Once quite rare, cohabitation between unmarried seniors has become increasingly common.

Since 2005, Pennsylvania law has prohibited new common law marriages. But unmarried seniors living together can take steps to protect the rights of their partners in a number of areas.

Estate planning

If you have no spouse, your partner has no rights to your estate if you die without a will. You should have a will or trust that specifies what you wish your partner to receive upon your death.

For those who have children from a prior marriage or relationship, a common plan is to provide that the unmarried partner will receive certain assets, or a certain portion of the entire estate, with the rest passing to the children. Another alternative is to have everything pass to the partner, who agrees to split it among the couple’s children in agreed percentages.

While spouses can receive property free from estate tax, that’s not true for unmarried partners. So if you have an estate worth more than $1 million (including life insurance proceeds), you should speak to a knowledgeable attorney about what steps you can take to minimize federal estate tax in the event you die next year, when new rates are scheduled to take effect.

If you want your partner to be able to act for you in financial matters if you become incapacitated, make him or her your agent in your durable power of attorney. Likewise, if you want your partner to make health care decisions for you if you are unable, you need to specify that in your health care power of attorney.

Real estate

If you die or go to a nursing home, do you want your partner to be able to live in your house?

People often allow for that by putting the partner’s name on their deed. But this solution can prevent the children from inheriting the house. A better solution is often to grant the partner a life estate in the property, meaning that he or she owns the property while alive, with ownership passing to the children thereafter.

Long term care

An advantage of being unmarried is that if your partner goes into a nursing home and applies for Medicaid, none of your assets are considered available to your partner.

The downside is that while a spouse can receive a certain portion of a Medicaid applicant’s assets and income, an unmarried partner has no such rights. The applicant’s entire estate is subject to being spent down before Medicaid pays benefits, and virtually all of the applicant’s income will go toward the cost of care.

What’s more, transfers of assets between you and your partner (gift of money, putting the partner’s name on a deed) can make the transferor ineligible for Medicaid if the transfer is done within five years prior to application. Joint assets can cause other complications.

An elder law attorney can help you sort out the issues and make a plan that suits your circumstances.

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