Mellody Hobson: Tips for Cohabitating Couples

Aug. 27, 2005 — -- The number of couples choosing to live together sans marriage has increased dramatically over the past several years, and seniors are no exception. According to the Census Bureau, the number of cohabitating couples has nearly doubled in the last decade.

Unlike couples in their 20s, who may decide to live together as a step toward marriage, many couples in their 60s and older choose to move in together but have no intention of taking that walk down the aisle.

While every couple has different reasons, many seniors are choosing to enter into domestic relationships without the legal obligations. For some, it is the memory of a previously failed marriage (more second marriages end in divorce -- 60 percent versus 50 percent). For others, it may be the anxiety of an expensive wedding. But for many, it is the fear of financial loss and the desire to protect their current assets.

Many seniors who depend upon income from a previous spouse's pension, Social Security or medical insurance fear the financial loss associated with remarriage. Others worry that remarriage will pose unintended risk to their children's inheritances.

The key factors to weigh are:

Before you jump over the threshold, consider drawing up a cohabitation agreement. Think of this like a "pre-nup" agreement without the "nup." This document will clearly spell out all ownership and financial obligations for individuals living with a partner that is not a spouse.

By making it crystal clear from the beginning, there can be no legal hassles or financial losses if the couple decides to split.