Few things shake up someone’s world more deeply than the death of a spouse. Whether your spouse’s passing comes suddenly or after a protracted illness or decline, the enormity of this life event can leave a person reeling. At the very least, the surviving spouse will find himself or herself with a complex list of things to do, even in the midst of grief, in order to make sure that everything is handled legally and appropriately.
According to this recent article from Motley Fool, there’s something you need to add to that to-do list: if your spouse was drawing Social Security benefits, a call to your Social Security office is an important item to take care of. Reporter Maurie Backman explains why, and warns us that it can be troublesome – and costly – to overlook this simple step, because, if your spouse’s benefits keep coming after he or she has died, Uncle Sam is going to want that money back.
Add “Social Security” to Your List of Important Calls
“The death of a spouse can be a traumatic event at any age or stage of life,” Backman writes in his Motley Fool article. “If you lost a spouse, you may have a lot on your plate, like making funeral arrangements and contacting family members and friends to let them know.”
But, the article goes on, here’s the big “if”: what if your spouse was collecting Social Security benefits? Do you need to contact the Social Security Administration (SSA) right away? And does the death of your spouse mean their benefits are done with for good?
Backman has a straightforward recommendation. “It’s best to inform the SSA as soon as reasonably possible following the death of a spouse,” he advises. It’s probably wise not to delegate this task, either. “Sometimes, if you provide your funeral home with your spouse’s Social Security number, they can take care of that for you,” Backman explains. “But it’s generally a good idea to make that call yourself so you know it’s taken care of.”
Your Deceased Spouse’s Benefits Stop Upon Death
According to Motley Fool, the rules are unambiguous. “Once a person is no longer living, they can no longer collect Social Security. So it’s important to contact the SSA so it knows to stop payments.” That means, if a Social Security payment arrives in your bank account after a spouse’s death, you’re required to return that money.
“If, for example, your spouse passes away in January but the SSA still sends their monthly benefit in February, that February payment isn’t yours to keep,” says Backman.
But Your Own Benefit Could Increase
The Motley Fool article makes an important distinction between spousal benefits and survivor’s benefits. “If you’re married to someone who was collecting Social Security, once they pass away, you’re generally entitled to survivor’s benefits,” the article states. “In that case, your monthly benefit will equal the amount your spouse was receiving on a monthly basis.”
Moreover, says Backman, “If you’re already receiving spousal benefits from Social Security at the time of your spouse’s death, those spousal benefits will automatically convert to survivor’s benefits. And that will generally mean a bump up in pay.” That’s because the typical spousal benefit equals no more than half of what your spouse got to collect each month, up to his or her benefit at full retirement age. By contrast, survivor’s benefits equal 100 percent of your spouse’s former benefit at the time of death.
As an example, if the spouse who dies was receiving a $2,800 benefit and the surviving spouse was getting a spousal benefit of $1,000, Social Security will automatically start paying the surviving spouse a total of $2,800 per month as a survivor’s benefit. But the $1,000 spousal benefit will cease.
Your Own Earned Benefit versus Survivor’s Benefits
There’s one more wrinkle to consider. “Now, let’s say you’re entitled to a Social Security benefit of your own based on your personal wage history,” writes Backman. “If you’re already getting those benefits but you stand to collect more money via survivor’s benefits, you can apply for the latter and boost your monthly Social Security paycheck. But if your personal benefit is higher than what you’d get in survivor’s benefits, you might as well stick with your own benefit.”
Regardless of which route works best – your own benefit or a survivor’s benefit – it has to be one or the other. There’s no double dipping allowed.
Bottom Line: Make the Call Yourself
“Losing a spouse is never easy,” the article concludes. “If your spouse passes away, contacting the SSA as soon as possible could spare you a hassle with regard to having to repay benefits. At the same time, you should be aware of your rights as a survivor and go after the benefits you’re entitled to.”
Over time, the boost in benefits will be a big help. “Collecting a survivor’s benefit could at least help ensure that you don’t end up struggling financially while you mourn the loss of a very important person in your life,” says Backman. If we can assist in any way during this type of life transition, contact us, or our associates at Life Point Law. We’ll gladly answer your questions.
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(originally reported at www.fool.com)