Back in the dark ages, before the 1960s, the phenomenon of unmarried couples living together used to be somewhat rare. That’s definitely not true anymore, especially among aging boomers. The number of men and women aged 50-plus who decide to live together and not get married is on the rise – but what many of these cohabiting couples may not know is that, unless they plan and prepare carefully, they may be heading off a cliff of legal and money troubles in the event of a health problem or other personal crisis.
Couples Living Together Face a Host of Difficult Issues in a Crisis
We just discovered this recently published article on the subject on the NextAvenue website, and it definitely caused us to stop and think. Written by a Texas estate planning attorney named Brad Wiewel, the article points out the stark reality that “estate planning laws are written to favor married couples,” which means that unmarried couples will face a host of legally and emotionally difficult issues in a crisis situation. “For example,” says NextAvenue, “if a married person is rushed to the hospital unconscious and hadn’t prepared a health care power of attorney giving the other spouse the right to make medical decisions on his or her behalf, that husband or wife will probably be allowed to make them anyway. But if an unmarried couple is in this same situation, the law will consider them to be ‘legal strangers.’” The partner will have no right to make medical decisions on behalf of the one who is ill.
Attorney Wiewel provides several more what-if scenarios and possible solutions, and we’ll get to those in a minute. First, though, we were curious just how common it is to find unmarried boomers deciding to live together. It turns out, according to this New York Times article from 2017, that the numbers are big and getting bigger. “The number of people over 50 who cohabit with an unmarried partner jumped 75 percent from 2007 to 2016, the Pew Research Center reported — the highest increase in any age group,” says the Times. Despite the image of cohabitating couples being on the younger side, the number of men and women over age 50 who are living together topped 4 million in 2017, says Pew – versus 2.3 million in 2007. People choose to live together for both practical and emotional reasons. “In later life,” the New York Times reports, living together “brings companionship and wider social circles, not to mention sexual intimacy, at ages when people might otherwise face isolation.” Sharing a household is also an economic boon to lower income seniors, especially for women, who are at higher risk for poverty. Some couples may also choose to live together and not remarry to protect their family members, keeping their estate separate from that of their partner.
Couples Living Together Need to Prepare for These Situations
However, couples living together do need careful planning. In the NextAvenue article, Brad Wiewel shares at least five scenarios (besides the hospital situation cited above) where unmarried, cohabiting partners need to make special preparations to avoid potentially catastrophic legal and economic consequences in a crisis. Here’s a brief overview.
- Cases of Income Imbalance. This commonly occurs when an older, wealthier individual is living with someone substantially younger, with the understanding that the wealthier one will support the couple’s lifestyle. “Suddenly, the older partner becomes ill and can no longer manage the couple’s finances,” Wiewel writes. “Under such a scenario, unless the older partner had given the younger one financial power of attorney, that older partner’s assets will probably be frozen by his or her financial institutions; the younger partner won’t be able to access them.” Unless the couple had planned ahead with a durable power of attorney and other documents, the younger partner could lose control of those assets and even face eviction.
- Lack of HIPAA Release Forms. If you’re not a spouse, and you have no HIPAA release form, doctors and hospitals will refuse to share medical information about the person you’re living with. “You can find HIPAA release forms online, but it’s best to get them from estate planning attorneys to ensure they’re up-to-date and correct,” says Wiewel. This also applies if your partner passes away: couples should prepare a document giving the other partner the right to make final arrangements if needed.
- Dying Without a Will. If a cohabiting couple fails to prepare a will or a trust, many states will not recognize the rights of a surviving unmarried partner. Regardless of the wishes of the deceased, assets will generally go to blood relatives. By contrast, married couples typically enjoy legal protection, especially in community property states such as Washington.
- What Happens to the House. “Although laws in some states give a surviving spouse the automatic right to occupy the couple’s home for life, that’s not the case for a surviving unmarried partner,” the article states. “An unmarried couple could avoid this problem if the partner who owns their residence gives the other this right by specifying it in their will or living trust.”
- Retirement Accounts and Insurance Policies. This should be obvious, but it’s often overlooked. If an unmarried partner dies, the other partner won’t be legally entitled to company-provided life insurance proceeds or 401(k) assets unless he or she was designated as the beneficiary. Otherwise, if there’s no living beneficiary, the assets will usually go to the deceased’s blood relatives. “Beneficiary designations also control Individual Retirement Accounts (IRAs) and privately-owned life insurance. So, unless the unmarried partner is named as the beneficiary for those, he or she won’t be entitled to those funds either. The lesson for couples living together: protect your finances and your emotional health by getting your estate-planning documents in order.”
Everyone Needs a Comprehensive Retirement Plan
Whether living together or on your own, married or single, preparing yourself legally for retirement is essential – but it’s not the whole picture. Even the right legal protection accompanied by a decent financial plan is insufficient. At AgingOptions, our unique planning approach involves the total range of retirement living, which, along with legal and financial elements, encompasses your medical preparation (both short-term and long-term), your housing strategy (again, both for the immediate future and for the years ahead), and your relationships with those closest to you. When woven together, these facets comprise an AgingOptions LifePlan. With a retirement strategy like this in place, you and your loved ones can face your retirement future with a sense of confidence and peace of mind you never thought possible.
We invite you to find out more about LifePlanning – without cost or obligation – by joining Rajiv Nagaich at an upcoming LifePlanning Seminar. This lively and information-packed session will open your eyes to the power of a LifePlan. You’ll find a calendar of currently-scheduled seminars here on our Live Events page. Bring your family and bring your questions – and meanwhile, age on!
(originally reported at www.nextavenue.org)