Financial and Legal Considerations for Seniors Considering Marriage

Financial And Legal Consideration For Boomers Marriage

What could be sweeter than spending the last chapter of your life with a loving wife or husband to have and to hold? While the idea of growing old together may be enough to entice baby boomers into a walk down the aisle for one last romantic hoorah, this leap of faith should be carefully considered. Kiplinger advises couples in love to get financial and legal advice about how that marriage certificate will impact taxes, adult children, estate plans, and legal exposure.

That old adage about the devil being in the details certainly applies to marriage and cohabitation. Boomers face unique challenges as they prepare for the prospect of ongoing asset management and healthcare costs. Many aging boomers will be forced to pay for long-term care that can quickly drain investment portfolios and savings accounts. Depending on the couple’s financial position, there can be advantages to remaining single as a way for one partner to hold onto assets while the other one taps into Medicaid to pay for financially crippling long-term care costs.

Below are a few ideas for seniors seeking advice about how to plan for a new marriage or cohabitation arrangement.

Prenuptial Agreements

A preferred tool used by many financial advisors and legal professionals is a prenuptial agreement. CNBC reports that this type of legal instrument states how assets will be distributed if a marriage ends or when one of the spouses passes away. One of the benefits of this agreement is that it allows both parties to allocate assets to adult children or favored charities.

A prenup can also be used for business owners as a detailed way to leave business holdings to business partners, children or spouses in the event of death. By planning ahead of time, the stress associated with distributing wealth after death can be largely eliminated.

It makes sense for each spouse to hire their own attorney to be sure their interests are protected.

Cohabitation Agreement

A cohabitation agreement is another option for unmarried couples who decide to live together. While, on the surface, living together might seem relatively safe from legal problems and potential inequities, that is unfortunately not the case.

Much like a prenuptial agreement, each party should retain their own attorney to review this important document prior to signing.

A few of the questions and potential conflicts this type of agreement addresses are listed below.

  • How much each spouse owes for living expenses
  • Whether the healthy spouse can remain in the house if the other spouse goes into a nursing home
  • The amount, if any, that the surviving spouse owes to heirs if living rent-free in a home they don’t legally own
  • Pertaining to a new home purchase, how much does each spouse pay and own
  • How much of the mortgage interest is each partner or spouse allowed to deduct
  • How long is a surviving spouse or unmarried partner allowed to stay in the home after the owner passes?

Tax Pros and Cons of Marriage


1. One spouse can sometimes shelter the income of the other spouse.

2. Increased total IRA contributions are possible via an unemployed spouse’s eligibility.

3. A lower tax bracket is possible for some couples filing jointly.

4. Being married can protect the estate from federal and state tax laws.

5. A married couple is allotted a higher level of charitable contributions.

6. As a married couple, you can maximize retirement benefits through benefit shopping.


1. Each spouse is legally responsible for every number their partner records on a joint tax return.

2. Combined incomes makes it more difficult to meet the 2021, 7.5% medical expense threshold for deductions.

3. If one spouse has a garnishment, the joint tax refund may be blocked or delayed.

Estate Planning

Marriage can complicate estate planning. Kiplinger‘s certified financial planner, Victoria Fillet, explains that it becomes more difficult to separate assets after you take those vows. States have different laws that can essentially render a will meaningless in terms of the amount left to a surviving spouse. For example, in New York, an estate is legally bound to leave 33.3% to the surviving spouse, unless the spouse formally waives that right.

Unmarried couples must make a will to protect their wishes. Far too many times, a surviving spouse is literally kicked out of their shared home within days or weeks of a partner’s death by heirs anxious to sell in order to claim their inheritance. Without a legal will in place, a grieving widow or widower can effectively face homelessness.

Granted, some couples never marry in their quest to simplify the paperwork and protect their estate, only to find out later that they are required to pay estate taxes that are not charged to a surviving spouse. The law states that a married spouse can inherit assets without paying estate taxes, while unmarried couples must pay substantial taxes. This single benefit explains why so many people opt for marriage over cohabitation.


There is no easy answer to the question of whether marriage is the right answer for seniors in love. Like most life-changing events, marriage should be carefully considered. The only advice that is absolute is that baby boomers should seek out the advice of qualified professionals to address the issues mentioned above before making this important decision.