When planning your estate, you’re also planning for retirement and working to ensure your loved ones are well cared for in the future. Even if your estate is large, you want to take steps to make sure your spouse is getting all the benefits they’re entitled to and that those benefits are considered when planning your estate. Several programs offer surviving spousal benefits, but the two most common are social security and many pension plans.
If you receive Social Security, then your spouse of nine months or more is eligible for survivor benefits upon your death. If the surviving spouse has reached full retirement age, then they can collect the full value of your benefit. This amount will be the amount that you were able to claim, depending on what age you started collecting the benefit. Your spouse will need to report the death to the local Social Security office.
There are a few exceptions to these rules and the actual benefit can depend on family circumstances. In some cases, a spouse will collect a survivor’s benefit even if you’re divorced. It is important to know and plan for the fact that your spouse will not receive a survivor benefit in addition to their own Social Security, just the greater amount of the two.
Similar to social security, if you’re entitled to a pension, your spouse may be entitled to a survivor’s benefit. Some pensions, such as railway worker pensions, have their own set of rules, as do private pensions and federal and state pensions, and pensions offered by religious institutions. Therefore, how much your spouse will be eligible for, and whether the benefit will preempt any Social Security they may get, will depend on the circumstance.
The Employee Retirement Income Security Act (ERISA) governs private pensions and requires them to provide a survivor’s benefit. A spouse can choose to waive their survivor’s benefits, in writing. Otherwise, these spousal benefits may even follow your spouse after divorce and are often included in a divorce settlement.
If you die, leaving a surviving spouse, before retirement age, then your spouse can either get a smaller payment right away or wait until the date where you would have retired to begin receiving your full benefit.
At Dunn Law Firm, we want to make sure you estate plan is comprehensive and covers a variety of possible scenarios, including what happens to your spouse before and after retirement. To learn more, reach out to the Dunn Law Firm by calling (435) 628-5405 to set up a free consultation today.