I’m 53, a single parent with a $1 million home. My boyfriend wants to marry. Am… | Latest Lifestyle News
Dear Quentin,
My partner wants us to get married.
I am 53, never married, living in the San Francisco Bay Area with one adult daughter but in a committed, long-term relationship with someone who is not my daughter’s dad (although we have a positive relationship with the dad). Two years ago, my mom and I bought a house together in California, but she died six days after we moved in. My partner and my adult daughter worked together like a well-oiled machine during this trying time.
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Once my mom passed, our $1 million house was immediately put solely in my name, along with healthy investment and bank accounts equaling about $500,000 (on top of the $350,000 down payment for the house). I have a “pour in” living trust where everything but my government pension goes to my daughter, including my 403(b) accounts, the investment accounts and the house.
Question 1: Would I be responsible for his medical debts? Although my inheritance and the house have been kept completely separate, I don’t want to be forced to drain those funds if he has a medical crisis. He wouldn’t qualify for Medicaid based on my assets, but he would on his own. He doesn’t qualify for long-term-care insurance due to a pre-existing condition.
Question 2: I’ve managed to live until 53 without ever getting married. Should I just maintain the status quo or marry the love of my life?
Conflicted
There are exceptions to the rules governing spousal responsibility for debts in California. – MarketWatch illustration
Dear Conflicted,
With a lifetime of hard work and savings comes great responsibility to make sure you safeguard it for your own retirement and your daughter’s future.
The short answer to Question 1: Yes, if you don’t have a prenuptial agreement. There are nine community-property states: Arizona, Idaho, California, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In these states, assets acquired during a marriage are marital property, and those acquired prior are separate property.
In California, “all debts acquired during the marriage, in either partner’s name, become the liability of the surviving spouse should the other spouse pass away,” according to Esther Wang, an attorney based in Redlands, Calif., whose law firm specializes in elder care and disability.
“California law states that any debt can be enforced against the surviving spouse the same way it would have been executed against the deceased spouse,” she says. “The statute of limitations for collecting debts in California is four years, but after the debtor passes away, there is a one-year limitation for collection efforts. This limitation will even apply if the deceased ran up massive medical debts before passing away. The general four-year statute for collecting debts is overridden by the one-year limitation.”
There are exceptions to the rules governing spousal responsibility for debts in California. “First, if the spouse accumulated the debts prior to marriage — such as through student loans or spousal/child support — then the surviving spouse is not liable. Also, the surviving spouse’s separate property — assets acquired before marriage or through a gift or inheritance during a marriage — cannot be tapped.”
Marriage and due diligence
Now on to Question 2: Should you get married? Sure. If you do your due diligence, which would include a prenuptial agreement, there’s no reason why you should not live the life you want to live. You bring many assets into the marriage, so it’s natural and smart that you would want to protect them, especially as you have a child. And if you got divorced? “As a community-property state, California requires medical debt to be split between a divorcing pair,” says the Gille Kaye Law Group in Pasadena, Calif. However, if the procedure was a cosmetic surgery, a case could be made to rid yourself of the outstanding fees.”
Many states have a homestead exemption, ranging from $5,000 to the value of the home, protecting all or some equity from being seized by creditors, according to the Commonwealth Fund, a private U.S. foundation focused on the healthcare system. Some 11 states prohibit or set limits on liens or foreclosures for medical debt. New York and Maryland fully prohibit both liens and foreclosures for medical debt; California and New Mexico do so for certain income brackets.
Medical debt is the No. 1 cause of bankruptcy in the U.S., with some surveys putting it at anywhere between 45% and 60% of total filings, despite the fact that nearly half of the population has employer-sponsored health insurance. Your prospective spouse is not alone: Millions of Americans are either one paycheck away from losing a home or one medical crisis away from bankruptcy. Over 500,000 families go bankrupt each year due to medical reasons, accounting for 40% of bankruptcies.
Although many states don’t allow collection agencies to target a spouse or a surviving spouse with medical debts, some debt collectors may try because when people are grieving they tend to be vulnerable and might write a check to make an additional stress go away. Two-thirds of new surviving spouses are women, with an average age of 71, according to the Consumer Financial Protection Bureau; 25% of these spouses experience depression, and 41% report loneliness.
But you live and die by the laws of California. If you do marry, you could put your house and other assets in a trust for your daughter to keep them safe.
More columns from Quentin Fottrell:
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