A growing number of seniors today are choosing to live together without getting married. For many, this arrangement makes financial sense. Cohabitation allows older adults to maintain benefits from previous marriages, avoid inheriting each other’s financial burdens and address concerns from adult children about their inheritance. However, cohabitation comes with its own set of legal complexities. Without the legal protections offered by marriage, cohabiting seniors must take proactive steps to safeguard their rights and ensure that their wishes are honored. Our team at Wilson & Wilson outlines the legal steps every cohabiting senior should consider.
Consider a Cohabitation Agreement
Signing a cohabitation agreement can be beneficial for seniors living together. This document outlines the terms of the couple’s arrangement, such as what will happen in the event of death or separation.
Beyond practical considerations, it can also explicitly state the couple’s intention not to marry, helping prevent disputes or misconceptions about their relationship status. It is advisable to have a cohabitation agreement drafted or reviewed by a trusted attorney.
Plan for Healthcare Decisions
Cohabitation without marriage can complicate healthcare decision-making. If you or your partner become incapacitated, the other may have no legal authority to make medical decisions on your behalf. To address this, seniors should prepare specific legal documents to grant these rights:
Health Care Proxy or Durable Power of Attorney for Health Care: This document designates your partner (or another trusted individual) as your agent for making healthcare decisions.
HIPAA Release Form: This ensures your partner has access to your medical information, allowing them to stay informed and advocate for your care when needed.
By taking these steps, cohabiting seniors can confirm their partners have the necessary access and authority during medical emergencies, offering both peace of mind and practical security.
Update Your Will and Estate Plans
A will is important for anyone, but it is especially critical for cohabiting seniors. Unlike married couples, partners in a cohabitation arrangement generally have no automatic inheritance rights. By updating your will, you can clearly state your intentions regarding the division of your assets, including provisions for your partner if desired.
It’s also important to be explicit about shared property or possessions. For example, if you reside in a home owned by one partner, the will should outline what happens to the property upon their death to avoid disputes between the surviving partner and other heirs.
Establishing a Durable Power of Attorney
A durable power of attorney allows you to appoint someone, such as your partner, to handle your financial matters if you become incapacitated. Without this in place, a court may need to appoint a conservator or guardian, and the individual chosen may not align with your wishes. This document is particularly valuable for ensuring bills are paid, accounts are accessed and financial matters are managed seamlessly during times of incapacity.
Understanding Tax Implications
Seniors in cohabitation arrangements also need to address the tax considerations that come with being unmarried. For example, unlike married couples, cohabiting partners are not entitled to unlimited tax-free transfers of assets. Estate taxes or gift taxes may apply if you leave significant assets to your partner. Consulting an estate planning attorney can help you explore strategies to address tax liabilities while honoring your financial commitments to one another.
Plan for Peace of Mind
Cohabiting as seniors can bring many benefits, but it also requires careful legal planning to ensure your rights and wishes are protected. By addressing steps such as creating a cohabitation agreement, preparing healthcare documents, updating your estate plan and understanding tax implications, you can safeguard your future and avoid unnecessary complications.
At Wilson & Wilson, we help seniors create comprehensive and personalized legal strategies. Whether you’re looking to draft a cohabitation agreement or ensure your estate plan aligns with your intentions, we skillfully guide you through the process. Contact us today to schedule a consultation and gain peace of mind knowing your rights and future are secure.
.png "When a Beneficiary Predeceases You: What Really Happens and How to Plan for It")
