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When you and another adult decide to cohabitate. A significant portion of each of your financial lives end up merging. You’ll often share or split household bill responsibilities. In some cases, your assets may become a bit entangled. If you’re worried about protecting your assets when merging households. There are things you can do to maintain the needed amount of separation. Here are some options that may work for you.

Don’t Add Anyone to Your Accounts

With joint accounts, both parties have legal access. While this may not be problematic for living expense-related bills like utilities. If the account is tied to an asset, like a bank account, retirement fund, investment account, or home equity line of credit (HELOC). It could become an issue.

Generally, you shouldn’t add another person to any of your asset-based accounts if you want to keep them protected. That way, no one else has access but you.

Create a Legal Agreement

Usually, when people think of legal agreements for protecting assets, prenuptial agreements are what spring to mind. If you plan on getting married, then a prenup may be your ideal solution. It allows both parties to formally outline ownership of pre-marital assets, ensuring that, if they ultimately divorce, specific assets go back to the party who brought them into the relationship.

If you aren’t getting married, it may seem like that form of protection isn’t available. However, that isn’t necessarily the case. When you merge households, you can create contracts that operate similarly to a prenup even if you aren’t intending to marry. In these, you would essentially agree to who has legal ownership of what, allowing both parties to protect any assets that matter to them.

If you go this route, it is usually wise to work with a legal professional. That way, the agreements can be formal and aligned with local law.

Define Ownership with New Assets

If you need to acquire a new asset, you and other household members may need to define ownership in advance. This is especially true for assets that are purchased by one person but are made available to the household for use, like furniture, vehicles, or home purchases.

In some cases, you may need to craft legal agreements to protect any of your new assets. For unmarried couples, this may be especially true in states with common law marriage or other cohabitation-related legislation directed at unmarried couples that give the other household member rights to newly acquired assets.

For married couples, whether new assets acquired during the relationship can be protected may depend on local law. Community property states have rules that usually make certain (but not all) new assets jointly owned, even if only one spouse handles the acquisition. However, that doesn’t mean there aren’t options available.

Final Note on Protecting Your Assets While Merging Households

If you aren’t sure about your state’s laws, contact a legal professional. They can help you review the state’s views on the ownership of the asset and provide you with guidance about any steps you may need to take to protect it, suggesting that it is actually a possibility legally.

Do you have any other tips that helped you when protecting your assets when merging households? Share your thoughts in the comments below.