When couples divorce, particularly in an older or “Gray Divorce”, one or both spouses may be collecting their Social Security benefit or expect to begin collecting it shortly after the divorce is final. Social Security income is considered an income stream when it comes to tallying up assets in a divorce.
How that income is divided is basically the same as any income is divided. However, the division must comply with Social Security requirements.
Collaborative Divorce and Division of Social Security Income
There are divorce cases where one spouse’s Social Security income is not very much since that person did not work outside the home to generate income. In that scenario, some of the Social Security income of the spouse who did work outside the home during the marriage may be divided between the parties.
The income is divided the same as other income, but the Social Security Administration has strict rules and regulations and criteria that must be met for the income to be divided.
During the collaborative process, the parties will meet with a neutral financial professional to review their Social Security benefits. The advisor aids with the division plan to be sure it meets the Social Security Administration’s (SSA’s) requirements. That way, everyone understands how the funds may be legally divided.
Divorced Spouses Can Collect Social Security from Their Ex’s Benefit
The SSA has a provision that allows a divorced person to collect benefits from their ex-spouse’s account. This does not affect the amount of the spouse’s benefit, nor does it affect any benefit to which the ex’s new spouse may be entitled. To qualify for this benefit certain criteria must be met:
- The marriage lasted at least 10 years.
- You have not remarried.
- You are at least 62-years old.
- Your ex -spouse is entitled to collect Social Security or disability benefits whether the ex is actually collecting them.
- The collection of a spousal benefit does not affect your spouse’s amount. Your spouse will still get his or her full 100 percent of benefits.
There are some caveats that may affect your eligibility to collect on your ex -spouse’s account. Check with your legal counsel or the Social Security Administration to determine your eligibility.
For more information about how Social Security payments are divided during the divorce, or about how to collect on your ex -spouse’s account if you are already divorced, contact us at Heberger & Company An Accountancy Corporation.