Older couples living together without benefit of marriage
While living together seems like a simple arrangement, from a financial planning perspective they argue it can be complicated. Whether you’re talking about insurance coverage, inheritance taxes, credit or debt or the breakup of the relationship, the legal footing for handling these topics doesn’t formally exist and requires complex planning. Here’s a Vanguard interview with Sheryl Garrett, a Certified Financial Planner.
There are many reasons that older adults may choose to cohabitate rather than getting married. Financially, there are some tax disincentives, the possibility of losing military, Social Security (although depending on your age you may not lose Social Security benefits-see the linked article) and pension benefits.
Roughly 10 percent of heterosexual unmarried cohabitating partners are between the ages of 55 and 64 according to the 2012 Census Bureau. In fact 47 percent of cohabitating adults are 35 years old and older. There are many differences between young couples moving in together as a precursor to marriage and older couples but the main one is financial. Young couples usually do not have much in financial assets but older couples often bring substantial financial assets into the relationship and that along with any children can greatly muddy the waters should there be a death or a breakup of the relationship. Here’s a list of some suggestions before making the move to move in.
Whatever the reasons couples have for not marrying, if the couple is planning on the arrangement being long term they should complete estate plans, draft durable powers of attorney giving the other authority to handle finances and property plus a power of attorney for health care or medical decisions that kick in when one partner is incapacitated.