An often-overlooked part of estate planning is social security. We often hear that social security is not enough for an individual to live on during retirement, especially given that people are living longer lives and often require additional medical care when reaching an advanced age. However, social security can actually be an important part of your retirement planning – and consequently an important part of your comprehensive estate plan. That means that social security survivor benefits could play a bigger role in your retirement and estate planning than you may have thought.
How do survivor benefits work?
Credits are an important part of determining what social security benefits a person is eligible for, if any. Workers earn credits through their individual earnings each year. The maximum number of credits a worker can earn in a year is four. You must attain a certain number of these credits over your lifetime in order to qualify for certain benefits. If you take a break from working for a number of years, your credits still remain on your social security record and you can begin accumulating them again once you return to the workforce.
In order to allow your family members to have access to your social security benefits as survivors if you were to pass away, you must have an adequate amount of credits. The number of credits required for access to your benefits depends on your age when you die, with the maximum amount of credits required being 40 – or the equivalent of ten years of work. Once you have attained enough credits for your family members to qualify, they may be able to access your social security benefits after you die.
There are a number of specific requirements an individual may need to meet in order to qualify to receive survivor benefits. An experienced estate planning attorney can work with you and your financial planner to understand more about how to qualify for survivor benefits and may also be able to work with you to determine which of your family members – if any – may qualify for these benefits and how much these benefits may amount to.
Benefits of Survivor Benefits
While not likely to make any spouse or children rich, survivor benefits can play an important role in your estate planning. You can make important determinations more accurately about long-term health care options and other estate planning vehicles related to planning for long-term health care and other retirement needs while considering the role survivor benefits could play for your family. Survivor benefits can act as an extra security blanket, and may even be able to ensure that your spouse and family members are able to live comfortably with additional financial security if you pass away. It is important to explore what place, if any, social security survivor benefits may have in your estate plan. That means you will need to consider tax consequences of receiving such benefits and other mechanisms that you may be able to employ to get the most out of survivor benefits your family may be entitled to. An experienced estate planning attorney can help you understand the role social security survivor benefits might play in your estate planning practices.