Monday, September 24, 2007

Can a Divorce Court Divide Social Security Benefits?

Although not really a frequently asked question, this is still an occasionally asked question. A recent story in Lawyers USA mentioned a Utah Court of Appeals decision that was consistent with Texas law. The answer given in Utah, and in Texas, is "No".

The Social Security Act, which is a federal law, prevents states from considering Social Security benefits as a marital asset, or community property, as we would say in Texas. That means that courts cannot award all or part of one spouse's benefits to the other spouse.

Social Security benefits can be considered in ordering child support, especially in cases of disability. The court can't order Social Security to divide a payment or direct it to anyone other than the beneficiary under federal law. A court can take the benefits into account when considering amounts of income,cash flow and alimony.

Benefits can be considered in negotiating post-divorce support or allocation of resources. While we know that Social Security may or may not be paying as promised in the future, we can consider the possibility or probability of such payments when calculating cash flow to meet projected future needs. It is another possible resource to keep in mind in planning for the future.

Bottom Line: Although a court can't divide the benefits, it doesn't have to ignore them and they can be considered in deciding other issues.

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