Family Finances
Aging with Separate Finances
Posted 02-10-24
I’m dealing with something with my aging in-laws with their separate finances: My 75yo step FIL is dealing with depression onset dementia and he is no longer able to sign checks/contribute funds to the household (we’re working with an attorney to help us through this.) We are hopeful that he is able to get mental health treatment for this and will return to managing his own finances, but if not, the attorney is helping us develop a plan. I’m curious if you’ve experienced something similar with a parent/IL not able to contribute to household expenses due to separate finances and an unexpected health issue and how it was managed - what worked/didn’t work? Do you have any tips on how to make this process smoother for the future (assuming he makes a full recovery, otherwise, we have the attorney’s outline of managing his funds.) MIL is requesting help and is open to all ideas I can offer to her (auto-pays and getting both names on all accounts is what I have so far.)
Also, if you and your partner keep separate finances, I’m curious how you’re planning for future years when one of you may not be cognitively able to manage finances.
(I’m not looking for a discussion on why people choose separate or combined finances or if one is preferable to the other, I’m just wondering how people prepare for this potential future with separate finances.)
16 comments
- Last edited 02-10-24Interested in anecdotes as well. So far I've come up with: Whether the partners are legally married, state law, and certain trust setups can change things. If truly legally separate, I think ultimately each partner should prepare a contingency for if there is no contribution or access to their partner's funds. Each partner should accumulate enough individual assets to support some minimum quality of living on their own. Partners should explicitly discuss scenarios where one partner needs expensive care and whether/how much they may pay for the other's care from separate assets (with guidance from an Elder Care attorney in many cases) Should an obligation between partners be necessary, it should be agreed legally, in writing, with a succession plan of POAs or trustees to execute in case of incapacity
- Posted 02-10-24Are they legally married? If not, there are likely benefits to not having both names on everything since you know he has dementia.
- BabyHint Original PosterPosted 02-10-24Not legally married, but together for 28 years (another reason for the elder law attorney involvement.) He has mostly cash assets, MIL has pension and higher SS payments. They definitely never had any long term care conversations - MIL likes to avoid hard conversations (her plan in her head was for both if them to die in good cognitive and physical health, and SFiL went along with just not discussing it 😬) There are a lot of things to deal with their aging other than financial, but I keep to my lane;)Advertisement | page continues below
- Posted 02-10-24what is the plan the attorney recommends? Broad strokes if you don't want to get too detailed.
- Posted 02-10-24I always figured you can't get your unmarried partner's funds if they/POA/trustee can't/won't agree to give or pay for shared expenses. That's the tradeoff of having separate liability exposure. So I've proceeded as if there is a possibility for a cutoff of anything funded from partner's separate funds.
- Posted 02-10-24Ohh interesting situation. My parents weren't married but together for 20 years - they ended up separating and each died apart from each other. I would be careful of alienating her, there's reason they have been together all these years. I would possibility setup a checking account with both their names and fund it heavily. She can manage their money as she see fit.
- Posted 02-11-24Does he have children? My grandfather was remarried and eventually each of their children organized things when they needed help. I’m not sure how they managed their finances, I know my step grandmother kept ownership of her house in NY and my Grandpa owned a condo in Florida. She ended up in memory care and my grandfather lived with my parents.
- Posted 02-11-24Do you have an idea of what his assets are? Do they live in a house owned by one or both of them? I would not start intertwining names on accounts now. She may be better protected by keeping her funds in her name if he needs to move to longer term care.
- Last edited 02-11-24Laws can vary quite a bit by state. I think you've made the wisest choice by seeking the assistance of an attorney. I'm sure they will have much more relevant advice. IME, my in laws had separate finances for their own complicated reasons and her sons paid her funeral expenses. FIL died a few years later and we thought we'd have to pay his, too, but he had a very surprising amount of savings and could easily have paid for his legally married wife of 50 years. Never think you understand what is going on in someone else's marriage.
- Last edited 02-11-24Has a provider, preferably a neurologist, diagnosed him with dementia? Depression can improve. But a neurocognitive disorder generally is progressive and worsens with time. That will affect my answer here. I work with A LOT of aging couples where one does have a major neurological disorder and finances are almost always a topic of concern. Some common things - getting wife POA, being his Representative Payee for SSA, obtaining guardianship if he is deemed legally incompetent. So much will depend on specifics on his health status and whether his medical issues are putting him at risk of self neglect, making very poor financial choices, etc. It’s hard to tell from what you described. May be worth speaking with providers, with his permission. Of course, if he’s just willing to add wife to things and let her take over, that’s the path of least resistance but needs to also be discussed with an attorney since they’re not legally married. I’ve had many older adults with neurocognitive disorders happily let their spouse take full control.
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