Getting divorced is generally acknowledged as a difficult endeavor emotionally, but its impact of your finances can also present challenges, especially in the often-overlooked area of retirement benefits such as Social Security.
To protect yourself, you’ll want to become well versed in the following ways that divorce can impact your Social Security benefits:
- Get to know the decade factor. If you’ve been married at least 10 years, and divorced for at least two, you can usually qualify for spousal benefits. That means you can choose your ex-spouse’s benefit if it is higher than your own claim.
- Decide to double up. If you qualify for a spousal benefit, the good news is that you can still claim that benefit and wait to claim your own benefit at a later date. This means you may ultimately obtain a higher benefit since you’re waiting until you reach full retirement age (currently age 70).
- Beware of early benefits. If you decide to take early benefits (between age 62 and 70) you will be required to take the higher of spousal or personal benefits. If you end up working, your benefits may be reduced because of earnings limits.
- Understand the repercussions of remarriage. If you get remarried you typically will lose the benefit you received from your ex-spouse. However, after a year of marriage you will be eligible for spousal benefits based on your new partner’s record. If you meet the 10-year threshold for more than one marriage, you can claim the higher of the two benefits. If neither former spouse remarries, they can both claim spousal benefits on your record.
In any case, you do not have to wait until your ex-spouse files for benefits before you file a spousal claim, as long as you are both at least 62 years old.
How Should Divorcing Couples Divide Rental Properties?
During the course of their marriage, many couples decide to invest in real estate, purchasing rental properties and earning incomes off of them. But these real estate holdings can make the property division process more difficult if these couples decide to get divorce.
The following are some of the key considerations to make when dividing shared rental properties between divorcing spouses:
- Valuation: One of the first steps you should take is to value your real estate, including the land and the building itself. To do this, a real estate broker must analyze sales of nearby and comparable properties. If the rental property has positive cash flow, it will add to its value.
- Potential sales: In many situations, the couple may choose to sell the property. If it sells for less than the mortgage balance, the owners may need to liquidate other shared assets to pay the rest of it off. If there is a profit from the sale, both spouses will usually divide it evenly.
- Tax issues: Location and state tax laws can have a significant impact on the value of a piece of real estate. In addition, selling a rental property may have negative tax consequences for one or both parties, so it’s important to speak with a lawyer before moving ahead with any transactions.
Free Consultation with a Utah Divorce Attorney
If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will fight for you today.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506