Social Security Divorce Arithmetic Adds Up to One and a Half

by | Aug 11, 2021 | social security, Social Security benefits and estate planning

Getting a divorce later in life can really put a crimp in retirement and estate planning, Lisa Zeiderman points out in Financial Advisor Magazine. At Geyer Law, we agree. Often called upon to draft estate planning documents for second marriages, we know how important it is for estate planning to happen in conjunction with the divorce itself.

Basic estate planning “re-do” areas might include:

  • creating new will and trust documents
  • naming new executors
  • naming new beneficiaries and contingent beneficiaries on life insurance and retirement plans
  • redoing power of attorney and healthcare power of attorney documents

One important retirement planning question that must often be dealt with post-divorce concerns Social Security benefits.

The Social Security Administration is very clear about this matter, Zeiderman observes. An ex-husband or wife may choose to receive his or her own benefits or to receive benefits based on the ex-spouse’s social security contributions. There are four caveats:

  1. your marriage had lasted ten years or longer
  2. you have not remarried
  3. your ex-spouse is age 62 or older
  4. the benefits you’d receive through your ex-spouse’s earnings are greater than those for which you qualify on your own.

The spouse who had been the higher earning one can receive their full benefit, while the one who had been nonworking (or lower-earning) can receive half that amount.”This means that the government will pay 1.5 times the Social Security benefit in the case of a divorced couple” is the way Zeiderman explains “Social Security arithmetic”.

In her article, the author is addressing financial planners, encouraging them to work together with a client’s divorce attorney to make the transition process smoother. In fact, our attorneys at Geyer Law often consult with our client’s divorce attorney and financial planner in order to be sure all legal, estate, and financial planning decisions are in sync.

– by Rebecca W. Geyer