Smart Money

DEAR BRUCE: Recently, my family has been forced to place my father in an assisted living facility. We have sold his residence for $350,000 to pay for the $5,500 to $6,000 monthly costs for the facility. Due to his monthly rates being raised in the future, or for additional care as his health further declines, I don’t know what the future costs may be.

I hate to see the $350,000 sit in the bank, collecting a little more than 0 percent interest. Being the son assigned power of attorney and medical proxy, I must make a decision on what to do with this money. I’m leery of investing anywhere where there’s a chance of loss for his future care. — C.A., Massachusetts

DEAR C.A.: In an assisted living facility, the costs can be as high as $70,000 a year. I know that you live in Massachusetts and that costs can be considerably higher there than in some Southern states. In Florida and some other warmer states, geriatrics is an industry, and it is very competitive. There are very good assisted living facilities in Florida where $3,000 a month would be considered a reasonable top-of-the-line facility.

I know it would be nice to have your dad around, but a reduction of this kind might be very much to your advantage. At the rate you mentioned, $350,000 could be gone, even with the interest it earns, in a matter of six or seven years. Given the relatively limited amount of money available, you might wish to consider relocating.

DEAR BRUCE: My husband and I have a 15-year-old will that was done in Michigan before we moved to Florida, and the home that is in the will has been sold. We now own a home in Florida. Does this go to probate if something should happen to us? Do we need to redo the will, and about what does it cost to have this done? Also, we have a living will. — B.S.

DEAR B.S.: The living will simply explains what you want to be done in a medical emergency. For example, if you need to have extensive things done in order to keep you alive. A living will has nothing to do with a regular will and testament.

The question is, should you have a new will drawn up? After 15 years and because you have a new house in Florida, it would seem to me that redoing the will should be considered. It’s an inexpensive proposition, somewhere in the neighborhood of $200 to $300.

DEAR BRUCE: I got a phone call from the IRS about two years ago, informing me that my ex-spouse was applying for Social Security based upon a portion of my income. I was assured that it would not affect my Social Security benefits in any way. I thought that you might want to share this with your readers before too many people in the same situation are outraged by the idea that it might affect their benefits. — H.K.

DEAR H.K.: I get many questions with the same concern you’ve expressed. People are afraid that if an ex-spouse is applying for Social Security benefits, their own benefits will be reduced in some way. It will not happen.

If you and an ex-spouse had been married for over 10 years, your ex may then apply to have a portion of his or her Social Security benefits based upon your earnings. As a practical matter, people are outraged by the idea that doing this could affect their benefits, but that is not true, and there is no reason to be outraged.

DEAR BRUCE: My ex-husband of 12 years caused me to go into bankruptcy and lose two homes and most of my retirement. He had moral issues, could never keep a job, and left me to finish raising our children. He has remarried and now done the same thing to his new wife.

Is there a way for me to draw on his Social Security? I am 63 years old and still work. He is 60 and probably not working since he couldn’t hold down a job. He owes me over $80,000, but I will never see this money.

What would you suggest? I will be working at least until I’m 66, and hopefully longer. — B.M.

DEAR B.M.: All the things you mentioned are important to you, but have absolutely no bearing on claiming any benefits you may have because of your marriage. The only thing that is important is that the marriage lasted over 10 years.

First you will apply for Social Security without any mention of him. After that is accomplished, you can then apply to the Social Security Administration with the information of his earnings. If you are entitled to more Social Security, so be it. You don’t have to consult with him, and I don’t see any reason to bring it to his attention at all. However, it’s necessary to do the filing in the sequence I provided. Good luck.

DEAR BRUCE: My husband and I have been married for six years. When we wed, he moved into my house, and we rented out the house he shared with his late wife. I’d expect that whatever assets a spouse has should go to his wife in the event he precedes her in death, but his daughter seems to feel that his house should come to her because he shared it with her mother.

My husband is 20 years older than me, not that this makes any difference. It is more than likely that he will predecease me. Who will this house go to? By the way, my husband will not make a will. — G.G.

DEAR G.G.: In the event that your husband doesn’t make a will, at least one-third of all that he leaves behind will come to you and possibly more. That’s just the way the law is. As to whether the house should come to you or not, it is simply a matter of the way you and your husband feel. But if he won’t have a will, then how is he going to transfer it to you?

It seems to me that you can come to an arrangement in which the house will come to you, and wouldn’t be sold unless some extenuating circumstance applies. Then you, in turn, can leave the house to his daughter. This could turn ugly and needs to be worked out now. Include a will for each of you.

Send questions to bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.

The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com. It is also available at www.brucewilliams.com