Until recently, when thinking of a couple living together without being married we assumed it was a young couple. In fact, many seniors who want to live together choose not to get married but instead cohabit. According to Forbes, “In 2006, 1.8 million Americans aged 50 and above lived in heterosexual “unmarried-partner households,” a 50% over from 2000. Cohabitation seniors – unmarried couples – is the fastest-growing demographic group unmarried partners over the age of 65 have increased by 70%.
There are a variety of reasons why senior couples choose to live together without marriage, but the two key reasons seniors cohabit are financial and family relationships. Often senior couples want to protect their personal assets and their social security benefits, and so choose not to marry but instead live together. Some couples try to avoid family objections to a later in life relationship and decide against marriage so their children and grandchildren are not upset. However, there are also estate planning risks for senior couples who decide to cohabitate instead of getting legally married.
1. If one person becomes ill and cannot make their own medical decisions, the other person in the relationship has no legal standing to make medical decisions or to even visit their partner if the family objects.
2. If one partner has more assets and contributes more financially to the relationship and later dies, there is no default legal protection for the surviving partner like there is for a surviving spouse. If the deceased partner owns the house the couple lived in, the surviving partner could lose their home as well as their income.
3. Cohabitating seniors are not entitled to state and federal tax exemptions that are available to married couples.
4. Cohabitation does not offer the same Medicaid Community Spouses protection that marriage provides.
5. Senior living together cannot inherit retirement plans or investments, unless they are named beneficiaries.
1. Advance Directive and Health Care Proxy
If you become incapacitated, who do you want to make your health care decisions? If you are cohabitating and not legally married, your partner is not afforded the same ability to make medical decisions on your behalf. A Healthcare Power of Attorney is a durable power of attorney, a legal device that allows one person to indefinitely make decisions on behalf of another.
2. Wills and Trusts
Do you own a home together, are you living in your partner’s home, have you co-purchased a car or other property together? If a couple is not married and there is no will or trust in place to designate beneficiaries, Illinois intestate laws go into effect and the court will determine who inherits your partner’s belongings. If you die without a will in Illinois, your assets will be transferred according to the state’s “intestate succession” laws. Who inherits what will depend on whether or not you have a living spouse, children, parents, or other close relatives when you die. Intestacy laws divide a person’s property based on the family relationships that are in existence at the time of their death. Wills and trusts can be set up to ensure that if your partner dies, the assets you share together are passed to you, and not to your partner’s children or heirs.
3. Power of Attorney
If you are single but with a life partner, who do you trust to make financial decisions on your behalf? Who do you trust to pay the bills and take care of your finances if you become incapacitated? A durable power of attorney is used to allow the designated person to handle affairs in a certain area of the principal’s life, such as in financial matters.
4. A Living Will
A living will is a document that expresses your final wishes to your healthcare providers and family as they relate to your continued healthcare and any life-sustaining measures. Whether married or unmarried this useful tool can give guidance to your medical power of attorney.
Do your beneficiaries need to be updated? When your life circumstances change, it’s important that you update your designated beneficiaries on all financial documents with named beneficiaries such as insurance policies, bank accounts, retirement accounts and IRAs.
If you have questions about protecting your partner if something should happen to one of you, contact an experienced estate planning attorney for guidance and to explain the laws in your state.
Cohabitating senior couples have unique concerns in estate planning that married couples do not have. Prepare for the future by contacting an experienced estate planning attorney at Estate & Probate Legal Group in Lombard Illinois at 630-864-5835.