Welcoming Love at an Older Age, but Not Necessarily Marriage By Stanley Luxenberg April 25, 2014 FOR years,

Stephen Ward, 68, struggled as his wife suffered from multiple sclerosis and died. Then in 2007, he met Phyllis Kellerman, 70, and they started dating. The retired couple discovered that they had much in common. Both loved the theater. Both had long happy marriages and children. Mr. Ward and Ms. Kellermans late husband had been teachers in the New York area. The couple soon fell in love. Ms. Kellerman moved into Mr. Wards house in Boynton Beach, Fla. Though they talked about marrying, the couple decided against it. Both planned to leave assets to their grown children, and they worried that marriage could create legal problems for heirs. The partners also were concerned about provisions in the tax code that sometimes force married couples to pay more than single people. We decided to act as married people but not to get a marriage certificate, says Ms. Kellerman. Americans have long been retreating from marriage. While more people of all ages are living together, the growth of unmarried couples is fastest among the older segment of the population. In 2010, 2.8 million people aged 50 and over cohabited, up from 1.2 million in 2000, according to the United States Census Bureau. For many, the decision to remain single is a matter of money. A partner who remarries stands to lose alimony, Social Security or a survivors pension. Young people may be eager to marry for love, but older couples are more practical and worry about paying the bills, says Pepper Schwartz, professor of sociology at the University of Washington. For young people, living together tends to be a transitory arrangement, says Susan L. Brown, professor of sociology at Bowling Green State University, who has studied cohabitation. Young unmarried couples typically have less education and lower incomes than their married peers. Those living together remained single because they could not afford to buy a house and settle down. Such young couples often live together for a year or two and then get married or break up. Ms. Brown found that older couples were not any poorer than their married peers. Older people lived together unmarried for an average of nine years. For older adults, cohabitation is very much a long-term alternative to marriage, says Ms. Brown. Lawyers urge unmarried clients to draw up agreements specifying which partner is responsible for expenses and who will inherit assets. Many couples ignore the advice and share expenses informally. But the loose arrangements can result in messy legal problems if the couple splits or one partner dies suddenly. Lawyers tell stories of couples

who lived together for years in a property owned by one partner. When the owner died, children claimed the property and evicted the survivor. To avoid such situations, lawyers suggest drawing up agreements that will protect both partners. Even if they dont draw up formal agreements about living arrangements, some couples insist on signing health proxies, giving each the right to make medical decisions for the other. Medical issues have been a concern for Marie Macchia, 70, and Jack Laurie, 77, who have been together for eight years. They divide their time between Ms. Macchias home in Manhattan and Mr. Lauries house in Miller Place, on Long Island. The couple worried that if one partner became sick, hospitals could block access to records or make it difficult for the healthy partner to visit. The proxies are to prevent such problems. We want to be ready if something happens when our families arent around, says Ms. Macchia. Whether or not they sign documents, many older couples remain single because of financial issues. Potential medical burdens pose a special problem, says Howard S. Krooks, president of the National Academy of Elder Law Attorneys. Under the law, married people are responsible for the debts of spouses. Nursing homes can cost more than $14,000 a month in high-cost states, says Mr. Krooks, and Medicaid covers expenses only after the couple has exhausted most of their assets. Mr. Krooks describes a well-to-do client who lived with a woman and decided to marry. After learning about the potential medical costs, the man elected to remain unmarried. The client agreed to support his partner and leave assets to her in his will. He wanted to provide for her, but he was unwilling to take on the risk of covering medical costs, says Ms. Krooks. Many couples refuse to marry because of concern about protecting the inheritances of children. While prenuptial agreements can stipulate who heirs will be, the partners often worry that legal documents may not be airtight or could be changed after a spouse dies. In some states, property owners are required to leave one-third or more of their assets to surviving spouses. Even if they prove secure, prenuptial agreements can be expensive to draft. You can easily spend $3,000 to $10,000 because both parties must have lawyers, and they must negotiate the provisions, says Frederick Hertz, a lawyer in San Francisco. A marriage can result in families losing student aid, says Mark Kantrowitz, senior vice president of Edvisors Network, which operates education websites. Mr. Kantrowitz gives the example of a single parent who earns $50,000 and has a child in college with $20,000 in grants. If the parent remarries, the student could lose $3,000 in aid for every $10,000 of annual income that the new stepparent brings to the household. Mr. Kantrowitz has encountered situations where remarried partners insist on prenuptial agreements saying that the stepparent will not contribute to college tuition. But the child loses financial aid anyway. The prenuptial agreements are between the parents and not binding on colleges, he says.

For years, Congress has wrestled with provisions that impose higher taxes on married couples. For many people, the marriage penalty has been reduced, and in some cases married couples pay lower taxes than single peers. But the tax code is still full of provisions that place burdens on married couples, says Katherine Dean, managing director for wealth planning for Wells Fargo Private Bank. The penalties are particularly severe for high-income taxpayers. If unmarried partners each make $405,000, they will pay taxes at a rate of 33 percent. But if the couple marries, they will pay at a rate of 39.6 percent. Middle-income people can also increase their burdens by thousands of dollars when they marry. Under the rules, older unmarried partners who each earn $60,000 may be able to deduct up to $6,500 in contributions to an individual retirement account. But if the partners married, their joint income would be too high to take any deduction. In another wrinkle, two single people can each use capital losses to offset $3,000 in ordinary income annually or $6,000 for an unmarried couple. But if the partners marry, they can offset only $3,000. Some couples delay marriage because of Social Security. Under the rules, a survivor is entitled to a share of a late spouses benefits. But survivors who remarry before age 60 lose the benefits. Government pensions also cause some people to postpone marrying, says Linda J. Ravdin, a lawyer in Bethesda, Md., whose clients include federal civil servants. Under the rules, a survivor can be entitled to half a spouses pension. But if survivors remarry before age 55, they lose the pensions. Survivors of military personnel can face especially steep penalties when they remarry, says Maryan K. Jaross, a financial adviser in Denver. She has counseled a close friend who obtained a pension after her husband died while serving in the military. The widow remarried. She lost the pension, gave up health insurance and the right to shop at a base commissary, where products sell at discounts. Her new husband died two years after the marriage, leaving her a widow with no support. The widow met another man, and this time she is cohabiting. She is a staunch Catholic, but for now they are just living together, says Ms. Jaross.