Express Your Wishes in Writing (and Video)
Just like married couples, it's important for people living together to draw up a number of personal, legal and medical documents — preferably by appropriate professionals, such as tax experts, attorneys or estate specialists. Examples of the documents you may need include a power of attorney, a medical directive (such as a living will or health care power of attorney), and a last will and testament.
For older couples, if one or both of you has already experienced health issues, it's vital to think about whether you're comfortable giving your partner health care power of attorney. If you decide your partner shouldn't be your power of attorney, you can make arrangements for a health care proxy instead.
You should videotape your desires, stating that you are of sound mind, and indicating the date of the recording. If there is any doubt about your wishes or your competency, a videotape could help to blunt any questions or legal challenges that may arise among health care professionals, family or friends, according to legacy attorneys Danielle and Andy Mayoras, authors of Trial & Heirs: Famous Fortune Fights.
Think Twice About Co-signing Any Loans
If you co-sign on any loans — from credit cards to automobiles to mortgages — you are legally liable for the entire debt. This is particularly a sore point if the relationship ends and the debt still remains.
Even if you and your significant other part ways with an agreement saying one of you is solely responsible for certain bills, if those obligations go unpaid, creditors can still go after each of you to collect any debts for which you both co-signed. So be cautious about co-signing. In the event of a breakup, be prepared to work out a deal to pay off joint debts as quickly as possible to avoid potential damage to both of your credit ratings.
With a car, consider what would happen if either of you got into an accident and someone was hurt. Since car ownership dictates liability, it's "cleanest for each car to be insured by each car owner for liability purposes," Morrison says.
If you plan to buy a home together, tread carefully financially. Take extra precautions to get much-needed paperwork in order.
Join or Renew and Choose Your Gift
- Offer ends Dec. 17
- Discounts on travel and everyday savings
- Subscription to AARP The Magazine
- Free membership for your spouse or partner