Dear Quentin,
I understand that, in a divorce, a spouse is not entitled to the money the spouse inherited if the funds are not combined in a joint account. I am in a situation where my husband inherited money after we got married. But I believe he made a big mistake: He put it into his own account.
For about 20 years – unbeknownst to me – he had money from his salary deposited in the same account as his inheritance. Now he is on Social Security, and all the amounts are also deposited into the same account every month.
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I still work, and we always file tax returns together. No taxes are withheld from Social Security income, so your annual tax refund is about 60% less than if your combined tax return did not include Social Security income.
If we divorce, I will be entitled to half of his separate account, because he has commingled joint income for 20 years with the amount of inheritance? Am I entitled to half of her Social Security income, just as she will get half of mine if I start taking it?
Wife in Texas
related: ‘He forced me to take Social Security at 62’: My husband inherited millions, but never gave me any money. If I divorce him, will I get it?
my wife,
I have good news – for your husband.
Your husband needs to manage his inheritance properly, especially since your marriage seems happier and you are considering divorce. They look that way, because you’ve been following the trail of money coming in and out of your account. I can’t blame you, but you’re not sitting on a golden goose.
Money transferred from a joint marital bank account to a separate bank account containing your spouse’s inheritance does not consolidate your inheritance. Texas is one of nine community property states, along with Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington and Wisconsin.
Cash transferred from a bank account with separate marital property to a joint bank account is considered joint. Separate marital property may include inheritances, funds from certain personal injury claims, money earned before the marriage or assets clearly purchased with money from that source.
There are other ways to consolidate an inheritance, according to the Hailey-Petty law firm, which has offices in San Antonio and Austin, Texas. “If inheritance funds are used to purchase or invest in jointly titled property or are used for the benefit of the spouses, this may also result in the inheritance being considered marital property.”
The law firm continues: “If the inheritance is used to significantly increase the marital property – like financing a major renovation of the jointly owned home – part of the inheritance can be marital property. Some states,” it added, “have certain circumstances where the inheritance can be considered as property marriage.”
Spousal benefits
People cannot receive Social Security spousal benefits until the spouse claims Social Security themselves. The amount received by the person will depend on whether the spouse starts claiming at 62, or whether the person waits until the full retirement age or maxed out the benefits by waiting until the age of 70 to claim.
Let’s be clear: If you claim a spousal benefit of up to 50% of your wife’s Social Security, it will not affect her benefits. If you earn $1,500 and your wife earns $5,000, you can claim it on her record and get $2,500, but you don’t get $4,000; you get the higher of the two benefits. People receiving higher benefits will not be affected.
If you want to receive spousal benefits after a divorce, you must be at least 62 years old and unmarried and you must have been married to your ex-spouse for at least 10 years. “You can claim benefits on your ex-spouse’s record even if they haven’t retired, as long as you were divorced at least two years before applying,” according to the Social Security Administration.
If you decide to stay married, you have the right to receive 50% of the benefits from your husband, assuming he is the higher earner. If you are the higher earner, so is your wife. This is an equal opportunity policy. While you can’t say who is making more money, it’s impossible to say who will (or will) benefit.
To be eligible for spousal benefits, “you must be 62 years of age or older or any age if you have a child younger than 16 in your care or have a disability and be eligible for benefits on your spouse’s record,” the SSA said. “If you choose to receive spousal benefits before your full retirement age, your payments will be permanently reduced.”
In the end, your wife’s inheritance is as safe as a house.
Another column from Quentin Fottrell:
‘My wife blew a gasket’: I bought a $20,000 Toyota SUV using financing. My husband said, ‘Pay me right away.’ Did I get a bad deal?
‘I’m trapped between warring brothers’: My late father left a ledger with an unpaid $80,000 debt to my brother. Can he be forced to pay?
‘This flies in the face of morals and ethics’: My father cut my sister out of a six-figure property. Should I resign?
