Social Security: The Forgotten Asset in a Divorce Case

Social Security Retirement Benefits are seldom addressed in divorce cases or even addressed by divorce lawyers. Why? Because Social Security is a federal benefit, federal law preempts or trumps state dissolution of marriage (divorce) law, and federal law specifically provides that Social Security Retirement Benefits are not divisible in a divorce case (See § 404.331(e), Code of Federal Regulations). Further, numerous Florida state appellate court decisions, citing federal law, have held, and affirmed that Social Security Retirement Benefits are non-marital assets and therefore not subject to equitable distribution pursuant to Florida Statute § 61.075.

Below are answers to several questions we often get on this topic:

1.  Are you telling me that a spouse who did not work outside the home for nearly three decades and raised five children will not receive any social security benefit because they did not have earnings for their work in the house and therefore did not pay tax any earnings?^[1]

This seems like a grossly unfair penalty for the stay-at-home spouse. Luckily, in the late 1970’s, Congress agreed and enacted a law which will allow former spouses who meet certain criteria (described below) to share in the Social Security Retirement Benefits accumulated by their employed spouses at their retirement. The good news for the spouse that was working and paid into the Social Security System via taxes on their earnings is they will not have their Social Security Retirement Benefit diminished when their former spouse applies for and shares in your Social Security Retirement Benefit.

2. What are the requirements for a former spouse to share in their now former spouse’s Social Security Retirement Benefit?

Sections 404.331(a)-(f) of the Code of Federal Regulations control and establish these requirements.  They follow:

• You are the divorced spouse of the person receiving the Social Security Retirement Benefit;
• You were validly married to your spouse under state law;
• Your valid marriage lasted for at least 10 years immediately before your divorce became final;
• You apply for Social Security Retirement Benefits;
• You are single;
• You are age 62 or older (when you apply and meet all other conditions above); and
• You have been divorced from your former spouse for at least two years.

It is noteworthy that, to share in these benefits, a former spouse must meet all the criteria outlined above to qualify. In addition, a former spouse can commence receiving their benefit once their former spouse is at least 62 years old. However, this will be limited to either: (1) your benefit or (2) one half of your former spouse’s benefit, whichever is larger. At their full retirement age, the former spouse’s benefit cannot exceed one-half of your full retirement amount. You do not get to “double dip.” The good news is your former spouse’s re-marriage will have no impact on your receipt of your share of their Social Security Retirement Benefits – only your remarriage would prohibit you from being eligible to receive these benefits. 

3. What documents do you need to apply for Social Security Derivative Benefits?

You will need the following documents:

• Birth certificate;
• Proof of US Citizenship;
• W-2 Forms and/or self-employment tax returns for last year
• Final divorce decree (of Final Judgment of Dissolution of Marriage); and
• Marriage certificate

Because Social Security Retirement Benefits are non-marital assets in a divorce case, this issue does not receive the priority it deserves while your case is pending. Therefore, we strongly advocate you working with a wealth manager who while provide a comprehensive plan for all your assets and sources of income contemporaneously with your divorce case. Clearly, the amount of your Social Security Retirement Benefit and when to begin taking it are major issues that need to be taken into consideration when you begin discussing cash flow in your retirement years.

Originally Published: February 2022

Author: Pat Kilbane, CDFA

Pat Kilbane is the Director of Divorce Advisory Group, an affiliate of Ullmann Wealth Partners, and is also a Wealth Advisor. Prior to joining the firm, Pat practiced family and matrimonial law for nearly a decade. He had previously worked as a Shareholder for the statewide law firms Gray Robinson, P.A. and Rogers Towers, P.A. Pat is the Co-author of Move Forward Confidently: A Woman’s Guide to the High-Net-Worth Divorce.

[1] The fact pattern could also include a spouse that earned substantially less than the other spouse during the marriage and consequently would end up with a much smaller Social Security Benefit than their now former spouse.