Hi there,
Gray divorce is on the increase. As Boomers age they are deciding to divorce. There are a number of issues that are of particular importance. My very talented colleague Andrea Dunbar has written today about Social Security and Medicare benefits.
Best,
Nancy
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While each divorce case presents its own set of complex facts and circumstances, divorces involving older clients (also known as “gray divorce”) can be especially complex. Issues such as Social Security, Medicare, retirement benefits and estate planning are, more often than not, fringe issues when dealing with couples divorcing at other points in life. These issues come to the forefront, and sometimes become of critical importance when a divorce occurs later in life.
Social Security
It is important to know the ins and outs of Social Security when going through a divorce during advanced age. The rules of Social Security, like most other federal benefits programs, are counter-intuitive and often lead to surprising results.
A widow or widower at full retirement age or older receives 100% of a deceased spouse’s basic Social Security benefit amount. The same is true even if the spouses are divorced, as long as they were married for at least ten years and the spouse seeking to collect benefits is not remarried. Johnny Carson provides an interesting illustration of this rule: He was married four times, each marriage lasted at least ten years, and none of Johnny’s former spouses remarried. Upon Johnny’s death, all four of his ex-wives qualified for and received an amount equal to his full Social Security benefit.
The Social Security Administration provides a benefit option to married and divorced spouses known as “claim and suspend.” Claim and suspend allows a married or divorced couple to simultaneously take advantage of spousal benefits and delayed retirement credits. A former spouse of a worker who has reached full retirement age and claimed benefits upon reaching full retirement age her/himself, may claim and suspend, and receive an amount equal to 50% of the worker’s benefit each month without affecting the former spouse’s ability to continue to work until age seventy (70); thus, earning delayed retirement credits which increase the former spouse’s ultimate benefit. This of course is so long as the former spouse is not remarried and the marriage lasted at least ten years.
Some state courts take the position that making an equitable division of Social Security benefits upon divorce violates federal law. Where one spouse worked and the other stayed home, or both spouses worked but one spouse was the higher wage earner, the Court’s refusal to make an equitable division of Social Security benefits can result in serious inequities, especially when a couple is divorcing at or after full retirement age. Some courts remedy this inequity by assigning a larger share of marital assets to the spouse with the lower social security payout.
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