Who loses most in breakups?

Everything looked promising for Lauren Laughead and her boyfriend when they moved from Boston to Dallas in 2002 for his job. They had been living together for nearly four years and were planning to marry. They even bought a town house in Dallas.

But their dreams were derailed two years later when her boyfriend ended the relationship. "Since the property was in his name, and he was at fault for the breakup, I just moved out," says Ms. Laughead, who handles advertising for a law firm. "I paid off my part of the credit card and left it at that. I had helped pay part of the mortgage for a year. I lost that money. He's got equity."

Her experience illustrates a little-noted peril of cohabitation: the potential negative financial consequences of breaking up. When unmarried couples who have been living together part company, women are substantially worse off economically than men, according to a study in the current Journal of Marriage and Family. Men's household income drops by 10 percent, while women lose 33 percent. The percentage of women living in poverty increases from 20 percent to 30 percent, while men's poverty level remains relatively unchanged at about 20 percent.

Even the 33 percent drop for women strikes some financial experts as too low. "That's a nice statistic, but I think it's far worse than that," says Doris Theune, senior vice president of Bryn Mawr Trust Co. in Bryn Mawr, Pa. "I live in a very affluent area, yet I see women all the time lose out across the board. It's the same as divorce. If women have given up a career, or if they have relocated, then they lose."

More than 40 percent of American women under the age of 45 have lived unmarried with a male partner at some point, according to the US Census Bureau. In 2000, 9.7 million Americans were cohabiting with an unmarried partner of the opposite sex, while 1.2 million lived with a same-sex partner.

Unlike divorce, cohabitation offers no economic protection for either party. For married couples, there are precedents, formulas, and divorce court, says Debra Neiman, a certified financial planner in Watertown, Mass. "For unmarried folks, there is no such playing field. It's up to the couple at the onset, or early in the relationship, to set the stage and make preparations for what would happen in the event of dissolution."

Yet starry-eyed young lovers don't like to think of that possibility. "It's amazing how many of my friends in their early to late 20s go through this," says Laughead, referring to her breakup. "A lot of us go into a [live-in] relationship with a positive outlook. We think, Oh, nothing bad will happen. The girl typically thinks, this is going to be great, we're [eventually] going to get married."

Among Laughead's friends, the woman is typically the one who moves out. She must find a place to live and buy furniture. "You realize, Oh, my college furniture - I sold that," Laughead says. "Or you have a couch and a headboard and no mattress. Those are expenses you don't think of."

Her ex-boyfriend incurred expenses, too. "When I moved out, all the kitchenware was mine," she says. "He came home and didn't have any kitchen supplies anymore."

But because her boyfriend paid the bulk of the down payment, the town house was in his name. "We figured when we got married, we'd change it to include me," she says. He was also the primary account holder on the utilities. After she left and needed her own telephone and utilities, she had no record of having a good credit standing.

Unmarried couples who want to buy a home should have an attorney draft a property agreement, says Ms. Neiman, coauthor, with Sheryl Garrett, of "Money Without Matrimony," to be published next month. "It could simply say, 'In the event of a breakup, Party A has the right of first refusal to buy the property from Party B.' It could be more explicit and say, 'The purchase price will be based on the average of two or three market appraisals.' "

Some women discover less obvious economic penalties when cohabitation ends. "They're not saving as effectively for themselves," because they see themselves as part of a team, says Gemma Allen, a family lawyer in Chicago. [Editor's note: The original version failed to identify Allen.]

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