Does a spouse automatically inherit everything if widowed and what about Social Security benefits?

While we don’t want to think about it, death is an inevitable part of life. Even as we get older, some of us put off getting our estates in order, sometimes too late. This can cause headaches for the surviving spouse and family.

Only about a third of states have laws that dictate that a spouse will automatically inherit all of their deceased spouse’s assets in the event that there is no will or testament. In the other states, the deceased’s estate will be divided up between the surviving spouse and any children, including from previous relationships, in varying proportions depending on the state’s law.

Don’t count on your spouse automatically inheriting everything

The brokerage Merrill Edge notes that certain assets are inherited completely by the surviving spouse, but others require some action before a person dies. For example, “if you and your spouse owned a residence as joint tenants, you inherit the house.” Likewise, the same holds for a jointly owned brokerage account.

In the case of IRAs, and life insurance policies, these will be inherited by whoever is named as the beneficiary. In the case of an employer-sponsored retirement plan, under federal law, unless you have waived the right in writing, the plan’s holder is required to name their spouse as the beneficiary.

However, non-community property, which wasn’t acquired during the marriage nor jointly owned, may be divided between a spouse, children, or other family members, if there are any. In order to avoid any complications, it is highly recommended to speak to a lawyer to set up a will and testament to smooth the process of transitioning one’s estate to the chosen heirs.

Social Security benefits for survivors

The Social Security Administration provides survivor benefits to spouses, children, and even parents of deceased beneficiaries and ex-spouses. There are different requirements for collecting these benefits depending on the relationship between the deceased and the survivor wishing to claim the benefits.

Once a spouse has died, the SSA urges those who believe they would be eligible to receive survivor’s benefits to do so quickly, as many payments are not retroactive.

Depending on your situation, a surviving spouse may be able to claim spousal benefits based on the deceased spouse’s work record. However, while the SSA will pay you the higher of the two when you claim, you may want to run the numbers to see if it is better to hold off collecting one over the other to improve your monthly payments in the long run.

The SSA also offer a “Special Lump-Sum Death Payment” to help families with end-of-life costs. The payment is worth $225 and is typically “paid to the surviving spouse who was living in the same household as the worker when they died.”

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