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Till Death Do Us Part... Or Not: Financial Planning for Unmarried Couples

July 26, 2024

Jennifer and David had been together for eight years. They owned a house, shared a dog, and were talking about starting a family. To all their friends and family, they were as good as married. But legally? They were just two individuals sharing a life.


One day, David was in a severe car accident. As he lay unconscious in the hospital, Jennifer was shocked to discover she had no legal right to make medical decisions for him. Their shared house? It was in David’s name only. Many of their utilities and credit cards were also in David’s name, so the companies wouldn't speak with Jennifer when she called them about their bills.


These are just a few examples of the unique challenges unmarried couples face. While love may not need a marriage certificate, your finances might appreciate one. You're not alone if you're in a committed relationship without plans to tie the knot. According to the Pew Research Center, the number of U.S. adults in cohabiting relationships has steadily increased in recent years. 


Without the automatic legal benefits that come with marriage, unmarried couples need to be proactive in protecting their financial interests and ensuring their future together is secure.


The "What If" Conversation: Preparing for the Unexpected


It's not the most romantic topic, but it's crucial. Sit down with your partner and discuss what would happen if one of you became incapacitated or passed away. Who would make medical decisions? Who would inherit your assets? Without legal protections, your partner could be left out in the cold.


Being prepared for the unexpected starts with: 

  • Creating a durable power of attorney for healthcare decisions. 
  • Drafting a living will outlining your end-of-life care preferences. 
  • Determining a regular power of attorney for financial decisions. 
  • Signing HIPAA authorization forms to allow the release of medical information to your partner.


Joint Finances: Financial Planning for Unmarried Couples


Navigating financial life as an unmarried couple presents unique challenges and opportunities. From buying a home together to planning for retirement, every decision requires careful consideration and clear communication. 


Below are some tips on how to protect your assets, increase your communication, manage your estate, plan for retirement, and understand the implications of taxes and insurance. 


Protect Your Home Sweet Home


If you're buying a home together, think carefully about how you'll hold the title. Options include:

  • Tenants in Common: You each own a specific percentage of the property. If one partner dies, their share goes to their estate, not automatically to the other partner.
  • Joint Tenants with Right of Survivorship: You both own the entire property. If one partner dies, the other automatically inherits their share.


Consider a cohabitation agreement that outlines how you'll handle the property if you split up. It's like a prenup but for unmarried couples.


Have the Money Talk


How will you handle your finances? Some couples keep everything separate, while others combine everything. Many find a middle ground works best. You might consider:

  • A joint account for shared expenses, with individual accounts for personal spending. 
  • A detailed budget outlining who pays for what. 
  • Regular "money dates" to discuss your financial goals and progress. 


Remember, without the legal protections of marriage, it's crucial to keep clear records of who contributes what to shared assets.


Plan for Retirement 


Unmarried couples miss out on some of the retirement perks that come with marriage. For example, you cannot claim Social Security benefits based on your partner's work record. But there are still ways to plan for a comfortable retirement together:

  • Max out your individual retirement accounts.
  • If one partner earns significantly more, consider gifting money to the other to invest (up to the annual gift tax exclusion limit).
  • Look into domestic partner benefits offered by your employers.


Review Insurance Matters


Review your insurance policies to make sure your partner is protected:

  • Health insurance: Explore options for domestic partner health insurance coverage, which some employers offer.
  • Life insurance: Name your partner as the beneficiary to provide financial protection if something happens to you.
  • Disability insurance: This can replace a portion of your income if you're unable to work due to illness or injury.


Plan Your Estate


You might think estate planning is just for the wealthy, but it's crucial for unmarried couples. Without a will, your assets will be distributed according to state law, which often favors blood relatives over unmarried partners.

Consider creating:

  • A will that clearly outlines your wishes.
  • A living trust to avoid probate and provide more control over asset distribution.
  • Beneficiary designations on retirement accounts and life insurance policies.


Explore Tax Implications


When it comes to taxes, unmarried couples face a different landscape than their married counterparts. While you might miss out on some benefits, there can also be advantages. Let's break it down:

  • Filing Status: As an unmarried couple, you'll each file as single or, if you have dependents, possibly as head of household. This means you can't take advantage of the married filing jointly status, which often results in a lower tax bill.
  • Income Thresholds: On the flip side, staying single for tax purposes can be beneficial if you both have high incomes. Married couples sometimes face a "marriage penalty" where their combined income pushes them into a higher tax bracket.
  • Deductions and Credits: You cannot both claim the same child as a dependent, but you might alternate years if you're co-parenting. Only one can claim mortgage interest and property tax deductions if you own a home together. Education credits, like the American Opportunity Credit, can only be claimed by one person for each student.
  • Gift Tax Considerations: Unmarried couples must be aware of the annual gift tax exclusion (currently $18,000 in 2024) when transferring money between partners. Exceeding this amount could require filing a gift tax return.
  • Health Insurance: If one partner covers the other on their employer-provided health insurance, the value of that coverage is often taxable income for the covered partner. Married couples don't face this issue.
  • Selling a Home: If you sell your primary residence, each unmarried partner can exclude up to $250,000 of gain, potentially allowing for a $500,000 exclusion — the same as a married couple.
  • Retirement Account Contributions: You can't contribute to an IRA for your partner like married couples can. However, this also means you're not limited by a non-working spouse's income regarding Roth IRA contributions.
  • Estate Taxes: Unmarried partners can't take advantage of the unlimited marital deduction for estate taxes. However, with proper planning, you can still transfer significant assets to your partner tax-free.
  • State Taxes: Remember to consider state taxes, which can vary significantly. Some states recognize domestic partnerships or civil unions, which might affect your state tax situation.


Remember, tax laws are complex and change frequently. Working with a qualified tax professional who can help you find the most advantageous approach for your situation is crucial. They can help you identify opportunities to minimize your tax burden while ensuring you're fully compliant with all relevant laws.


At Five Pine Wealth Management, we work to ensure our clients' financial plans are tax-efficient. We can help you understand the tax implications of your financial decisions and develop strategies to optimize your tax situation as an unmarried couple.


Protect Your Business


Written agreements are crucial if you and your partner run a business together. Consider creating:

  • A partnership agreement outlining roles, responsibilities, and profit-sharing. 
  • Buy-sell agreements in case one partner wants to leave the business. 
  • Succession plans for what happens to the business if one partner dies or becomes incapacitated. 


Take the Next Step Together With Five Pine Wealth Management


Remember Jennifer and David from our opening story? After David’s accident, they realized how unprepared they were. They worked with a financial advisor to create a comprehensive plan that protected them both. Now, they know that they're financially prepared no matter what life throws their way.


Financial planning requires careful consideration and proactive steps for unmarried couples. You can build a secure and prosperous future together by addressing the unique challenges and leveraging the opportunities.


If you and your partner are navigating financial planning without the legal framework of marriage, we’re here to help. At Five Pine Wealth Management, we specialize in helping couples — married or not — build strong financial foundations for their future together. We understand that every relationship is unique, and we're here to help you create a plan that works for you.


Ready to take the next step in securing your financial future together? We'd love to chat. Visit us at Five Pine Wealth Management, call 877.333.1015, or email us at info@fivepinewealth.com.


Remember, love may not need a piece of paper, but your finances might appreciate some documentation. Let's work together to ensure your partnership is emotionally and financially protected.

The Best Long-Term Investment Strategy? Stay Invested, Stay Calm

June 20, 2025
When markets are calm, investing can feel easy. You contribute regularly, watch your portfolio grow, and start picturing that future vacation home or early retirement. But when markets get volatile, everything changes. Suddenly, headlines are full of dire warnings. Account balances fluctuate. And the urge to do something can feel overwhelming. At Five Pine Wealth Management , we understand how emotional investing can become during periods of market uncertainty. One of the most important things we do as fiduciary financial planners is to help our clients stay grounded when the market gets choppy. Let’s walk you through how we approach investment risk management and why having a clear, disciplined philosophy matters most when volatility strikes. Our Philosophy: Think Long-Term, Not Next Week When markets are moving fast, it is easy to think that the “best long-term investment strategy” must involve taking action to avoid losses or chase gains. The reality is usually the opposite. Reacting to market noise can often do more harm than good. In fact, one of the greatest risks to long-term returns is making emotional decisions in response to short-term events. We coach our clients to stay focused on their long-term financial plans and goals. Volatility is a feature of markets, not a flaw. By designing portfolios with realistic expectations for ups and downs, we help clients stay invested through all market environments. Here is what this looks like in practice: We use broadly diversified portfolios built around low-cost ETFs. We focus on asset allocation aligned with your time horizon, goals, and risk tolerance. We do not chase trends or attempt to time the market. We regularly review and rebalance portfolios based on your financial plan, not headlines. In short, your portfolio is designed to ride out volatility, not avoid it entirely. Fiduciary Financial Planning: Advice in Your Best Interest There is a great deal of noise in the financial world, particularly during turbulent market conditions. One of the most significant ways we help cut through it is by being fiduciary financial planners. That means we are legally and ethically obligated to act in your best interest at all times. We are also fee-only advisors. We do not receive commissions for recommending one investment over another. Our primary agenda is to help you reach your goals. During market volatility, this matters more than ever. Too many investors fall prey to sales pitches disguised as “solutions” to market risk. We focus on education and long-term planning rather than quick fixes. Being a fiduciary allows us to focus on what serves you best: Keeping you aligned with your personal goals and values Helping you tune out market noise and media hype Offering sound, research-backed guidance without conflicts of interest Your Coach Through Emotional Market Cycles One of our most important roles as financial planners is helping clients manage the psychological side of investing. It is one thing to know, intellectually, that markets will recover over time. It is another thing to watch your portfolio drop 15% and not feel anxious. Market downturns create powerful emotions. Fear. Doubt. Sometimes, even panic. As humans, our instinct is to take action to relieve those feelings, even when the logical course is to stay invested. That is where we come in. We help coach clients through these moments so they can avoid costly mistakes like: Selling during a downturn and locking in losses Chasing the next hot trend during a rebound Over-concentration in “safe” assets out of fear We remind clients that volatility is a normal part of the market. Markets have experienced recessions, wars, pandemics, and political turmoil before. They will again. Over time, markets have historically rewarded patient investors who stayed the course. When you work with us, you gain a trusted partner who is here to talk through your concerns, offer perspective, and help you make decisions that serve your long-term goals. Why Staying the Course Actually Works It may seem counterintuitive, but reducing activity during market volatility often yields better outcomes. Consider this: From 1999 through 2018, if an investor missed just the 10 best days in the S&P 500, their overall return would have been cut nearly in half . Many of the best market days happen very close to the worst ones. Trying to time the market is a challenging task, even for seasoned professionals. By maintaining a disciplined investment approach and staying fully invested, you ensure that you are there for both the recoveries and the long-term growth that markets provide. Our role is to help you build a portfolio designed for precisely this kind of staying power. We structure your investment mix to help you weather market cycles without having to guess what will happen next. Educating Clients About Normal Market Cycles Another key aspect of fiduciary financial planning is helping clients understand what is “normal” in the market. Volatility is not a sign that something is broken. It is a natural part of how markets function. In fact, without volatility, markets would not offer the returns that make long-term investing so powerful. We work with clients to help them see: Why some years will be down, but others will be very strong Why trying to avoid all losses is neither realistic nor necessary How staying invested through cycles often leads to far better outcomes than jumping in and out of the market Perspective is everything . The more you understand market behavior, the less likely you are to make emotional decisions during downturns. Different Stages, Same Principles Our approach also adapts to the varying needs of clients at different stages of their financial journey. For clients in their 40s to 60s: We may focus on prudently preserving and growing wealth. We help manage sequence-of-returns risk as you approach retirement. We may emphasize income planning and portfolio sustainability. We ensure that your investment mix aligns with your evolving goals and risk tolerance. For clients in their 30s: We provide education about typical market cycles (especially if this is their first experience with volatility). We coach clients to take advantage of their longer time horizons. We help younger investors see downturns as buying opportunities, not threats. In all cases, we are committed to helping clients invest with confidence, regardless of the headlines. Ready to Build a More Resilient Investment Strategy? Market volatility will always be part of investing, but it doesn't have to derail your financial goals. As your trusted financial advisor Coeur d'Alene team, we're here to help you navigate market uncertainty with confidence through our comprehensive financial planning approach. Contact Five Pine Wealth Management today to discuss how our investment philosophy and comprehensive financial planning approach can help you navigate market uncertainty with confidence. To see how we can help you support your financial goals, send us an email or call us at 877.333.1015.  Whether you're looking to preserve the wealth you've already accumulated or build a foundation for long-term growth, our team has the experience and commitment to help you stay focused on what matters most: achieving your financial goals.

From Full House to Financial Freedom: Smart Money Moves for Empty Nesters

May 23, 2025
The day your last child leaves home hits differently. It’s not just about the quiet hallways or fewer groceries in the cart. It’s the moment you realize that the life you’ve known for 20+ years is evolving into something new. For many, that change is deeply emotional. But it’s also a golden opportunity. At Five Pine Wealth Management, we work with parents who are entering this new season of life. Maybe you’re celebrating. Perhaps you’re feeling uncertain. Likely, you’re feeling a mix of both. This new chapter comes with financial freedom and decisions to match wherever you land. Let’s explore the smart financial moves you can make as empty nesters. Empty Nesters: A New Financial Season Meet Rob and Dana. After 25 years of raising three kids, their youngest finally left for college last fall. Their house, once bustling with backpacks, soccer cleats, and half-eaten cereal bowls, suddenly felt oversized and eerily quiet. They weren’t used to grocery bills being cut in half or weekends without games and activities. But what really surprised them? Just how much less money was going out each month. They came to us with a familiar feeling: a mix of excitement and uncertainty. "We think we're in a good place," Dana said. "But are we doing what we should be doing?" This is where a financial check-in becomes vital. With fewer day-to-day expenses and more flexibility, this is a time to refocus your finances. Here’s where to focus: Revisit your monthly budget. Your spending needs have probably changed. Without dependents at home, you may find new flexibility. Redirect those dollars toward long-term goals. Refresh your financial goals. That dream trip to Italy or the kitchen renovation you’ve put off? Let’s pencil it in, but also ensure your retirement accounts are getting the love they need. Update your estate plan. Now that the kids are young adults, your wills, healthcare directives, and beneficiaries may need adjusting. Freedom looks different for everyone, but for many, it starts with clarity. Pre-Retirement Planning: Your Next Big Financial Milestone For most empty nesters, retirement is no longer a distant concept—it’s getting real. Pre-retirement planning becomes a critical focus, especially in your late 40s to mid-60s. This is often the highest-earning period of your life and the sweet spot for pre-retirement planning. Here’s what we help our clients prioritize: Maximizing retirement contributions : As an empty nester, your cash flow could increase by 12% or more . Now’s the time to supercharge your 401(k), IRA, or other investment accounts with that extra cash. If you’re 50 or older, take advantage of catch-up contributions. Evaluating your risk exposure : Is your portfolio still aligned with your risk tolerance and timeline? Consider your tax strategy: With fewer deductions (like kids at home) and possibly a high-earning year, you may want to explore Roth conversions, charitable giving, or other tax-aware strategies. Running retirement projections : We help clients answer big-picture questions like: When can I retire? Will I have enough? What lifestyle can I realistically support? These aren’t always easy questions, but they’re essential. Planning for healthcare : Don’t wait until 65 to think about Medicare. Explore long-term care insurance and out-of-pocket expectations now. Rob and Dana sat down with us to run a retirement analysis. With only 8 years until Rob planned to retire, we helped them rebalance their portfolio to reduce risk, evaluate their pension and Social Security options, and make a plan to pay off their mortgage early. The result? They now have a clear retirement date and peace of mind. Should I Downsize My Home? One of the most common questions we get from empty nesters is, “Should I downsize my home?” It’s not just a financial question. It’s an emotional one, too. That house holds birthday parties, graduation photos on the stairs, and a dent in the drywall from a wild game of indoor tag. But it may also hold higher property taxes, more space than you use, and maintenance costs that don’t serve your current lifestyle. When deciding whether to downsize, we walk clients through: Total cost of ownership : What are you paying for the space? Emotional readiness : Are you ready to let go of the home? What would moving free up? : Cash for retirement? A move to your dream location? Family needs : Will your kids (or grandkids) be visiting regularly? Would a smaller home still support that? Downsizing doesn’t always mean moving into a tiny condo. Sometimes it means relocating to a one-level home with less yard or trading square footage for a better lifestyle. For Rob and Dana, downsizing meant moving to a townhome closer to their daughter and walkable to their favorite coffee shop, all while cutting their housing costs by nearly 35%. Give Yourself Permission to Dream Again One of our favorite things about working with empty nesters is helping them rediscover what they want. For years, life revolved around the kids. College tours. Dance recitals. Saturday mornings spent on the soccer sidelines. You were investing in their future. Now, it’s time to invest in yours. That might mean: Launching the business you put on hold Traveling during off-peak seasons (because you can!) Picking up a new hobby or volunteering more Creating a legacy through charitable giving or a family foundation Whatever it is, we want to help you align your money with your vision. Ready to Rethink the Next Chapter? This stage of life is full of opportunities, but it can also raise big questions. The good news is you don’t have to figure it all out on your own. Whether you're considering downsizing, exploring early retirement, or just want to know you’re on the right path, Five Pine Wealth Management is here to help you plan wisely, invest intentionally, and live fully.  Take advantage of this pivotal financial moment. Call (877.333.1015) or email us today to schedule your empty nester strategy session. The empty nest doesn't have to feel empty. It can be the launch pad for your next chapter of financial success.