Housing costs can be expensive no matter what your age or where you live. That's why a lot of people of all ages—not just young, career-oriented people and college students—have started looking for roommates to help share the burden. Older adults, in particular, who find themselves alone after many years of having a spouse or a family may want to consider splitting the rent and utilities on a nice 2-bedroom apartment instead of settling for an affordable efficiency in an area of town they don't like. However, there are a few precautions you should take before you agree to share the bills with another senior.
Get a roommate agreement filled out, signed, and notarized.
When you and your roommate agree to pay the landlord rent, you agree to each be liable for the whole bill if the other doesn't pay. That's because the landlord doesn't really care how he or she gets paid, so long as the check comes in on time.
That could leave one of you in a bind if the other roommate dies suddenly or has an accident that leaves him or her in a nursing home. While this is a potential concern for roommates of any age, the odds of something like that happening are naturally higher with seniors.
A roommate agreement won't protect you from the rent due notice or stop your utilities from being shut off, but if you have to assume the entire burden of the bills until the end of a lease, it does give you a document that clearly defines your roommate's financial obligations. You can present it to the executor of their estate or the person who has their financial power-of-attorney and ask for payment.
Make a consultation with your estate planners—together.
A good way to make sure that you don't leave your roommate on the hook for the extra housing expenses (or find yourself in that predicament), is for you each to make a quick appointment with your estate planners. Your can have a codicil added to your existing estate documents that will make paying off your share of the joint obligations for the housing and utilities through the remainder of the lease part of the terms of your will. That's just smart protection for you both.
See about getting a small term policy for each of you.
Term insurance policies are fairly inexpensive, especially if they're for only a few thousand dollars. Calculate out roughly how much each of you will eventually pay from the beginning of the lease until the end. Then take out a term policy for just a little over that amount, naming your roommate as the beneficiary. It won't help if you end up in a nursing home, but if you die suddenly, the payment will go straight to your roommate. If you have an existing insurance policy, your insurance agent may be able to divide the payoff up between more than one beneficiary, sending the bulk to your preferred heir or estate and the smaller amount directly to your roommate to cover the housing expenses.
Part of what makes a successful roommate is being sensitive to the other person's needs. By addressing this possibility up-front, you're already both showing a measure of genuine respect and concern for the other's well-being. For help navigating the legal murky waters of sharing a rental in your old age, contact a firm like Seiler & Parker PC.