Cohabitation Without Solemnization- Financial Complications in Utah
Spouses and couples who live together without getting married often keep separate bank or brokerage accounts, and they might hold real estate and other property in their own name rather than jointly. That can be a smart strategy…But separate assets can present some problems as well…
When two people love each other, and especially if they have lived together outside of marriage for some time, then the question of who owns what can get downright ugly. That said, how a couple owns something, whether together or separately, is a pressing question in other regards. Obviously, jointly owned assets are a sticky wicket. Surprising, separately owned assets can have unintended (and unpleasant) consequences, too.
When it comes to jointly owned assets it is not too hard to understand how problems can erupt. When it comes to separately owned assets, take a look at a recent article in The Wall Street Journal titled “Separate Assets, Joint Problems.”
What are the biggest problems behind separate assets?
The original article gives four points to ponder:
- Those assets aren’t necessarily separate under the law. Utah, for example, recognizes marriages not solemnized. (Section 30-1-4.5, Utah Code Annotated)
- Separate accounts may foster a failure to communicate.
- Separately owned property may be at greater risk in a bankruptcy or lawsuit whereas jointly owned property may present some asset protection.
- Separate accounts can lead to administrative difficulties.
When you boil it all down, the underlying difficulty behind three of these points is simply coming to terms with what separately held assets mean for a married couple.
For example, sometimes assets are not truly separate because state law makes them marital. Like most things in life, there are trade-offs regardless. The time and money spent getting competent legal, financial and tax counsel may be well worth the investment.
Reference: The Wall Street Journal (November 10, 2013) “Separate Assets, Joint Problems”
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