Dear Penny: Will I Be Left With Nothing When My Partner of 50 Years Dies?

Dear Lost,

Lots of people will tell you that marriage is just a piece of paper. But that’s simply not true. Even if a couple is perfectly happy without that marital contract, there’s no getting around the fact that spouses are afforded a lot of benefits that aren’t available to long-term unmarried partners. These protections often become apparent at life’s worst moments, like when one person dies or becomes disabled, or the couple splits.

Before I go any further, I want to address the minuscule possibility that you’re in a common-law marriage. Couples in a common-law marriage have many of the same rights as couples who are traditionally married. For a common-law marriage to be valid, a couple needs to live together in a state that recognizes common-law marriage — and there are currently fewer than a dozen — and present themselves as a married couple. The lines are quite hazy, and this is difficult to prove in court. So because few couples actually have a common-law marriage, I’m answering your letter assuming that you’re not in one. But if you think you might meet the criteria, it’s worth consulting with an attorney about your rights.

I don’t want to scare you, but you’re right to be worried about being left with nothing if your partner dies before you. I’m not sure what type of retirement benefit you’re referring to.

But one of the big concerns when couples don’t marry relates to Social Security benefits. If you both worked for most of your adult lives and had relatively equal earnings, this probably wouldn’t be an issue. But marriage gives you the right to claim survivor benefits when a spouse dies. If your partner’s Social Security is your primary source of income, that’s a big concern. Likewise, you can’t receive spousal benefits while he’s still living.

The rules are a bit different for retirement accounts. When someone has a workplace plan, like a 401(k), they’re required to make their spouse their beneficiary unless they give written consent to someone else being named.

As long as your partner isn’t married to someone else, he’d be able to list you as his beneficiary, even though you’re not his spouse. The rules for individual retirement accounts (IRA) aren’t quite as stringent. Married or not, you can designate whomever you want as your beneficiary.

If you opt to remain unmarried, estate planning becomes even more essential. You and your partner should list each other as the beneficiary for any retirement accounts and life insurance policies. That way, when one of you dies, the asset will avoid probate and transfer directly to the surviving partner. You can also set up your bank accounts so that they’re payable on death to the other person.

Having an updated will is vital to cover other property. The saying in estate planning is that if you don’t have a will, your state has one for you. Since you’re not married, each person’s assets would go to the individual(s) your state considers your next of kin, even if they’re a distant relative.

If each of you would want the other to make decisions if you couldn’t communicate, you need to spell that out, as well. A medical power of attorney is a document that lets you designate someone to make health care decisions if you’re incapacitated.

People have all sorts of complicated reasons, both financial and non-financial, for not wanting to marry. If your partner has amassed a decent nest egg, he can probably make sure you’re left on solid footing if he dies before you. But if you’re depending on his Social Security, I think it’s worth considering a walk down the aisle, even after all these years.

Marriage certificate or not, part of building a life with someone is ensuring they’ll be cared for when you’re gone.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].