A few years ago I wrote a column on this topic, but inadvertently there was some erroneous information contained within it. I apologize for any confusion that may have been caused, and by way of atonement I have written this updated column.

Many couples these days may often live together for a period of time as unmarried partners. This group includes not only twenty-somethings fresh out of school, but also middle-aged couples who wish to ensure their estates pass to children from prior marriages, and a host of other 'mature' couples whom prefer not to formalize their cohabitation with marriage.

In Canada today, unmarried couples -- provided they meet certain basic criteria (i.e. living together as partners, or as man and wife) enjoy the same rights, privileges and legal safeguards that protect spouses. This includes eligibility for spousal benefits from employer-provided pension plans and government-provided retirement benefits.

Furthermore, as regards retirement planning, unmarried couples can plan in the same fashion as married couples, without worry that written agreements are required to protect the integrity of their planning. Unmarried couples will be treated as a couple, and not as single individuals by the courts, provided the evidence supports such. This is not to say written documentation would not be helpful, as anything that identifies and clarifies the couple's wishes and intentions will be very instructive and helpful. Also, cohabitation agreements can identify rights and avoid argument after the fact. Of course, they should be revisited on a regular basis and updated to remain current with each parties wishes. In particular, unmarried partners should ensure that their wills are up-to-date and properly drafted. This can only avoid cost, confusion and delays following the death of one of the partners.

For the above reasons, it is not necessary for unmarried couples to maintain separate finances, unless they prefer to.

Regardless of the circumstances, one of the critical issues unmarried partners face is managing personal finances. If you are part of an unmarried couple, here are some questions to consider:

1) Will you combine your finances or handle them separately?

2) If you merge finances, will you pool your income or set aside a portion for your own use?

3) If you share household expenses, will you split them equally or apportion them according to income, usage or some other criterion?

4) Will you open joint chequing and credit card accounts?

5) If you manage finances as a couple, will this include long-range retirement planning or just short-term household expenses?

Joint bank and charge accounts carry some big drawbacks. You each become fully responsible for the entire amount of any joint debt. Creditors can seize the funds in a joint account to satisfy one partner's debt. In addition, one partner can drain the funds from a joint account or fail to pay credit card charges, ultimately damaging the other's credit rating.

Can you forge a happy life as an unmarried couple, yet protect yourself financially? Before combining finances, candidly discuss your financial values and goals. Be sure you agree on financial priorities and have a spending plan. Addressing these issues upfront can provide a solid foundation for all of your financial decision-making and subsequent actions.

If you share a joint checking account, protect yourselves by opening one requiring both signatures for withdrawals. Clearly define the expenses it will cover. Keep good records of account activity, otherwise it may be difficult to verify your contribution to shared expenses if the relationship ends. If you hold joint credit cards, close each account if you part company. Do not just split up the cards "' remember, you are still each fully responsible for all charges on any joint account. Also, keep in mind that it is important to establish and maintain your own separate credit histories.

If you plan for retirement together, there are several options worth consideration:

* Investigate the availability of joint and survivor benefits

* Increase your personal savings

* Cross-own life insurance policies

* Designate each other as the beneficiaries of life insurance policies and registered plans (RSP's, etc.)

Consider protecting yourselves with a domestic partner agreement. This is a written contract between unmarried partners that addresses the sharing of income, expenses and property. It supports each partner's ownership rights and outlines his or her intentions for the distribution of property if the relationship ends or in the event of the death. For assistance, consult a lawyer.

There are probably as many ways of handling finances as there are unmarried couples. Some couples maintain separate finances. Others share some costs, while keeping income and other expenses separate. Still others pool all income and expenses. Although not something one would otherwise prefer to do, it would be a useful exercise to contemplate the relationship unwinding in five, ten or twenty years, and envisioning today -- while you are unemotional and objective -- how income, expenses and property should be handled were a separation to occur. This should be discussed with your partner, and hopefully agreement can be reached. By having this agreement drafted by a lawyer, and signed by the parties, the potential for a costly battle down the road can be significantly reduced. And remember, no one whom has ever ended up as a party to these ugly legal proceedings "ever thought it could happen to them" -- so forget how much in love you are today, and contemplate the possibility of stormy weather down the road. And prepare for it with a domestic partner agreement.

The information in this article is not intended to constitute legal advice, and it may not be relied on for such. Please seek specific professional advice prior to relying upon any information discussed herein.