Ask Liz Weston

Get smart with your money

Liz Weston

Q&A: What does a successor trustee do?

By Leave a Comment

Dear Liz: My older brother and his wife recently told me they made me the executor of their living trust. I have no experience with this. They live in Maryland and I’m in California. Can you please let me know what I can do now to make the process simpler when the time comes?

Answer: Your brother and his wife should have asked you if you would be willing to take this role, which is called “successor trustee” rather than executor when a living trust is involved. Just because they put your name in their document doesn’t mean you are required to serve. Their trust should name other people who can serve. If not, the court can step in to name someone.

Being either a successor trustee or an executor is often a big commitment that may last for years. You’ll be required to manage the trust assets, pay final bills and creditors and communicate with beneficiaries. Successor trustees may have added responsibilities, since they typically have to step in if the trust creators become incapacitated.

If you’re willing, though, agreeing to this role can be a way to honor the people you love by making sure their wishes are followed. Being asked to be a successor trustee or executor is an honor, since the trust creators believe you are honest, trustworthy and diligent enough to handle this enormous responsibility.

You’re allowed to, and probably should, hire legal and tax help using estate funds. The estate should also pay for your travel to fulfill your duties.

You can do some research before deciding. Ask for a copy of the trust so you can start to familiarize yourself with the trust assets and what will be involved in settling the estate.

Q&A: Closing a long-held credit card didn’t have much impact

By Leave a Comment

Dear Liz: I just read your column about cardholders being fearful of canceling a card. Here’s my story.

I made an online purchase with a credit card I’ve had since 1981. The purchase turned out to be a scam. I spent hours trying to resolve this. When I finally got a human, she was extremely hard to understand and was very condescending. She told me I should upgrade to another version of their card at a higher cost. I finally told her to cancel my card. Then she went to Page 2 of her script and offered me a $50 credit toward the purchase being disputed. After 20 minutes and my insistence that I no longer wanted their card, she finally canceled it. My credit score dropped 4 points. At first, I was concerned, but honestly, after 44 years with them and thousands of dollars in annual fees, the way I was treated made my decision easier.

Answer: Thanks for sharing your experience! The impact of closing the account might have been greater if it had been your highest-limit card, if you didn’t have several other open cards or if your credit scores weren’t high. But even a larger ding would be temporary as long as you continued to use your other accounts responsibly.

Q&A: IRS tax payment problem can be frustrating to fix

By Leave a Comment

Dear Liz: In a recent column, you advised people to pay IRS tax bills online. Have you done this yourself? The wording of the choices to click on can be confusing. I tried to help my son pay online last year. We evidently chose the wrong type of tax and it went to “la la land.” He got late letters and fines. It took quite a while to get it rectified because you are on hold for HOURS. Who has time for that? Next year I’ll have him mail it and take our chances.

Answer: I’ve made exactly the mistake you describe and am aware of how frustrating it can be trying to get the situation rectified. But dealing with mail theft and check fraud is frustrating too.

Both of us would have benefited from consulting a tax pro first to ensure we were clicking the right buttons. A tax pro can also help in straightening out a snafu. The IRS was understaffed and struggling to answer its phones even before the government shutdown, but the dedicated number for tax pros often has shorter wait times than the one for the general public.

Q&A: How “deeming” works for Social Security spousal benefits

By 1 Comment

Dear Liz: I will be turning 64 next year and my wife will be turning 62. I plan to wait as long as I can to file for my Social Security, hopefully till 70. My benefit at full retirement age (age 67) is around $3,400 monthly and my wife’s is about $1,100. Half of my benefit will always be higher than hers, even if she waits until age 70 to file. Can she file for early benefits next year (around $800 a month), then switch over to half of mine when I finally file? Will the ‘deeming’ rule affect this? Will she actually get half of mine if she files early?

Answer: If you had already started receiving your benefits, your wife would be “deemed” to be applying for both her own benefit and her spousal benefit and would be given the larger of the two. She couldn’t apply for just one, and there would be no switching later.

Because you haven’t started yet, though, the spousal benefit hasn’t been triggered. The only benefit she can currently apply for is her own. When you apply, the spousal benefit will become available and she will be switched to that if it’s larger (which sounds like it will be the case).

Spousal benefits can be up to half of what the primary earner would get at full retirement age, but the amount is reduced when started early. If you apply for benefits before she reaches full retirement age, in other words, her spousal benefit would be less than 50%.

Plus, any benefit started before the applicant’s full retirement age is subject to the earnings test, as described above.

Because so many different factors are at play, it could make sense to use one of the paid Social Security claiming strategy sites such as Social Security Solutions or Maximize My Social Security.

Q&A: How should I receive Social Security survivor benefits?

By Leave a Comment

Dear Liz: I am 68 and still working. I plan to wait until age 70 to maximize my benefit before taking Social Security. My spouse (born in 1956) passed away in 2018 after just beginning to draw her Social Security benefits at age 62.

Even though I was the higher earner, I believe that I can draw survivor benefits now from my wife’s Social Security if I apply. I also believe that I can switch to my own benefit when I turn 70, and my benefit would then be higher.

But I cannot find an answer to whether, if I did such a switch at age 70, my benefits would be at maximum because I waited until age 70, or would be less than the maximum because I started taking my wife’s survivor benefits or even worse, because my wife started benefits early. I see many articles that dance all around this question but never answer it. Can you please be the one who answers this question?

Answer: Social Security can be incredibly complex, with different rules applying depending on age, marital status and the type of benefit involved. Survivor benefits have different rules than spousal benefits, for example, and both work differently from the retirement benefit people earn on their own work record. You’re smart to want to understand exactly how the rules affect your individual situation before applying.

You are correct that you can apply for survivor benefits now and then switch to your own retirement benefit when it maxes out at age 70. Your retirement benefit will not be reduced because you collected survivor benefits first, or because your wife started her benefit early.

However, your survivor’s benefit will be smaller than it might have been because of her early start. The survivor benefit is determined by what the deceased spouse was receiving at the time of death.

Survivor benefits can begin as early as age 60, or 50 if the survivor is disabled, or at any age if the survivor cares for minor or disabled children from the marriage.

But starting early would have further reduced your benefit, plus you would have been subject to the earnings test, which withholds $1 for every $2 you earn over a certain limit (which in 2025 is $23,400). The earnings test goes away when you reach full retirement age, which for someone born in 1957 is 66 years and 6 months.

There was no benefit to delaying your application past your full retirement age. That means you’ve missed out on several months of survivor benefits you could have been receiving. You can get six months of back benefits when you apply, but that’s the limit.