Divorce And Social Security
Under the federal law, which preempts California law, social security benefits are not divided during a divorce. The law treats social security rights as the contributing spouse’s separate property, which is not a part of the divorce settlement. This is an exception because all other retirement benefits may be considered as community property in California. Your social security rights in an Orange County divorce are non-negotiable and non-litigable.
You have Derivative Rights to Ex-Spouse’s Social Security
Although social security in California is non-transferable, and even if your ex-spouse wants, they cannot assign the rights to you. However, you will have derivative rights to a part of your ex-spouse’s social security in the event of divorce, if all of these conditions are met:
- Your marriage had existed for at least 10 years
- You are at least 62 years of age
- You are unmarried
- Your former spouse is eligible to receive social security
- The amount of social security benefit from your own employment is less than what you may receive based on your ex-spouse’s employment
If all of the above conditions are fulfilled, you will have a choice to receive either the full amount of your own social security, or 50 percent of your ex-spouse’s social security. In any case, you will not be entitled to receive both.
Social Security is Treated differently from Pension
Pension plans are often a high-value asset in many divorce cases in Orange County. In simple terms, your pension benefits are the credits you earn during your employment towards your future income. When you start earning those credits will depend on the terms of your employment contract.
Pension plans are distinct from a 401K or IRA plans where the financial contribution that you and/or your employer make to the plan can be withdrawn early or borrowed with conditions. Unlike these plans, a pension plan does not put actual money in your account. Therefore, the payments based on your employment credit can only be disbursed after your retirement.
Social security, on the other, will be treated as separate property in the event of a divorce. This distinction between social security and other retirement benefits for the purposes of property division in a divorce is sometimes hard to understand for divorcing couples. You may wonder why the social security benefits entirely belong to the contributing spouse in a divorce, while their pension benefits are split 50/50 between the spouses.
Legal Conundrum Addressed in a California Divorce Case
In theory, an ex-spouse may receive 100 percent of their own social security benefits, plus 50 percent of their spouse’s pension benefits. In effect, one spouse gets 150 percent of the total retirement benefits of the two parties, while the other spouse only gets 50 percent of their own pension benefits.
The California Court of Appeal addressed this legal conundrum in one of its decisions. The wife in this case had appealed the decision of the trial court that she was not entitled to any part of her husband’s social security, while her own county retirement benefits were ordered to be split 50/50 with her husband.
The California Court of Appeal finally reaffirmed the ruling of the trial court that the appellant’s husband was entitled to keep 100 percent of his own social security benefits plus was also entitled to get 50 percent of his wife’s county pension benefits.
The wife in this case proposed numerous remedies to the Court of Appeal to rectify the fundamental unfairness in this type of division of retirement benefits, but the Court did not accept the wife’s contention.
The Court relied on the mandate of the federal law, which says that social security benefits of a spouse are separate property, which cannot be divided in a divorce, or even otherwise offset. However, pension benefits of a spouse are community property, which must be divided equally as per California law.
What Happens in case of Death of an Ex-Spouse?
If your former spouse dies after the divorce, you are entitled to receive 100 percent of their social security benefits as a widow or widower, subject to the following conditions: (a) Your marriage existed for at least 10 years; and (b) You are not currently remarried (or your later marriage already ended by divorce or death).
Division of retirement benefits is a complex issue in California, and the stakes can be substantial particularly in a high asset divorce. Working with a seasoned Orange County family law attorney will place you in a strong position to achieve your property division goals in the swiftest and best possible manner.