I’m considering marriage in the mid-60s. Even with a prenup and separate finances, I’m concerned about the possibility of a long-term illness and the potential for medical debt to be required to be paid from another person’s finances. For example, what if I get cancer and exhaust my savings, will my spouse be required to pay for ongoing or outstanding expenses? If you were marrying and considering a trust for heirs, which is best — revocable or irrevocable?
Taking the Plunge
In sickness and in health does not necessarily apply to medical debt.
If you do decide to get married, it’s a good idea to keep your assets separate so they are exempt from liens and claims from medical-debt collectors. A prenuptial agreement is always a good idea, regardless of your age, but especially when you are in your 60s and have already amassed a significant amount of assets. It’s also a good time to update your wills and, yes, set up a trust. A revocable trust typically becomes irrevocable upon your death.
Your question is one that millions of couples face: Am I responsible for my spouse’s medical debt? The answer depends on the state where you live but, as your letter suggests, how many assets you share. 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.
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.
