This was originally published on Monday, June 29, 2015, in the Pacific Daily News. Click here to subscribe to the PDN.
Q: My common-law husband and I have been living together for more than 10 years. We have two children and share the mortgage, utility payments, car notes, and almost everything else has been split fifty-fifty. We do not plan on getting legally married. Am I entitled to Social Security spousal benefits or to his survivor benefits?
A: Your situation is not one that is uncommon. In fact, this is becoming more and more common. The Social Security Agency usually requires you to have a formal marriage to receive spousal or survivor benefits. The Social Security Agency requires that you are married for at least nine months before the date of death to be able to claim survivor benefits.
Although this is becoming a more popular choice of union, laws and benefits are slow to change.
According to the Social Security Agency website, a common-law marriage must be recognized by the state of residence. It all depends on the local state laws. Social Security rules usually follow state laws when determining eligibility for spousal and survivor benefits. If your state recognizes your union, you will qualify to receive the same benefits as someone in a traditional marriage. If not, it is not impossible but will be very difficult and costly to claim.
Eligibility for these benefits requires a lot of documentation. Documentation will include bills and expenses shared by the couple. Bank statements for joint accounts and maybe even wills. You should hire a lawyer who is more familiar with local laws. Be prepared to cut thorough a lot of red tape and paperwork. If you find out that you do not qualify for spousal or survival benefits you both should try to maximize your Social Security benefits.
• Patience is a virtue. Remember, you are eligible to receive benefits at 62 years of age but at a lower percentage than your full benefit. I recommend waiting until at least your full retirement age or even 70 years old to claim. As you get closer to that magic number of 70, your benefits start increasing. At 70, you have maxed out your benefits. Waiting till after 70 years of age does not give you any extra advantages.
• Previous Divorce. If either one of you have been previously married for at least 10 years and never remarried, you are eligible for spousal benefits. You can claim your spousal benefits at your full retirement age; then when you turn 70, file for your full Social Security benefits. If you are eligible, you will get 50 percent of what your ex-spouse’s benefit without affecting their benefits.
• Widowed from a previous marriage. If you were previously married and your spouse passed away, you could be entitled to their survivor benefits. There is no age which is optimal to start claiming your survivor benefits. You can claim survivor benefits at any age and once you reach 70 years old, you can switch to your individual benefits if it pays more.
Your children, depending on how old they are, could be eligible for either your or your husband’s survivor benefits. Just ensure that they are listed as your beneficiaries.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.