Estate Planning Challenges That Come With Cohabitation

Cohabitation without marriage has become an increasingly common way of life for people in the United States. For older individuals, cohabitation is often intended to be a way to enjoy the companionship of another without risking losing assets for the future generation. While attempting to preserve assets, however, cohabiting couples frequently overlook common pitfalls when putting together their estate plans. The following are some estate planning challenges that go hand-in-hand with cohabitation.  Challenges Involving Medicaid Cohabitation does not offer the same protections under Medicaid rules as marriage. Under Medicaid rules, a person must have less than $2,000 in resources to qualify for Medicaid. Some exceptions, however, exist to this rule which permit the protection of assets. One exception to this limit involves community spouses. When a person is institutionalized at a facility, the spouse who still resides at home cannot end up destitute. Substantial allowances are permitted for community spouses. Community spouse exemptions do not include unmarried partners who lived together. Allowances are only for spouses.  Lack of Legal Protection When a cohabiting person passes away, no legal system exists to protect the surviving cohabitor as if they were a surviving spouse. After all, when a married person passes away, [...]