Shacking Up for Seniors
Divorce, like everything else, becomes more complicated with age. That is because there are usually more assets, like real estate, businesses, stocks and pensions to sort out.
Now comes word that more and more seniors are opting to live together without benefit of matrimony to protect their assets and avoid the financial entanglements of marriage and divorce.
There are problems created by living together however. If one party owns the house, and that party dies, for example. The other party can be thrown out by the heirs and end up homeless.
Or if both parties have contributed to the mortgage and repairs of a house for several years, and they split up, this can lead to claims and litigation.
There are two legal solutions to these situations depending on whether you want to get married or not. If you are living together, a Cohabitation Agreement can set out rights and responsibilities even though you are not married.
With a Cohabitation Agreement, the parties can fix their respective rights and liabilities with respect to property and other matters and thereby avoid conflicts later. They can ensure their living arrangement will not constitute a common law marriage in those states that still allow it.
The parties can determine how they will pay household bills. For example, they can set up a joint bank account to which each contributes a fixed amount per month. And they can agree that purchases made with these funds will be joint property.
A Cohabitation Agreement will usually define separate property. For example, separate property may include all assets at the beginning of the cohabitation plus gifts and inheritances, plus earnings before and during the cohabitation.
You can agree that joint property will be property purchased together during cohabitation with each owning a certain percentage of joint property. Commingled property can be presumed to be joint property. Upon termination of the agreement, that is when and if you cease to live together, joint property will be dividing according to percentage of ownership. Here is an example of a Cohabitation Agreement.
If you wish to marry, then a Pre-Nuptial Agreement can your protect assets, including real estate, stocks, pensions and business interests.
In connection with both Agreements, you may need to change deeds, insurance policies, pension beneficiaries and your will to make sure everything goes to the right person in the event of death.
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