There has been a lot of press in recent years about seniors divorcing. The AARP recently wrote about a Bowling Green study which found that divorce rates among people over 65 have tripled since 1990.
Holiday season is often engagement season and much to the consternation of adult children in their 40s and 50s, senior divorce is often not the end of their parents’ romantic road. Many of these children not only addressed their first holiday without a united set of parents but with a solicitation to include a new boyfriend or girlfriend in the festivities. The first response to that inquiry uttered outside the parent’s presence is often “Holy sh-t, he’s not thinking about remarrying, is he?”
This is hard space for everyone involved. Life’s script which is handed to us sometime between pre-school and kindergarten is that mom and dad once married stay together until death do them part and then, hopefully, the loving children get the “estate” when the survivor dies. The ubiquity of divorce has messed with the script at least emotionally. Another twist in the plot is when one parent dies and the survivor has the temerity to think that life can be more than pining to join the deceased in eternity. As we have come to see, these revisions in the script threaten the outcome of life’s play financially; as in: “It’s creepy enough that Mom is living with another guy but what if the guy makes a play for her money?”
There is no clear answer here except from one corner of the stage; the one occupied by the Social Security Administration. When one spouse dies, a surviving spouse is typically eligible to claim a survivor’s benefit. So, husband dies receiving the average benefit of $2,100 a month. The surviving spouse is usually eligible to claim half the decedent’s benefit for the duration of his/her life. BUT, if you remarry a new spouse before you reach age 60, you can’t get that benefit. Just waiting until 60 to remarry puts you in a different place as this slideshow illustrates.
https://www.marketwatch.com/visual-stories/how-social-security-s-odd-remarriage-rule-could-potentially-cost-you-thousands-of-dollars-01647547418
Social security is usually just one leg of a sound retirement plan. Let’s assume you are age 70 retired and recently divorced or a widower. You live in a $750,000 house without a mortgage and you have $2,000,000 equally divided between 401(K) and other securities. You hit the holiday party at your country club and meet a very charming 65 year old who is also now single. Your kids invite you for Christmas and you ask if they would mind if you brought this woman with you.
Picture yourself as the fly on the wall of your kid’s house. You see it as “just dinner.” But they don’t. Who is this woman? What is she after? Dad just lost mom or divorced mom. How do we explain this woman to our children? Suppose mom is still living and finds out this woman was in our house as a guest? Hate to say it, but senior men often don’t get it.
But let’s make things worse. Yes, they can get worse. Charming woman sticks around after the awkward holiday dinner. Dad talks about her all the time; how funny she is and how he enjoys travelling with her. This is the same father who never wanted to travel with your mother. But Princess Charming got him to rent a condo in Sarasota for two weeks in March. What did that cost?
If you are a senior of either gender and these paragraphs seem to ring a bell, realize that for your children, it is also ringing a bell; an alarm bell that Princess Charming may be invading the “family larder.” And realize as well that if you are the widow, your kids are going to be looking askance at any Prince Charmings you might be hanging out with.
Now, let’s assume things with Mr/Ms. Charming get serious. Discussions arise about moving into your $750,000 house. Even without a mortgage it costs $3,000 a month to carry and your significant other is not offering to pony up half even if he or she could. Now you wouldn’t be crazy enough to put Mr/Ms. Charming’s name on the house, right? But suppose something major happened and you needed to move on to assisted living? How long does your charming companion get to stay in your house and who will cover the $3,000 monthly nut? And who is going to be “managing” this de-coupling in a world where you are twice a day in physical therapy at Shady Acres Rehab?
Many seniors think they have this covered. “Why my daughter has a power of attorney and she will deal with it.” Maybe. Perhaps she will sit down and discuss a plan for a move and eventual sale of the home. Or perhaps she will have the locksmith instantly change the locks and have your lovely friend’s stuff strewn across the lawn or crammed into a damp storage locker.
If you are a senior and falling in love, don’t assume that your new spouse or “friend” is going to be an object of your adult child’s affection. In fact, with $2.75 million at stake you need to be careful that either or both may see your money as “their money” and not in a shared way. That observation is undeniably callous but ask any estate litigator just how callous things can get when there’s free money at stake.
Hate to say it and by now you see it coming. If you have assets and a serious boyfriend/girlfriend you need a plan and some legal documents that protect people. If you leave the house on a gurney, you don’t want to see your spouse or significant other to experience a forced evacuation while you are still being admitted to Shady Acres for treatment. On the other hand, if you end up three months later being told your future involves assisted living you probably don’t want the person who moved in 9 months ago sitting on your home equity indefinitely while you pay money to Shady Acres and to maintain the big house.
Then there is a nettlesome question of whether new spouse or significant other is “entitled” to part of your estate. Needless to say, this is also a contentious area where your children from the prior marriage are not anxious to be sharing with Prince or Princess Charming. And they are often either blind or indifferent to your desire to set aside something for this person who you care about and who tends to your needs on a daily basis.
As your new relationship forms and graduates to cohabitation, you need a plan and it needs to be in writing. It does not need to be irrevocable. In fact, that wouldn’t be wise. But taking the facts as we have described them and assuming that your significant other has rather “insignificant” resources of his/her own, perhaps your documents should specify what happens in the event of your death or evacuation to Shady Acres for repair and restoration. Perhaps your house should be put on the market after 90 days while you will cover that expense until it is sold. If your significant other fully cooperates in relocating and showing the house, he/she will receive from you $15,000 in relocation reimbursement. And, should you pass on, this person will receive $1,000 a month for every month the two of you cohabitated in the same house. So, six years is $72,000 and ten is $120,000. These numbers are offered by way of example only. Some would say they are two rich; others too thin.
Failing to do this invites a new actor into your house. The estate litigator. He/she is an expensive occupant and one whom neither your “friend” nor your children will enjoy living with. Too many people think that cohabitation in your 70s is much like things were when you shacked up with your first love in your 20s. The stakes are different unless you are as poor today as you were back then. And if you want to just trust that everyone will do the right thing, you may be in for a rude awakening.
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