Ask Liz Weston

Get smart with your money

Couples & Money

Are two savings accounts safer than one?

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Dear Liz: My wife and I will be receiving a sizable amount of money. We want to put the money into a high-yield joint savings account. We don’t want to exceed the FDIC protection. Can we each open joint accounts at the same bank and have each account covered up to the $250,000 limit?

Answer: That’s not quite how it works.

FDIC insurance is per depositor, per ownership category. Ownership categories include single accounts, joint accounts, certain retirement accounts such as IRAs and trust accounts, among others.

A joint account for the two of you would be covered up to $500,000, or $250,000 for each owner. A second joint account at the same bank would not increase your insurance coverage. If you had one joint account plus two single accounts, then your total coverage at the bank would be $1 million ($500,000 for the joint account, plus $250,000 for each individual account).

This assumes none of the accounts has beneficiaries. Naming one or more beneficiaries turns either joint or single accounts into trust accounts, for insurance purposes. Each owner of a trust account is covered up to $250,000 per beneficiary, to a maximum of $1.25 million for five or more beneficiaries.

Q&A: Speaking of credit cards, what if a spouse has a balance when they die?

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Dear Liz: When a spouse dies, is the surviving spouse responsible for outstanding credit card debt from a card issued only in the deceased’s name?

Answer: In community property states — including Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin — debts incurred during marriage are usually considered owed by both spouses, even if only one spouse’s name is on the account. In other states, debts can be considered separate, but creditors typically are paid out of the dead person’s estate before any remaining assets go to heirs.

Q&A: Co-owned credit cards are great … if you can find them.

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Dear Liz: Recently you recommended that both spouses have a credit card on which they are the primary account holder. Another option is for the spouse to apply to be a co-owner of their current credit cards. This worked for me when my husband passed away five years ago. The bank canceled his access, but left mine intact.

Answer: Few credit card issuers offer joint accounts these days. Most are set up so one person is the primary account holder, with the option of adding other people as authorized users. That’s why it’s important to make sure each spouse is the primary account holder on at least one card because the authorized user’s access will probably end when the primary account holder dies.

Q&A: Til death do your credit part?

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Dear Liz: My wife and I have credit cards where I am designated as the primary account holder. What happens to my wife’s access to the account should I pass? Should she now apply for credit cards where she is the primary holder?

Answer: Credit card companies typically close accounts when they learn of the primary cardholder’s death. (It’s usually the executor’s job to inform creditors of the death, but card issuers also learn of deaths from the Social Security Administration.)

So it makes sense for both spouses to have at least one or two cards where they are the primary account holder. If you die first and all the cards are in your name, she might have to scramble to get replacements.

Q&A: My ex-wife lent my money to her boss. What can I do?

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Dear Liz: I recently found out that my ex lent one of her former bosses $2,500 to get his brother out of jail on bond. My ex took the money out of a joint account that I had opened with the inheritance I got when my dad died. It’s now been four years and I haven’t received a penny of the loan back. I could really use the money now as I have medical bills to pay. Question is who do I go after? My ex or the boss?

Answer: You may have read in this column that inheritances can be kept as separate property, even in community property states where other assets acquired during marriage are generally considered jointly owned.

An inheritance can lose its status as separate property, however, if it’s commingled with joint funds. That’s what you did when you opened a joint account with the money: You gave your ex access to the funds.

You certainly can ask the ex and the boss to give the money back. You could try small claims court if that doesn’t work. You also could hire an attorney, but the costs of trying to get the loan repaid may well exceed the amount at stake.

Q&A: To qualify for Social Security survivor benefits

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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.