Estate Planning for Unmarried Seniors
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Earlier this year the National Survey of Family Growth reported an increase in cohabiting unmarried couples between the ages of 15-44; the trend has grown faster among seniors. The United States Census Bureau reported over 230% increase in cohabiting Americans aged 50 and over from 2000 to 2010.
Living with a life partner and choosing not to marry may create a few estate planning challenges, but some seniors are avoiding marriage to be able to maintain governmental or other benefits, or avoid certain legal responsibilities for a spouse’s medical care .
Why are seniors cohabiting and not marrying?
1. Medical expenses. If couples marry, the surviving spouse may inherit debt. A spouse is legally responsible, to a certain extent, to pay for the other spouse’s medical or long-term care. A private nursing home room in North Carolina starts at approximately $4,000 monthly, according to 2013 reports from Genworth. Medical care adds up quickly, and outstanding debts could devastate the assets of a surviving spouse.
2. Social Security benefits. Partners with previous marriages may postpone nuptials with a new partner. A surviving spouse is entitled to a share of a deceased spouse’s Social Security benefits, however, survivors who remarry before age 60 are no longer entitled to the benefits.
3. Alimony loss. Partners who were previously married may lose alimony benefits if they re-marry.
As more senior couples choose to cohabit and avoid marriage, estate planning problems may surface. Couples may revise their respective Wills to ensure certain assets are left to their partner, but a Will does not cover all of the planning that’s necessary. Even more so than married couples, unmarried couples need durable powers of attorney and health care powers of attorney to ensure the each can make decisions for the other if needed. Perhaps trusts are needed to make sure that the surviving partner receives financial support, while providing that the deceased partner’s children will ultimately inherit the remaining assets.
An elder law attorney may recommend special trusts that can help offset the costs of medical care or day-to-day living expenses, while at the same time preserving eligibility for government benefits and protecting assets for beneficiaries.
Couples can also discuss with a lawyer the best ways to hold title to real property. (If one partner owns the home where the couple resides and the owner passes away, the surviving partner will not have legal rights to stay in the home. Unless provisions are made, the home may be passed along to family through North Carolina intestacy law.)
Estate planning needs change over time. Although life changes like a new baby, relocation, and marriage may prompt an estate plan revision—sometimes not getting married should trigger a review.
