A greedy friend eyes a suitcase of (suspected) drug money

Dear Liz: A person I know who is in his 80s and very wealthy recently described having a suitcase of old cash. The bills date from the time before the electronic strip was introduced. He said, “I don’t know what to do with this.” Long ago he sold marijuana. I immediately thought that this should pass into the hands of those who are struggling (which includes me). How could this be done legally?

Answer: Your acquaintance should talk to his tax pro. Money is supposed to be declared to the IRS as it’s earned, and that includes proceeds from illegal activities.

There are statutory limits to how long a person can be prosecuted for dealing drugs. There’s no statute of limitations, however, if a taxpayer files a fraudulent return or fails to file a return at all. That’s how the feds ultimately got gangster Al Capone: He was convicted of tax evasion for failing to file tax returns declaring his illegal income.

What your acquaintance should not be doing is talking to anyone else about this cash — particularly someone whose immediate thought is how to get their hands on it. He should consider getting evaluated for cognitive decline, and putting measures in place to protect himself from fraud and elder abuse.

When using payment apps, confirm before hitting send

Dear Liz: You’ve recently written about Zelle and other payment apps. I had a neighbor pay an amount to the wrong phone number. Uh-oh. When I needed to pay someone recently, I asked them to request the amount using my phone number on Zelle. In this way, granting their request would assure that my payment would go to the correct person.

Answer: That’s excellent practice. People new to the apps often don’t realize there are options for users to request payment as well as send money. A user request can help ensure the money gets to the right place — as long as the sender knows the person and is expecting the request.

Requests for money out of the blue should always be regarded with suspicion. If you don’t know the person, report the potentially fraudulent request to your bank. If the request seems to be coming from someone you know, pick up the phone and confirm they made the request before sending any money.

A remarried military widow navigates Social Security survivor benefits

Dear Liz: My wife of 15 years is now 58 and I am 62. She is a military widow who was married for 17 years before her previous husband’s death. I believe she is ineligible to collect on her deceased spouse’s Social Security record because she married me. Is that right? Instead, can she collect her much smaller benefit starting at 62? I plan on waiting to apply until age 70. Can she switch from her reduced amount to half of mine at 67?

Answer: You’re correct that your marriage would prevent your wife from getting survivor benefits based on a previous spouse’s earnings record. Only people who marry after they turn 60 can get survivor benefits from a deceased spouse while married to a live one. She also would be eligible for survivor benefits from her previous husband if your current marriage ends.

Survivor benefits can be claimed as early as age 60, or at 50 if the survivor is disabled, or at any age if the survivor cares for the deceased’s child who is under 16 or has a disability. Retirement and spousal benefits, meanwhile, can start as early as 62.

Such an early start, however, means accepting a substantial reduction in her checks. Her benefits also will be subject to the earnings test, which reduces benefits by $1 for every $2 earned over a certain amount, which in 2024 is $22,320. The earnings test disappears at full retirement age, which for her is 67.

Your wife can’t claim a spousal benefit until you file for your own benefit, but she’ll be able to switch from hers once you apply.

Since there are several complicating factors to this situation, consider using a paid service such as Maximize My Social Security or Social Security Solutions to investigate the best claiming strategy.

Liz Weston, Certified Financial Planner, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.