<p>A good friend had her MD-husband of over 40 years die earlier this month. He was in or beyond his 80s and she is early 60s. They lived a comfortable lifestyle and were pretty happy. He started making questionable financial choices about the time I met her in 2007. He ran up HUGE debts on credit cards and elsewhere. When they sold their home, he somehow squandered their 6-figure profit but was unable to tell her where it all went. He also stopped paying income taxes & she had to settle with the IRS & repay them gradually. </p>
<p>She just learned that apparently, he did NOT chose to leave her with ANY survival benefit from his pension and how she has to scramble around & see what benefits she MAY be entitled to as a surviving widow. She will also have to pore through the old tax returns for some hint of whether there are ANY remaining assets that. She just finished paying of his hospitalization bills from November before learning all of this. With her meager income, she cannot remain i the rented home she had shared with her late H & is trying to figure out her options–taking in a room mate, moving & finding a new rental (tho all the “stuff” she has already fills their 3-bedroom home & carport. She may also try to find a part-time job to go with her full-time job, lots of folks are LOSING their jobs & not too many folks are hiring. Age discrimination may also work against her.
She was sadly stunned that she was left without ANY survival benefit to his pension. I encouraged her to write to any entity listed on the tax returns, to see if there are any accounts in his, her and/or their names.</p>
<p>I am very sorry for her. I assume she has no children.</p>
<p>Has she already paid the IRS? If no return is filed, she can file MFS and just pay on her own income. Did she have adequate withholding If there is missing income of his on a joint return year, she may be able to claim innocent spouse and not be liable.</p>
<p>kay- you may be correct. Even when the spouse signs off they may make a poor choice. For example in my pension plan the spouse loses medical benefits after the employee dies. I still see many people will only leave their spouse 50% of the pension. I am talking about a non-employed spoouse who never had their own retirement plan. These decisions really need to be discussed and thought out.</p>
<p>That’s one of the standard options. The “logic” is that one can live on half of what two lived on. It also provides a bigger benefit while both are alive, instead of a smaller benefit that remains unchanged when the first spouse dies. In making the decision which way to take the benefit, one is often gambling as to which spouse will die first.</p>
<p>Veryhappy- I know but when the non-employes spouse loses HC it changes the entire thought process in my mind. Plus I can live on less money than my spouse.</p>
<p>My mother had assets of her own, so she signed off the pension benefits, but what no one told her at the time was that she was also signing away her health benefits. It was a real scramble (and an expensive one) when my Dad died. </p>
<p>My husband’s mother (who did all the finances in their family) had dementia and made some terrible decisions as she was first becoming ill. It took us a while to recognize what was going on, and basically we ended up having to send their mail to a PO Box, give them an unlisted number and steal the checkbooks in order to put an end to it.</p>
<p>Tom, you do raise an interesting point. There was something wrong with this guy, imvho (not filing tax returns???), and OP may want to suggest her friend contact the pension administrator and ask. Where I work, if you are married, your spouse has to have signature on any sign off notarized. She may want to ask to see paperwork.</p>
<p>Leaving 50% to your spouse isn’t always a bad option but usually with a pension that means you were getting 50% all along. Some pensions allow a 75/25 split though, is that what you are talking about? </p>
<p>It isn’t always a bad thing to take the 100% option on a pension but both spouses should be in on the planning details.</p>
<p>This is sad; I have an aunt who is finding that she is in a similiar position. I admit, my first thought was how could someone with a spouse in his 80s NOT have made sure she knew what her finances would be like when he died, but it’s not that simple. </p>
<p>Her husband had children from a first marriage, and she thinks that a lot of the money went to them - maybe with the understanding that it would be repaid “some day.” But there’s nothing in writing that she knows of, and she doesn’t expect them to step up to support her. She will have a major life style change, and she will be hurting.</p>
<p>Second marriages can make pensions difficult too. Through my first marriage I will get a substantial piece of his pension. I do know my Ex has given and will give substantial amounts to our child. There is no understanding it will get repaid.</p>
<p>Divorce situations often improvish a current wife or children. When a beneficiary is listed on anything, that supersedes any will or trust document so it may very well be that someone said in a will that they want $$$$ to go to current wife, if they never changed the beneficiary on their 401K plan or life insurance plans, 1st wife (or whomever is listed) gets the money. Heck, some people listed their parents as beneficiaries of their plans when they first started working and never changed that even without a divorce. Sure, the parents or first wife could “give” the money to the other person but then you run into gift tax issues. If you were one of the above, please check your policies…</p>
<p>Steve, I think divorce can just as easily impoverish first wife and her kids. Note the nuumber of threads we have seen from children of divorce. Fact is, many people can not afford two sets of kids, but do so.</p>
<p>I dont generally do pension work, but a quick scan of cases indicates that surviving spouses win pension, where at a minimum the plan document indicated the default was pension to spouse (I think 50%), and survivor did not execute notarized sign off.</p>
<p>kayf-that is also common and usually it’s the children from the first marriage that lose out, however, I’ve seen many cases where the surviving spouse gets nothing because the beneficiaries were never changed and people just assume that since they were married that that wife will ‘get everything’.</p>
<p>My question is, where did the money go? When I first read the OP, I thought she was leading up to the discovery of the money, or the discovery of where it went. I guess I’m just curious because a friend of mine is going through a divorce, and is just realizing that her husband (soon to be ex) had a lot more money than he claimed when they were married. She just learned that he withdrew $7,000 in December, and $3,000 in January, and she has no idea what he did with that money. He left her at the end of January, and he had no money to rent an apartment. He’s currently living in his business office. It’s just strange. I don’t want to derail the conversation, I’m just making a statement.</p>
<ol>
<li><p>Has your friend copies of old tax returns? Does her ex work in an area where there can be unreported income? If the divorce isnt final, she needs to talk to her attorny real quick. They may need to find out where the excess money came from (it could effect any property settlement, Child support, etc).</p></li>
<li><p>My guess with OP, it really doesnt matter where the money went. Whether it was living beyond their means, gambling, mistress = its gone.</p></li>
</ol>