Legal Name Changes Post-Marriage

When considering a name change following a marriage or any significant life change, it’s essential to understand the process and implications involved. A reader expressed a desire to revert to her maiden name if her husband passes away after years of using his surname. This situation raises several questions about the necessary administrative steps involved in a name change.

To legally revert to a prior name, you will need to follow a detailed process involving multiple steps:

• Update Identification: Begin with your Social Security card, followed by your driver’s license and passport. These documents are crucial for confirming your identity.
• Notify Relevant Agencies: Make sure to inform Social Security before filing your taxes, as the IRS uses your Social Security records for verification.
• Revise Other Documents: Once your IDs are updated, proceed to change your name on properties like voter registration, property deeds, bank accounts, insurance policies, and utilities.

If your marriage certificate was used previously for name changes, the same document could assist once more, alongside any required court orders if the process differs based on jurisdiction. Note that fees for a legal name change can vary significantly by state; for example, in California, costs range from $435 to $450, with a typical process duration of two to three months.

Spousal Benefits and Marriage Duration under Social Security

A reader inquired about eligibility to apply for Social Security benefits based on her spouse’s earnings after years of marriage, particularly in light of recent changes to the Social Security Fairness Act. With four years of marriage to her spouse, she seeks to understand how long she needs to wait to access these benefits.

According to the Social Security Administration, you must be married for at least “one continuous year” to qualify for spousal benefits. It is essential to note that different rules apply if you have been divorced. Specifically, divorced individuals can only claim benefits if their marriage lasted at least ten years, and two years must have passed since the divorce.

The Social Security Fairness Act has amended prior provisions that limited benefits for individuals receiving pensions from jobs that did not contribute to Social Security. Most people affected by these changes will see their benefit adjustments in April, providing an opportunity for those previously ineligible to apply for Social Security benefits.

Tax Implications of Selling Your Home

As individuals age, decisions about housing may shift, such as selling a long-time residence in favor of renting. One reader’s question centered on potential capital gains taxes from selling their home, seeking clarity on whether they can retain the full proceeds from the sale.

Any profits from a home sale may be subject to capital gains tax, calculated by subtracting your tax basis (what you initially paid for the home plus any qualifying improvements) from the net selling price. If you’ve lived in the home as your primary residence for at least two of the last five years, you can usually exclude up to:

• $250,000 of capital gains if filing as an individual
• $500,000 if filing jointly with a spouse

It’s important to understand that any profits exceeding these thresholds may incur taxes. Furthermore, significant capital gains could influence your future Medicare costs, as the “income-related adjustment amount” (IRMAA) is based on your income from two years prior. Therefore, a large gain in one year might affect your Medicare premiums in the subsequent years.

Before making any decisions about selling your home, consulting with a tax professional is advisable to fully grasp the implications and ensure you navigate the process smoothly.