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Support
for Widows and Widowers
You may have to
make decisions about:
- Social Security Checks
- Social Security Death Benefits
- Veterans Benefits
- Insurance Benefits
- Probate
- Taxes
- Federal Estate Taxes
- Income Tax
- cars
- home
- bank accounts
Social Security
Checks
- Let Social Security know
that
you spouse has died.
Social Security checks are
always
one month behind. A person
must be alive at the end of a month to get their benefits for that
month. You CANNOT
keep the benefits for the month in which your spouse died.
For example:
The check you get in
July
is for benefits earned in June. So if your spouse died in June, you
must return the check you get in July. It was for June and the spouse
was not alive for the whole month
Your Money from Social Security
How much money you get
after
your spouse dies depends on whose work record your benefits were based.
If you were getting benefits based on your own work record, your
benefits will not change. If you were getting benefits based on your
spouse's work record, then after your spouse dies, you will get a
monthly check equal to what your spouse got while alive.
As a widow/widower, you
are
entitled to the amount your spouse was getting each month or the amount
based on your own work record, whichever is more.
For example:
A husband gets $900 per
month. His wife gets $450 per month based on her own work record. The
husband dies. His wife now gets $900 per month based on her husband's
work record. But she no longer gets her $450.
NOTE: this means a widow or
widower
may get less each month in total household income. Keep this in mind.
You will need to make a new budget.
Social Security Death Benefits
As a surviving spouse,
you
may also get a lump sum "death benefit" of $255. To get this, you must
have been living in the same household with your spouse when he or she
died.
If you were getting
benefits
based on your spouse's work record for the month he or she died, you
need not apply. Otherwise, you must apply for this lump sum benefit
within two years of your spouse's death.
Veterans'
Benefits
- If your spouse was getting
veterans'
benefits when he or she died, you may be able to get survivor's
benefits. Even if your spouse was not getting veterans' benefits when
he or she died, you may still be able to get certain lump sum payments
after his or her death.
- If your spouse got an
honorable discharge, then you can get an allowance to use towards the
funeral, burial plot, and grave marker.
A
life
insurance policy is a contract between the insurance
company and the person who buys the policy. When the insured person
dies, money
is paid to the person named in the policy. This person is called the "beneficiary."
Claims
Tell the insurance
company
your spouse has died. If you have any trouble figuring out what to do,
call or go to see your insurance agent. Your agent expects to give you
this help. There is no charge for it.
If the policy does not
name a
beneficiary, the insurance company will pay the money to your spouse's
estate.
Creditors and Insurance Money
Insurance money that
goes
straight to the beneficiary can't be touched by the estate's creditors.
You can spend it as you want.
If the money from life
insurance goes into the estate because no beneficiary was named, then
creditors of the estate can get paid from the insurance money. You will
not get any of this money until all expenses of the estate have been
paid.
Taxes on Insurance
The beneficiary -
whoever
that may be - gets the money free from income taxes.
Probate
Filing a will and settling an estate is called "probate." You should be
aware that some types of property does not "go through probate."
Things that do
not through Probate
Property
Passing to a Surviving Spouse
Community or separate property passing to a surviving spouse, either by
will or Intestate succession, is not required to go through formal
probate.
NOTE: Although "formal" probate is not required, title to certain types
of property passing to a surviving spouse, including real property may
require "summary" procedures, such as a Spousal Property Order being
filed with the court. Community property does not automatically go to a
surviving spouse; a spouse may will her one-half interest in community
property to anyone. If a spouse dies without making a will (intestate),
then all his community property goes to the surviving spouse.
Estates Valued at Less
than
$100,000
Only estates of over $1000,000 are subject to formal probate. There are
various "summary" procedures for transferring different types of
property in estates with a total value under $1000,000. Property held
in joint tenancy or in a living trust is not counted toward the
$100,000 limit. These limits apply to personal property.
The limits for real property are more restrictive.
Property Held in Joint
Tenancy
The main characteristic of joint tenancy is the "right of
survivorship." This means that when one joint tenant (owner) dies, the
property passes automatically to the remaining joint tenants(s). The
decedent's name is cleared from title by filing a simple affidavit with
the County Recorder's office. Property held in joint tenancy is not
part of the decedent's estate and is not subject to probate.
Because of misunderstandings about the nature of joint tenancy,
individuals frequently try to leave joint tenancy property to someone
else in their will. Such will provisions have no effect: the property
still goes to the surviving joint tenants.
WARNING: For a variety of reasons, putting someone on title to your
property as a joint tenant to avoid probate is usually not a wise thing
to do. Always get legal advice before making changes in title to your
property.
Property Held in
Living Trust
Living trusts are legal entities that can own property. An individual
(grantor) creates a living trust by executing a document called a
"Declaration of Trust." The individual then transfers title of the
property from themselves to the trust.
When the individual dies, there is no estate to be probated because the
trust, not the individual, owns the property. The trust property is
then distributed or managed according to the instructions the grantor
gives in the trust
Named Beneficiary Assets
Your spouse may have owned assets in his or her own name when he or she
died. If your spouse's solely owned assets have a named death
beneficiary, then probate will not be needed. A death beneficiary is
the person who gets the assets when the owner dies.
Examples:
1. an IRA with a beneficiary,
2.
bank account set up "I.T.F." (in trust for),
3.
certain U.S. bonds and securities, and
4. life insurance with a beneficiary.
If these assets name death beneficiaries, they go directly to the death
beneficiary. They are not part of the estate assets. The death
beneficiary would have control over the assets. All the death
beneficiary has to do is get in touch with the people holding the
assets and tell them your spouse has died.
Things that go through Probate:
As mentioned in the prior section on assets that are not subject
to probate, California law allows a decedent's property, whether it is
community or separate property, or to pass to a surviving spouse
without court administration (formal probate).
However, depending on the type of property, summary procedures
may have to be taken to transfer title of the property to the surviving
spouse. An example of these "summary" procedures is a Spousal Property
Order issued by the court to transfer title of real property to the
surviving spouse when title was held in the decedent's name only, or
when, for tax reasons, the surviving spouse needs to establish the
property as community property.
Without a Will
If your spouse dies without a will, assets will got to people according
to the "intestate" laws. These laws say how assets will be distributed
if there is no will. The state writes a "will" for you if you didn't
write one for yourself.
Under California intestate law, if a person dies and is survived by:
1. A spouse, but no issue ("issue" means children, grandchildren,
great-grandchildren), then everything goes to the spouse.
2. A spouse and parents, but no children or their issue: all community
property goes to the spouse. Separate property is split 50-50 between
spouse and the parents. A descendant but no spouse, everything to the
descendants per stripes.
3. A spouse and one or more children: all community property to the
spouse. Separate property is split 50-50 between spouse and one child.
if more than one child, spouse takes one-third and children, however
many, divide two-thirds. Issue of deceased children take by "right of
representation." In addition to biological children, children include:
stepchildren and other children if the parent child relationship began
during the child's minority and continued through the decedent's
lifetime. It must also be shown that the decedent would have adopted
the child but was legally prevented from doing so.
Taxes
Federal
Estate
Tax
Federal estate tax is paid only when the value of an estate is more
than $1,000,000. Widows and widowers get an unlimited marital deduction
for property that goes to them.
California estate tax is paid only if federal estate tax is paid. It is
a credit against federal estate tax. What is not paid to the federal
government is paid to the state government instead.
Income Tax
Your spouse's federal and state income tax may also be due for the year
of his or her death. This will depend on whether the two of you had to
file and pay taxes. If so, then the taxes are due on the normal filing
date of the next year.
You may file a joint return for the year in which your spouse died. If
you think Federal income tax may be due, call the Internal Revenue
Service at 800-829-3676. Ask for a copy of "Information for Survivors,
Executors, and Administrators," Publication No. 559.
Titles
After your spouse dies, you may have to change the title
of
ownership on some assets.
Spouse's Car
The California Department of Motor Vehicles (DMV) has forms you use to
transfer title to a car when the owner dies. If you belong to an auto
club, it should be able to help you get and fill out the forms.
If not, call the DMV and ask for the form, "Transferring the Title
Without Administration." The telephone number can be found in the White
Pages, under "State Government - DMV."
Home
Deed
If your home was in both names, you don't need to change the
title now. Wait until you sell the home or your own estate is settled.
That will save you the cost of a new deed.
Joint
Bank Accounts
If your bank account is in both names, it's a good idea to leave
it that way for a short time. That way, if you get a check, which has
only your spouse's name on it, you may be able to deposit the money
into the joint account. This can avoid the need to open an estate
account just to cash these checks.
Other
Jointly Owned Assets
You should put any other joint assets into your name alone.
If these include stocks or bonds, you may need the help of a
stockbroker. If you don't have a broker, you should consider choosing a
discount broker, not a full-service one. The only help you need is with
putting the stocks or bonds into your own name. You don't need
investment advice for that.
Titles
on Assets with a Named Death Beneficiary
You will have to switch title to those assets your spouse set up
to pass to you as a death beneficiary. These might include IRA or bank
accounts set up in trust for you. To make this switch, all you
usually have to do is call whoever is holding these assets and tell
them that your spouse has died.
If you were the beneficiary of your spouse's IRA, you may want to think
abut a "rollover" into your own IRA. You would not have to pay current
income taxes. You may want to talk to a tax advisor to help decide if
this would be best for you.
Debts of
the
Spouse Who Died
In California, spouses are liable for most of the debts that are
incurred before or during the marriage. An exception might occur where
a creditor agreed to look only to the spouse incurring the debt for
repayment, or where it can be proved that the spouse not incurring the
debt was unaware of the debt and got absolutely no benefit. This type
of situation is rare. Creditors will almost always go after the
surviving spouse for payment of the decedent's debts. Other states may
vary their treatment of these debts.
How Estate's Debts are Paid
At the formal level, creditors, after being properly notified by the
estate representative, must file their claim forms with the court
within four months of the representative's appointment. The court then
oversees the payments. Secured debts and debts incurred after death,
such as funeral expenses, do not require formal claims.
Informally, whether the estate representative has the authority to act
without court supervision or when no court administration is necessary
because of the nature of the estate, the representative has the
authority to pay estate debts at their discretion.
Individual beneficiaries of a will, or heirs of an estate, are
liable for the debts of the estate to the extent they inherit. In other
words, if you inherit $10,000, your liability to creditors of the
estate is limited to $10,000.
Notify Creditors
All of the decedent's creditors should be notified. If there is
court administration of the estate (probate), the notification must be
done in a very precise way.
When your spouse dies, there are other legal things to deal with. You
will need to decide if you need a new will.
You should also think about giving someone you trust a "durable power
of attorney". This lets someone you trust handle your financial
affairs. In a "health care power of attorney" you name someone to make
medical decisions for you if you are not able to.
Many recent widows or widowers find it helpful to talk to others
who understand what they are going through. Many programs give help and
support to the newly widowed. If you retain us to help with
administration, we will supply these contacts.
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