Question: My husband and I have been separated for almost a year now. We were married for 12 years. Long story short he cheated. I tried to stay to work things out, but I couldn’t. I just want to know what I am entitled to as far as pensions, social security, if he passes a way, etc. once I file for divorce.
Answer: Divorce is expensive at so many levels.
Common sense would suggest divorce cuts what you have in half. My experience with divorcing couples is that somehow in the whole messy process both parties somehow end up with less than half, financially and otherwise.
It’s not always this way…it doesn’t have to be this way…it’s just that, too often, it is.
It sounds like you are not yet legally divorced, though you feel that way emotionally. Here are some things to keep in mind as you contemplate your next steps.
Seek legal guidance ASAP. You may feel split up, but as I understand it, you remain married (though separated). I am not an attorney, so don’t take anything I say as legal advice. But you may remain vulnerable legally and financially by remaining married, while acting divorced. Don’t take my word for it – talk to a lawyer soon.
Seek financial guidance if necessary. There’s a million ways this piece of advice could go. Sometimes a divorcee finds that he or she is handling money for the first time in a long time…if ever. And the amount of money they have available is generally much, much less than they’d grown accustomed to.
When it comes to dividing all the stuff, you can either come to a mutual agreement or let a court do it for you. I’ve seen too many cases where this step (agreeing how to divide the stuff) was the biggest stumbling block, so it just keeps getting pushed back farther and farther…and the issue just keeps getting bigger and bigger.
Also, don’t let your income get cut in half while leaving your spending patterns unchanged. The trauma of divorce may be the reason you drown your sorrows in a credit card enabled spending spree, but it’s never an excuse. Run up a stupid-big credit card bill and you’ll still have to pay on it for a long, long time…no matter how good your rationale was at the time.
Social Security. If you were married for ten years or longer, you may be entitled to benefits based on your ex’s Social Security benefits. You could get an amount equal to half your ex’s monthly benefit, unless you already get a larger benefit from Social Security. You also must be unmarried and age 62 or older to claim. Don’t make any assumptions here – check in with your local Social Security office.
Pensions. If your husband earned a pension during the years of your marriage, that is generally considered his and hers (aka, community property). The divorce court will usually direct how pensions and other retirement benefits are to be split by issuing something known as a qualified domestic relations order (QDRO).
Beneficiary designations. You may have court documents declaring you divorced. You may have a freshly drafted will expunging all memory of your ex from your legal and financial life. You may even have video-taped evidence of your ex cavorting with that hussy down at the bowling alley. But if you forget to change the beneficiary designations on your company retirement plan and your life insurance policies, Mr. No-Longer-So-Wonderful might just get a windfall at your death. Take care of this easily forgotten detail.
Divorce is usually messy and rarely easy.
Take steps now to reduce the messy part.
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Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Email him at firstname.lastname@example.org. Write to him at 500 East Reynolds Drive, Ruston, LA 71270 or call him at (318) 251-5858. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. No forecasts can be guaranteed. Argent Advisors, Inc. does not offer tax, insurance or legal advice. The information contained in this column should not be construed as a substitute for personalized investment, tax, insurance or legal advice.