Autumn Years Fall 2024

FINANCIAL PLANNING

Cohabitating Rather Than Remarrying? The Importance of Having a Plan for Your Assets By Nima Ashtyani

The number of Americans who are no longer married either from being widowed or divorced has reached record levels, causing new partnerships to form among older Americans. The U.S. Census Bureau reports that more than half of all older adults have only married once, opting to stay legally single in their future relationships. According to a study from researchers at the National Center for Family and Marriage Research at Bowling Green State University, during later life, cohabitation appears to operate as a long-term alternative to marriage, rather than a first step down the aisle.

C ohabitating can have unforeseen and unintended consequences with out a legally recognized marriage or domestic partnership certificate. For instance, your assets are not mutually in heritable without careful estate planning, including a living-together or cohabita tion contract. This contract type can be specific and cover one transaction, such as purchasing a new home. The contract can also encompass every aspect of your prop erty and finances, including asset distribu tion in the event of incapacitation, death or breakup. There can also be unintended tax consequences for estate planning with unmarried partners. Many believe they can address domes tic decision-making, such as permissions for owning pets, entertaining guests and minor tasks like who will do the dishes in a casual contract, but it is unlikely to be enforced by the courts. If you are an unmarried couple, it is safer to draw up a comprehensive agreement, enforce able by the courts, to see you through your lives together. However, you will not want to co-mingle personal and financial clauses in a single contract as it may ren der the agreement unenforceable. CREATING A LIVING-TOGETHER OR COHABITATION AGREEMENT For estate planning purposes, a compre hensive cohabitation agreement includes all assets and property owned before the relationship and another for any acquisi

each other after death. A legally binding cohabitation contract must work with existing plans for already named heirs. A qualified estate planning attorney can draw up this contract and make necessary changes to current estate plans to avoid future legal conflicts. Like all estate planning documents, the regular review of its content to account for major life changes or preferences is crucial. If you plan to make substantive changes, avoid personal and family con flicts through open communication chan nels and mutual understanding. A newer, unmarried partner of a beloved parent may make adult children suspicious of his or her intent. Cohabitating is becoming more popular; however, as states adjudicate separations and inheritance, there is much to consider about planning property and asset control. To protect and provide for your partner and your adult children, con sult an estate planning attorney about a cohabitation contract in conjunction with your estate plan to ensure your docu ments reflect your wishes and are legally enforceable.

tions during the relationship. The property and asset division is much like a prenuptial agreement. Remember, joint obligations to a mortgage company or a landlord do not create a contractual relationship or entitle you to a property settlement in the event of death or the parting of ways. With non-marital agreements, each part ner should also have a valid will for the state in which he or she lives. A cohabitation contract often includes rules regarding gifts received, living expenses, property purchases, inheritable rights and a method for dispute resolu tion that may arise later, typically through mediation. Having a cohabitation agree ment in writing can avoid a host of future legal issues and can be developed in the spirit of two fair-minded individuals clari fying the understanding of a partnership. remarry because it can have consequences to social security income, pension benefit awards, alimony (as part of a divorce set tlement), tax consequences and rights of survivorship. A new spouse’s income may disqualify a child for college financial aid or, in the case of a disabled child, impact the eligibility for government assistance programs. Because many seniors and near seniors live together in non-legally recognized ways, estate planning can create chal lenges when partners want to provide for REASONS MANY PREFER TO STAY SINGLE Many older Americans prefer not to

Nima Ashtyani is a partner with the Stratton Ashtyani Law Group in Frank lin Lakes, NJ (www.LawGroupSA.com). Nima focuses on estate planning, elder

law, estate and civil litigation, and dispute resolu tion. This article is provided for general information only; it is not legal advice and should not be acted on before consulting with an attorney.

20 AUTUMN YEARS I FALL 2024