April 8, 2024 By Leave a Comment

Q&A: To qualify for Social Security survivor benefits

Dear Liz: I am 85 and have been living (unmarried) with a man since about 1977. We have always filed our tax returns separately and now we both collect Social Security. I have been told that when one of us passes, the other cannot collect the deceased one’s benefits. We have been thinking about getting married and would like to know if there is a time regulation involved.

Answer: You generally must be married for at least nine months to qualify for Social Security survivor benefits. Keep in mind that the survivor will collect only the larger of a couple’s two checks; the smaller benefit goes away.

So marriage could benefit the lower earner financially, and give the higher earner peace of mind, knowing that their lower-earning partner will have access to the larger benefit. Marriage has a number of other financial and legal benefits, including the ability to make decisions for your spouse should they become incapacitated.

Marriage would end your ability to collect a divorced spousal benefit from a previous spouse, however. If either of you have been married before and the marriage lasted at least 10 years, investigate whether you might qualify for a larger benefit based on that partner’s work record. If the previous spouse has passed, you may qualify for a divorced survivor benefit. Unlike divorced spousal benefits, divorced survivor benefits don’t end at remarriage as long as you’re 60 or older when you remarry.

Filed Under: Couples & Money, Q&A, Social Security
January 1, 2024 By

Q&A: What is financial infidelity? And what should you do about it?

Dear Liz: My sister is married to a man who is considerably older. They’ve been married for eight years. He has cancer and the outlook isn’t good, but he refuses to discuss their financial status. As a result, she has no idea what’s going on. How can she force him to tell her their financial situation? They aren’t getting divorced, and every article I’ve read only addresses financial disclosure in divorce cases. I will probably be the one helping her figure this out after he passes away.

Answer: Refusing to discuss the details of shared finances is at best a form of financial infidelity. A recent NerdWallet survey conducted by the Harris Poll found that many Americans aren’t sharing financial secrets with loved ones, including their income, credit card debt and how much they’ve spent on a purchase.

But at worst, it can be a sign of abuse. If he’s controlling or abusive in other ways, her physical safety may be at risk. Encourage her to call the National Domestic Violence Hotline at (800) 799-7233, which can help her assess her situation and connect her to resources that can help.

Even if she doesn’t plan to divorce, a consultation with a divorce attorney could still help. The attorney could suggest ways to piece together some of the details of their financial life and advise her about state laws regarding shared responsibility for any debts.

Filed Under: Couples & Money, Legal Matters, Q&A
November 27, 2023 By

Q&A: What happens to joint credit cards after your spouse dies?

Dear Liz: My husband died last year and we have three credit cards in his name with me as authorized user. When applying for new credit, do I still use his name or my name now? And should I remove his name and put my name only on all accounts?

Answer: You’ll apply for new credit in your own name, using your own credit history and income. If your credit cards are joint accounts, you can simply ask the issuers to remove your husband’s name.

Here’s the thing, though: Few credit cards these days are joint accounts. Typically there is a primary cardholder and an authorized user. When the primary cardholder dies, credit card issuers usually close the account, often within a few weeks.

Issuers normally find out about the death from the person settling the estate or from the Social Security Administration. Social Security, in its turn, usually learns about the death from the funeral home or from the person settling the estate.

It’s possible there has simply been an oversight, but you’ll want to make sure your husband’s death has been properly reported to Social Security and his creditors. If you are an authorized user rather than a joint account holder, you may find the card issuers will work with you to get replacement cards although you may have to settle for a smaller credit limit if your income has dropped (which is unfortunately a common situation for survivors).

Filed Under: Couples & Money, Credit Cards, Q&A
November 13, 2023 By

Q&A: Delayed Social Security benefits

Dear Liz: I know my spouse can get up to half of my Social Security benefit amount if it is greater than her benefit. I am planning to delay starting Social Security until age 70. Will my spouse get half of my benefit at my full retirement age (which is 66 and 2 months) or half of my (noticeably higher) benefit at age 70?

Answer: The former. Spousal benefits don’t earn the delayed retirement credits that will increase your own benefit by 8% annually between your full retirement age and age 70.

Survivor benefits are a different matter. Should you die first, your wife would be eligible for up to 100% of your benefit — including any delayed retirement credits you earned.

Filed Under: Couples & Money, Q&A, Social Security
November 13, 2023 By

Q&A: Home equity in community property states

Dear Liz: I live in California and have been married for 20 years. My spouse bought our home before our marriage and my name is not on the title as a co-owner. However, I contribute to most of our monthly financial obligations which include paying the mortgage, property taxes, etc. In the event of death or separation, how much of the current home equity am I entitled to? This is our only and primary residence.

Answer: Normally, an asset that was purchased before marriage is considered separate property even in community property states such as California. But if the mortgage is paid down with “community funds” — money earned by either spouse during the marriage — then the spouse who isn’t on the title may be entitled to some of the appreciation that occurs after the wedding.

That may not prevent you from being evicted if your spouse dies, however, or having to fight an expensive battle in court if you divorce. Consulting an attorney now could help you better prepare for either possibility.

Filed Under: Couples & Money, Divorce & Money, Q&A
November 6, 2023 By

Q&A: What’s a qualified charitable distribution?

Dear Liz: I have a suggestion for the couple who is facing the start of required minimum distributions from their retirement accounts but who do not need the money. They could consider making a qualified charitable distribution (QCD). A QCD allows you to donate to a charity directly from your IRA and satisfies your RMD requirement. The only caveat is that the money cannot pass through your hands. It must go directly from the IRA to the charity. You can’t take a deduction for the contribution, but the money won’t count as taxable income. Although the age of RMD has been rising in recent years, the age for a QCD remains at 70½. The maximum allowable is $100,000 per taxpayer a year. A husband and wife can each make a QCD if they have separate IRAs.

Answer: Qualified charitable distributions can be a great solution for people who have saved more in their retirement accounts than they need and who want to benefit good causes. The charity must be a 501(c)(3) organization that can receive tax-deductible contributions, and, as you note, the money needs to be transferred directly from the retirement account and the contribution made before the year’s RMD deadline, which is typically Dec. 31. There are a few other rules involved, so consider consulting a tax pro before arranging a QCD.

Filed Under: Couples & Money, Q&A, Taxes
October 30, 2023 By

Q&A: Married more than once? Here’s what that means for Social Security survivor benefits

Dear Liz: I’m in a second marriage that’s lasted 10 years. Is my wife fully entitled to my Social Security after I die? My first wife and I were married for 19 years. Is my ex entitled to any of it?

Answer: Both your current spouse and your ex could be entitled to survivor benefits based on your work record. Typically someone must be married nine months to qualify for survivor benefits on a current spouse’s record. If the spouses divorced, the marriage must have lasted 10 years. Each survivor benefit can be up to 100% of your benefit. The amount may be reduced if the women start benefits before their own full retirement age, but they don’t have to share — the amount isn’t reduced because you’ve had more than one spouse.

Filed Under: Couples & Money, Divorce & Money, Q&A, Social Security
October 9, 2023 By

Q&A: California is a community property state. How that affects your and your spouse’s need for a will

Dear Liz: Does a spouse automatically inherit everything if the other passes away without a will?

Answer: Not necessarily.

Anything that has a beneficiary designation, such as retirement accounts and life insurance, would typically pass to the person named as beneficiary even if that’s not the surviving spouse. Bank and investment accounts also may have “transfer on death” or “pay on death” beneficiaries. In many states, cars and even homes can be passed with beneficiary designations. In addition, jointly owned assets would pass to the other owner.

Other assets would pass to the deceased spouse’s survivors according to state law if there is no will or living trust. You can look up those laws by searching for the state’s name and the words “intestate succession.” If there are no children, the surviving spouse may inherit everything or may have to share with the deceased’s parents or siblings. If there are children, the surviving spouse inherits a portion of the estate with the children getting the remainder.

For example, in California — a community property state — the spouse would inherit all the community property and one half of the separate property if there is one child, and the child would inherit the rest. With two or more children, the spouse gets all of the community property and one-third of the separate property, with the children sharing the rest.

Filed Under: Couples & Money, Inheritance, Q&A
September 25, 2023 By

Q&A: Death and document retention

Dear Liz: After a spouse’s death, I am wondering if there is some guidance on how long to keep items such as a driver’s license, Social Security card, Medicare and health plan card, passport, veteran’s information and so on. I haven’t seen this addressed in your column.

Answer: Guidance about what to keep and discard after a death can vary widely, so you may want to ask your estate attorney for help. In general, though, you can begin to dispose of many documents three years after the estate is settled, said Jennifer Sawday, an estate planning attorney in Long Beach.

In some cases, you can shred them sooner. Social Security numbers are often printed on the death certificate, so the card can be shredded once you verify the number on the certificate is accurate, Sawday said. You also may wish to shred the passport as soon as possible to avoid it falling into the hands of an identity thief. Another option is to mark the passport “void” and keep it as a family history item, she says.

The driver’s license is another possible family history item — and boon to an identity thief — but it can be discarded at the three-year point, Sawday said. Veteran’s information can be kept for family history purposes or discarded three years after any death VA benefits are claimed.

Medicare and health plan cards should be kept in case any medical billing issues arise and then discarded when those issues, if any, are resolved, she said.

Filed Under: Couples & Money, Legal Matters, Q&A, Social Security
September 18, 2023 By

Q&A: What happens when your unmarried life partner dies without a will?

Dear Liz: A close friend recently lost her partner of many decades. The partner left no will or trust or anything in writing. The partner owned many properties and had a huge IRA and lots of money in the bank, but all in the partner’s name alone. My friend asked an estate lawyer and the lawyer said she had no legal right to anything, even the home she has lived in for many years. Can anything be done?

Answer: The lawyer is probably correct. Without estate documents, beneficiary designations or some kind of written agreement, unmarried partners typically can’t inherit, said Jennifer Sawday, an estate planning attorney in Long Beach.

But your friend should consider talking to a family law attorney to see if she has any recourse, Sawday said.

In California, for example, she may be able to make a “Marvin” claim against the estate. (Marvin claims stem from a 1976 California Supreme Court case between Michelle and Lee Marvin, which established that unwed partners could sue each other over property divisions after a relationship ended.)

Filed Under: Couples & Money, Inheritance, Legal Matters, Q&A