A Marriage With Mighty Few Assets

Question: I’ve been married since 1947 and don’t have a checking account, credit cards or a savings account. My husband never discusses his assets, stocks or his salary. Why, I don’t know. He keeps saying I’ll get my community property when he dies. What if I die first? I am 63 and not totally out of it . . . not senile, either. I feel like I’m living in Russia. I am in name only in this marriage. My husband says he doesn’t have a will. I have two married children and two grandchildren. He gets a Social Security check with both of our names on it. I put my signature on the check, but I don’t get a penny from him. What percentage of that check is legally mine? He keeps saying it’s his money that he worked for all these years and his Social Security number is on the check, so that makes it his. What are my rights?--Initials withheld

Answer: There are any number of problems--like this storybook romance of yours--that really cry out for the advice of someone other than a consumer writer. Isn’t there a family friend, a minister, or some other disinterested third party whom your husband respects and will listen to? No, I suppose not.

Community property or no community property, if your husband dies intestate, or without a will, the state will split up his assets by formula. In California, this follows the law of succession in the Probate Code, but it can get pretty complicated because the ages and relationships of everyone involved play a part in this.

Probably you will, indeed, get the lion’s share, which is one way--and, in your case, may be the only way--you’ll find out what he has in the way of assets.

What happens if you die first? Well, you’ll die first, that’s what, and your children and grandchildren will move into the breach. Maybe they’ll have better luck with Mr. Lovable than you’ve had.

It doesn’t really make any difference if the Social Security check bears his Social Security number. That would, of course, be the case if you have never worked and accumulated any credits on your own, which, I gather, is the case here. The law still takes the position that a part of that check, bearing both of your names, is yours.

Normally, when a retired husband and non-working wife, both 65, begin drawing their joint benefits in the form of one check, according to Joe Giglio, Social Security’s local public affairs spokesman, the dollar amount will represent 100% of the husband’s primary base benefit, plus another 50%, representing the wife’s benefit. When the husband dies--under this scenario--the check the widow will continue to receive will be scaled back to the husband’s full benefit. In other words, her half will disappear but she’ll never receive less than his full, primary benefit.

But we’ve got some unanswered questions in your case.

If your husband took early retirement, his primary benefit would be 80% of what it would have been if he had waited until he was 65, and your portion of the lumped-together check is smaller than half of it too, because you are only 63. What percentage of the check will revert to you when he dies also depends on how old he is then, and how many cost-of-living adjustments have been made to it in the interim, and how old you are when that unhappy day comes.

If you are 65 by then, you’ll get 50% of whatever his basic benefit is at that time. Depending on these variables, the closest Social Security can estimate it today is that after his death, you’ll receive somewhere between 82 1/2% to 100% of his primary benefit. He’s going to be pretty grumpy about not being able to take it all with him.

But here’s one cheery note: You don’t have to have both your benefits on the same check. You can request your local Social Security office to issue two separate checks each month--his in his name and yours in your name. And wouldn’t I love to see the look on his face when the first pair of checks turns up!

“Normally,” Giglio said, “it’s just more convenient to have them lumped together. But, in a case like this, I don’t think ‘convenient’ is the right word.”

Q: Because I’m nearing retirement, I’ve been investigating places to put my money for the highest yield. Someone suggested long-term bonds, so I’ve been looking at the listings in the paper. I don’t understand these too well, but it’s obvious that some of these bonds are paying very high yields, 12%, 13% or better. (The yield and the date of maturity follow the name of the bond in the listing, right?) If they pay so high, why does anyone invest in CDs or similar items only yielding 6% or 7%?--R.S.

A: I think you stopped reading, from left to right, too soon and that the paper where you are reading those listings is publishing--to save space--an abbreviated listing that omits the “Current Yield” category. Bonds are funny animals and that yield following the name of the bond doesn’t mean very much. That’s the yield promised when the bond was issued, but if you buy it later, the price you pay will reflect the yield at that time.

Here’s one, at random, with this notation after the name: 13s97, which, as you say, means a 13% yield on a bond maturing (you’ll get the face value back) in 1997. But the paper indicates that the current yield is 11.2%.

Why? If the current yield isn’t spelled out for you, the tip-off is in the current price of the bond, which is listed as 116 1/2. The bond is paying, sure enough, 13% interest or $130 per $1,000 of face value.

But, if you buy it today, you’ll have to pay the current price of $1,160 for that $1,000 bond, and you’ll still get $130 a year. And that’s a yield of 11.2%. Sure, it’s a good return by current standards, but the key question with bonds is whether it will look that good a year from now, two years from now, five years from now.

And remember, at maturity, you’re going to get back the face value of the bond, period. Not the 11.6% premium you paid for it.