trust is generally the best option.
A living trust is a legal arrangement that allows a trustee, appointed by the trust creator, to hold the property for the benefit of a third party. Making a trust revocable allows the creator to terminate or change it at any time. You can appoint yourself as the trustee and the beneficiary for your lifetime.
The trust terms determine each party’s rights if the other party passes away or becomes incapacitated and how assets, including equity in the property, will be allocated if there is a breakup down the road.
If the home does not qualify for your homestead exemption, creating an LLC is an excellent option. Because the homestead exemption provides significant tax benefits, this option is typically only considered when a couple is residing in a home that is not a designated homestead.
An LLC is a hybrid legal entity that combines the benefits of a partnership and a corporation. The operating agreement can be used to determine each party’s daily rights and responsibilities regarding the property. The operating agreement can also specify what happens if one party dies or becomes incapacitated and what happens if the LLC terminates.
Speak to an Experienced Georgia Estate Planning Attorney Today
To ensure the financial interest of both parties is protected and to avoid the potential for costly disputes, be sure to work closely with an experienced attorney when you decide to move in with a boyfriend or girlfriend.
Contact an experienced Georgia estate planning attorney to discuss how we can help you by calling 678-882-0830.
