How Social Security Benefits May Impact Your Estate Plan
When planning your estate, you should find out whether your dependents will be eligible for any income assistance to help in your absence. This type of income planning may help in deciding how to name beneficiaries on your retirement accounts, annuities, brokerage accounts, and bank accounts. It may also help you decide whether you need to purchase additional
life insurance to provide for your spouse, children or other dependents.
If you want to find out whether your spouse, child, parent, ex-husband, ex-wife or other family members will be eligible for Social Security benefits after your death, contact your local Social Security office.
Social Security Benefits and Burial Expenses
As the cost of funeral arrangements continues to increase, many families have trouble paying expenses for burial or cremation when a relative dies. The surviving spouse or child of the deceased may apply for a one-time Social Security payment of approximately 255.00 dollars, if certain eligibility requirements are met. This benefit amount is not enough to cover the full cost of any type of disposition of remains. However, it could be used to pay a small portion of such costs.When applying for benefits after the death of a parent, spouse, partner or child, you will need a death certificate. See
how to obtain a death certificate.To learn how much it typically costs for a funeral, burial, and cremation in the United States, see
can I afford a funeral.If you are unable to pay the cost of final arrangements for a relative, see our page on
Will Your Heirs Be Eligible for Survivor Benefits?
When a worker who has paid Social Security taxes dies, the deceased worker’s spouse or other relatives may be eligible to receive Social Security survivors benefits. The number of years of work required for eligibility depends on the deceased worker’s age at death.Survivors who may be eligible for benefits include widows, widowers, unmarried children, children who were disabled prior to age 22 that remain disabled, parents age 62 or older that were dependents of the deceased worker, and in certain circumstances, adopted children, stepchildren, and grandchildren. If you are divorced, remarried or retired, this may affect your eligibility for Social Security survivor benefits. An ex-spouse of the deceased worker may be eligible for a widow's or widower's benefit. See also
spousal share.A free guide on Social Security benefits available to survivors is available on the Social Security website at www.ssa.gov. Information is also available by creating an account and viewing your benefits online at www.socialsecurity.gov.
Executor Duties and Social Security
There are a few steps the executor of an estate must complete with regard to Social Security. First, the executor or personal representative of a deceased person's estate should make sure the Social Security Administration is promptly notified of the decedent's date of death. The funeral director will typically provide this notification to Social Security if you provide the funeral home with the decedent's social security number. To contact the Social Security Administration to report a death, call 800-772-1213. If you are deaf or hearing-impaired, call 800-325-0778.
Also, if the deceased person was receiving Social Security benefits, the payments received for the month in which decedent died and any months after the month of death must be returned to the government. The decedent's estate or the representative payee that received them is liable to repay these benefits to Social Security. Any overpayment of Social Security benefits must be repaid.If the Social Security payments were received by the deceased or the representative payee via direct deposit, they will be debited back out of the account or reclaimed by Social Security. Therefore, the person settling the estate needs to keep the account open for the time period required for the funds to be taken back by Social Security. If the benefits were paid via check, the checks should be returned to Social Security. For instructions on how to return overpayments made to a decedent by Social Security, contact the Social Security Administration. Consult an accountant for assistance returning overpayments of Social Security.This article was updated on October 19, 2018.
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