FAQ: Women & Investing

March 26, 2014
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Here's a couple questions we often come across when it comes to women's financial planning. To here more detailed responses, check out our radio segments on women and investing where Scott went over these questions and more...

Question: I don't know much about investing. Should I let my husband make the decisions?

Answer: Even if you husband is a financial expert, it's a good idea to at least understand investing basics. For one thing, because women on average tend to live longer than men, the odds are extremely high that you could be responsible for making your own financial decisions at some point. If you suddenly had to make all the decisions yourself--and many women have found themselves in that position--you'd benefit from knowing enough to protect yourself from fraud and/or communicate effectively with a financial professional.

Also, even if your spouse is more knowledgeable about finances than you are, understanding enough to consider the pros and cons involved in an individual financial decision can often produce a better outcome; it forces both of you to address questions you might not have considered otherwise. Knowing why a decision was made can help minimize second-guessing on either side later.

If you disagree about a particular investment, remember that though diversification doesn't guarantee a profit or prevent the possibility of loss, a diversified portfolio should have a place for both conservative and more aggressive investments. There may be ways to accommodate both spouses' concerns, and a neutral third party with some expertise and a dispassionate view of the situation may be able to help you work through differences.

Question: My husband just died. Do I have access to his accounts?

Answer: Generally, if your name does not appear on the account, either as a joint owner with rights of survivorship, trustee (if the account is held in trust), or a beneficiary, you probably can't access the account unless authorized to do so by the probate court having jurisdiction over your husband's estate. Each state has its own laws dealing with this situation, and the applicable rules may differ from one state to the next.

Even if you are named as agent in your husband's power of attorney with the right to access his accounts, that authorization ends upon the death of the person executing the power of attorney, namely your husband. 

Question: My spouse passed away this year. When I file my taxes, what filing status should I claim?

Answer: As the surviving spouse, you have several filing choices that may be appropriate. You may be able to choose married filing jointly, married filing separately, qualifying widow(er), or head of household.

Married filing jointly: You can usually file a joint return for the year your spouse died. Generally, you'll have to file in cooperation with the executor or administrator of your spouse's estate. If you remarry before year-end, you cannot file a joint return with your deceased spouse for that year.

Married filing separately: To determine the most advantageous approach, you should figure taxes according to both the married filing jointly status and the married filing separately status.

Qualifying widow(er): If you meet certain requirements (e.g., you support a dependent child for whom you can claim a tax exemption, and you have not remarried), you can file as a qualifying widow(er) in each of the two years following the year of your spouse's death. This status allows you to use the married filing jointly tax rates.

Head of household: If you are ineligible to file jointly or as a qualifying widow(er), the head of household filing status may be possible. To qualify, you must provide support for a relative and meet several conditions.

Regardless of whether you file a joint return or a separate return for your spouse, you must write "DECEASED" across the top of the return, along with your spouse's name and date of death.

If you file a joint return and no personal representative has been appointed, write your (and your spouse's) name, address, and Social Security number in the regular name/address space at the top of the return. To sign the return, write "Filing as Surviving Spouse" in the space for your spouse's signature, then sign in the space for your own signature. If you are not filing a joint return, write your spouse's name at the top of the return and the personal representative's name and address in the remaining space. If a personal representative has been appointed, he or she must sign the return. Again, you must also sign if it is a joint return.

Question: My husband and I are divorcing after 30 years of marriage. Will I still be able to receive Social Security retirement benefits based on his earnings record after our divorce?

Answer: Yes. If you already receive Social Security based on his earnings record, you'll continue to receive it as long as you live (or in some cases, until you remarry). If you don't receive Social Security yet, you can apply for a reduced benefit when you turn 62 or wait until your full retirement age if you want to receive an unreduced spousal retirement benefit. If you've been divorced for more than two years, you can apply as soon as your ex-husband becomes eligible for benefits, even if he hasn't started receiving them (assuming you're at least 62). However, if you've been divorced for less than two years, you must wait to apply for benefits based on your ex-husband's earnings record until he starts receiving his own benefits.

You don't have to worry about losing your benefit even if your ex-husband remarries. Benefits for a divorced spouse are calculated separately from those of a current spouse.

Question: I'm getting remarried. How will this affect my Social Security benefits?

Answer: If you're receiving benefits based on your own work record, your benefits will continue. If you're receiving spousal benefits based on your former spouse's work record, those benefits will generally end upon your getting remarried, but you may be able to receive benefits based on your new spouse's work record, or on your own.

If you're a widow(er) under age 60, or you're disabled but under age 50, remarriage ends any benefits based on the record of your deceased spouse. However, if you remarry after age 60 (or after age 50 and are disabled), those benefits remain intact, unless you get spousal benefits through your new spouse (at age 62 or older) if those benefits are higher. If your second marriage ends as a result of death, divorce, or annulment in less than 10 years, you will again be eligible to collect benefits on your first spouse's record. Benefits paid to a disabled widow(er) are unaffected by remarriage.

Note, too, that if you were the working spouse during your first marriage, your remarriage does not change the Social Security benefits paid to either your new spouse or ex-spouse. Because the rules surrounding payment of benefits are complicated, and depend on your particular situation, contact the Social Security Administration at (800) 772-1213 for more information.

If you have any other questions, please call 609-489-5200 or submit an Ask A Question form online.