Ask Liz Weston

Get smart with your money

Q&A

Q&A: Changing your married name? Expect a mound of paperwork

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Dear Liz: I use my first name, maiden name and married last name as my legal name. Just before we got married 46 years ago, I told my husband-to-be that I didn’t want to take his last name. I lost that argument. If he passes before me, I want to drop his last name. I know I would need to change my Social Security card but would I need to change everything else like my house deed?

Answer: Yes. Whenever you change your name, you can expect a mound of paperwork. You’ll start by changing the name on your identification cards, including Social Security, your driver’s license and your passport. Be sure to notify Social Security before filing your tax return, since the IRS uses Social Security records to verify your identity.

After your IDs are updated, you’ll change the name on other paperwork, such as voter registrations, property deeds, the U.S. Postal Service, banks, insurance companies, utilities and so on.

When you married, your marriage certificate and your previous identification cards were likely all you needed to update IDs. Had you divorced, you could have included the name change as part of the paperwork to help change your identification cards. In other situations, you typically need to get a court order to legally change your name. Filing fees depend on where you live. In California, for example, you can expect to pay between $435 to $450 and the process typically takes two or three months.

Q&A: Spousal benefits require “one continuous year” of marriage

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Dear Liz: I want to apply for a benefit based on my spouse’s Social Security but how long do we have to have been married? I was not eligible until the Social Security Fairness Act changed the rules. We have been married for four years in May. I am not receiving Social Security benefits since I worked for over 30 years for the government and do not have enough credits to qualify based on my earnings.

Answer: You typically need to be married for “one continuous year” before applying for a spousal benefit, according to the Social Security Administration.

Had you divorced, the rules would be different. Divorced spousal benefits require the marriage to have lasted at least 10 years, and two years must have passed since the divorce.

For those who don’t know, the Social Security Fairness Act repealed the windfall elimination provision and the government pension offset that reduced or eliminated Social Security benefits for people who received pensions from jobs that didn’t pay into Social Security.

The Social Security Administration says most affected people will see their adjusted payments starting in April. Those who never applied for Social Security because of the old rules can do so now.

Q&A: Sale of last home can trigger capital gains taxes

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Dear Liz: I am 74 and my husband is 68. We have decided to sell our last home and rent. Do we have to pay taxes, specifically capital gains, on the sale of our last home or are we able to keep the sale proceeds in full?

Answer: Any home sale is potentially subject to capital gains taxes. Your gain is determined by subtracting your tax basis — the price you paid for the home, plus any qualifying improvements — from the net sales proceeds. If you owned and lived in the home as your primary residence for at least two of the previous five years, you can exclude up to $250,000 (or $500,000 if married filing jointly) of home sale profits. You would owe taxes on the capital gains that exceed those limits.

A large-enough capital gain could affect how much you pay for Medicare. The “income-related adjustment amount,” or IRMAA, is based on your income two years prior, so a big gain in 2025 could increase your premiums in 2027.

You’d be smart to talk to a tax pro before you sell so you understand the ramifications.

Q&A: Bowing out of trustee duty

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Dear Liz: My husband agreed to serve as successor trustee for his brother’s living trust several years ago. My brother-in-law also added me as a backup. My brother-in-law’s financial situation has gotten very complicated and we would like to be removed as trustees. How do we go about this removal? My husband has asked his brother to see the lawyer who drafted the trust so they can both discuss the change, but his brother has ignored this request for several months.

Answer: A successor trustee’s role is similar to that of an executor. Both are charged with settling someone’s estate. Being asked to serve is an honor, since the person choosing you is saying they expect you will act with honor, integrity and prudence. But you can’t be forced to serve, even if you initially said yes.

Your brother-in-law may have already named other alternatives. If not, a court can appoint someone. This would undermine one of the benefits of a living trust, which is to avoid a court’s involvement in settling an estate. But that’s ultimately your brother-in-law’s problem to solve, not yours.

Before you bail, though, understand that as successor trustee or executor, you don’t have to be a legal or tax expert. You can use the estate’s resources to hire people to help you — and in all but the simplest estates, you probably should.

Of course, financial complications can lead to other complications — family fights, disgruntled heirs and so on. You may no longer have the energy or willingness to face such difficulties. If that’s the case, you’ve given your brother-in-law the heads-up he needs to make other arrangements.

Q&A: No more windfall elimination provision and government pension offset

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Dear Liz: My husband worked for the postal service for over 30 years and retired with a pension. He does not have enough years working in the private sector to qualify for Social Security. Since we now have the Social Security Fairness Act, is he eligible to receive a percentage of my Social Security? I know spouses who never worked and never contributed are able to receive Social Security payments based on their spouse’s earnings.

Answer: If you’ve already started Social Security and he’s at least 62, he should now be able to claim a spousal benefit based on your work record.

The Social Security Fairness Act ended the windfall elimination provision and the government pension offset. These two provisions had reduced or eliminated benefits for over 3 million people who received pensions from jobs that didn’t pay into Social Security. Those affected will see their benefits increase or receive benefits for the first time, plus they’ll receive a one-time retroactive payment reflecting the increase dating back to January 2024.

Social Security started adjusting benefits and making retroactive payments at the end of February. The agency says most affected people will see their adjusted payments starting in April, since benefits are paid one month behind.

If your husband never applied for spousal benefits, he can do so now. If he applied in the past and was denied, he could get his first payment next month as long as the agency has his current bank deposit information on file.

Q&A: Do retirement accounts affect survivor benefits?

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Dear Liz: I was 36 with two young children, ages 6 and 2, when my husband died. We are collecting Social Security survivor benefits. I work only part time since my kids are so young. He left two IRAs: one that named me as a beneficiary and one that didn’t name anyone. I understand I can treat the first one as if it were my own, and put off taking withdrawals. The second one must be drained within five years. Will the withdrawals from the second account affect my gross income and ability to collect our monthly Social Security benefit?

Answer: The withdrawals will be considered taxable income, but the money shouldn’t affect your survivor benefits.

Social Security benefits received before your full retirement age are subject to the earnings test, which withholds $1 of benefits for every $2 you earn over a certain amount, which in 2025 is $23,400. The earnings test includes wages and self-employment income, but doesn’t include withdrawals from retirement accounts.