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.
Trusts and taxes
Dear Liz: My parents set up a family trust, which my brother and I have now inherited but not fully distributed. Included in that trust was the understanding that $130,000 would go to my daughter who is now 23. She has not received any of the money yet but would like to receive it within the next year for a down payment on a house. Would it be better to give her half the money this calendar year and half next year, or give her everything at once? I’m thinking there may be tax breaks for first-time home buyers that would offset the tax burden that a sudden increase in income from the inheritance would cause. She has been living on her own for several years and has a full-time job earning about $52,000 per year. She is already taking advantage of her company’s 401(k) match.
Answer: The inheritance won’t be considered income and isn’t taxable as such. Of course, any money the inheritance earns would be taxable. So if your daughter parks the money in a high-yield savings account while she looks for a home, she would pay income tax on any interest earned.
There also isn’t currently a first-time home buyer federal tax credit, although many states have various programs to help people buy homes. These typically do have income limits, although, again, the inheritance itself wouldn’t be considered part of her income.
Before you distribute the money, however, get clear on what exactly the “understanding” is about this money. If the trust clearly states this amount goes to your daughter, that’s one thing. If this money has been allocated to you, however, and you’re complying with your parents’ unwritten wish, you may have to file a gift tax return when the money is distributed. (Gift taxes won’t be due unless you give away millions in your lifetime.) An estate planning attorney can advise you.
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Helping beneficiaries find documents
Dear Liz: Not so much a question but a follow-up to previous advice in your column. I agree online statements are safe and reasonable but suggest keeping at least one printed statement a year from each account with important papers. Also, take time to place “transfer on death” beneficiaries on each account. My younger brother passed away without a will and most of his accounts were online. I have spent many months unraveling this mess. I had to prove I was next of kin to get at least enough money to be reimbursed for final expenses.
Answer: Your experience is far from unusual, unfortunately. With so much of our financial lives online, we’re just not creating the paper trails that can help executors settle our affairs. Often the executors can’t even open the laptops and phones that could help them track down accounts because those devices are password protected. Digital assets such as photos, frequent flier miles and cryptocurrency may become forever inaccessible.
People can make life easier for their loved ones by keeping an updated list of key passwords and account numbers in a safe place that’s accessible to the person or people who will be settling their estate. That could be an at-home safe or a locked filing cabinet, as long as your trusted person has the combination or key. Another option would be online services such as Everplans, which can allow you to organize documents and name trusted people who can get access to those documents after your death.
Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.
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FAQs
If you remarry before age 60, you generally cannot collect benefits on your former spouse's record unless your later marriage ends (whether by death, divorce or annulment).
When a spouse dies, how much Social Security does the survivor get? ›
Surviving spouse, full retirement age or older—100% of your benefit amount. Surviving spouse, age 60 to full retirement age—71½ to 99% of your basic amount. A child under age 18 (19 if still in elementary or secondary school) or has a disability—75%.
When someone who was married more than once dies, who is eligible for their Social Security benefits? ›
If you've been married multiple times, your current and former spouses could be eligible for Social Security benefits based on your earnings record, subject to certain requirements. Dear Liz: I'm in a second marriage that's lasted 10 years.
Do you lose your deceased spouse's Social Security if you remarry? ›
If you remarry before age 60 (age 50 if you have a disability), you cannot receive benefits as a surviving spouse while you are married. If you remarry after age 60 (age 50 if you have a disability), you will continue to be eligible for benefits on your deceased spouse's Social Security record.
How long must you be married to receive survivor benefits? ›
In most cases, if you were married to the deceased for at least nine months, you can qualify for survivor benefits. There is no length of marriage requirement if the death was accidental or occurred during US military duty. Remarrying after age 60 will not impact survivor benefits.
Does getting married affect Social Security survivor benefits? ›
A widow(er) is eligible to receive benefits if she or he is at least age 60. If a widow(er) remarries before age 60, she or he forfeits the benefit and, therefore, faces a marriage penalty. Under current law, there is no penalty if the remarriage occurs at 60 years of age or later.
What is a second wife entitled to? ›
For example, if you were to get married for a second time without a will, trust, nor prenuptial agreement, your second wife would be entitled to 50% of your community property earned during your second marriage, while your children from your first marriage would also be entitled to 50% after your death.
Can two ex-wives collect Social Security? ›
Keep in mind. A widow or widower and a divorced ex-spouse (or multiple ex-spouses) can draw survivor benefits on the same person's earnings record without affecting what the other receives.
Does ex-wife get everything when husband dies? ›
In most states, there are safeguards built into the law to protect against the aforementioned scenarios. Unless the decedent expressly included their ex-spouse in their will or trust after a divorce is finalized, the ex-spouse will most likely not be entitled to an inheritance from the decedent's estate.
Can an ex-wife collect a deceased husband's Social Security? ›
A surviving spouse, surviving divorced spouse, unmarried child, or dependent parent may be eligible for monthly survivor benefits based on the deceased worker's earnings. In addition, a one-time lump sum death payment of $255 can be made to a qualifying spouse or child if they meet certain requirements.
This is good news when former spouses are not on good terms. Your ex cannot “block” you from drawing your spousal benefit.
What is a second wife entitled to Social Security? ›
If you remarry after age 60 — you may still become entitled to benefits on your prior deceased spouse's Social Security earnings record.
What is the widow's penalty? ›
The “widow's penalty” refers to the financial disadvantages that widows often face after the death of their partners. This penalty manifests in various forms, from reduced Social Security benefits to inflated Required Minimum Distributions (RMDs) to potential estate tax issues.
Which wife gets the Social Security? ›
If you are married and you and your spouse have worked and earned enough credits individually, you will each get your own Social Security benefit.
What disqualifies you from survivor benefits? ›
Impact of remarrying: If you remarry before age 60 (or 50 if disabled), you typically won't be eligible to collect survivor benefits from your former spouse. However, if the subsequent marriage ends, you may become eligible again.
Do you lose survivor benefits if you remarry? ›
You can't receive survivor's benefits if you remarry before 60. If you remarry after age 60 (50 if disabled), you can still collect benefits on your former spouse's record. When you reach age 66, you may get retirement benefits from your new or current spouse's record if it is higher.
What not to do when a spouse dies? ›
Top 10 Things Not to Do When Someone Dies
- 1 – DO NOT tell their bank. ...
- 2 – DO NOT wait to call Social Security. ...
- 3 – DO NOT wait to call their Pension. ...
- 4 – DO NOT tell the utility companies. ...
- 5 – DO NOT give away or promise any items to loved ones. ...
- 6 – DO NOT sell any of their personal assets. ...
- 7 – DO NOT drive their vehicles.
Social Security survivors benefits are paid to widows, widowers, and dependents of eligible workers. This benefit is particularly important for young families with children.
What is the marriage rule for Social Security? ›
Qualifying spouse beneficiaries must be married to the retiring spouse for at least one continuous year prior to applying for benefits, with certain exceptions. Yes, up to 50 percent of spouse's PIA if spouse is still living.
What is the difference between spousal benefits and survivor benefits? ›
The short version: Spousal benefits are available to retired workers' spouses or ex-spouses. They pay up to 50% of a worker's monthly retirement or disability benefit. Survivor benefits are paid to a surviving spouse or surviving ex-spouse when a Social Security beneficiary dies.
For a spouse who is not entitled to benefits on his or her own earnings record, this reduction factor is applied to the base spousal benefit, which is 50 percent of the worker's primary insurance amount.
Does a wife get half of her husband's Social Security? ›
At their full retirement age, the spouse's benefit cannot exceed one-half of your full retirement amount.
Can a third wife collect husband's Social Security? ›
Yes, you can. Notify the Social Security Administration that you were married more than once and may qualify for benefits on more than one spouse's earnings record. They will be able to tell you which record provides the higher payment and set your benefit accordingly.
