Six Marital Assets You Cannot Afford to Overlook

Divorce may cause you to view your life and possessions through a fresh pair of eyes. Dividing marital assets becomes necessary in most divorce cases. This may cause you to feel depressed when faced with the possibility of selling the family home, dividing financial assets, or even parting with your prized espresso machine. While your feelings are valid, it is important to remember that emotions often cloud the mind, and acting on your emotions can have negative and long-term effects. Remaining focused enables you to review all of your marital and non-marital assets objectively. It is nearly impossible to compile a comprehensive list of assets in one sitting. For instance, have you considered calculating the value of your travel reward points, a small 401(k) plan from a previous employer, or even photographs or keepsakes? These items may seem to have little worth, but small assets add up. It is best that you are fully aware of all of your marital and non-marital property so you can retain the possessions you are entitled to at the conclusion of your divorce. Some of the most obvious assets like real estate, retirement plans, investments, and/or bank accounts are likely to get a lot of attention when discussing your separation. Not-so-obvious assets can be easily forgotten during divorce proceedings. Below is a list of six assets that are often overlooked.
  1. Retirement Plans from Previous Employment:

Many times pension plans and defined contribution plans from prior employment, such as 401(k) plans, or profit sharing plans, acquired during the marriage are overlooked in divorce proceedings. All retirement plans acquired during the marriage are subject to division by the court. A detailed employment history and benefits for you and your spouse should be provided to your attorney especially if the former employer offered a retirement plan to the employees.
  1. Memberships:

When you have a private club membership in an “equity” club, whether to a country club, golf club, or yacht/sailing club, you are entitled to part of the membership’s value. It does not matter whether or not you actively used the club membership during your marriage; it is a marital asset and should be considered. Given the exorbitant membership fees associated with private equity club memberships, this is something you don’t want to leave out of the list of marital assets.
  1. Collectors’ Items:

A collection of vintage stamps, baseball cards, rare coins, or other collectables acquired during the marriage are considered assets of the marriage and should be appraised. It is easy to forget collectors’ items especially if you did not take interest in your spouse’s hobby. Similarly, any collectors’ edition item your spouse acquired during the marriage is also part of common property. When reviewing your marital assets, take into consideration items such as comic books, first edition books and records, sports memorabilia, and related items that are valuable now or may have value in the future. There are appraisers who can value these special items for you during your divorce proceedings.
  1. Trademarks and Patents:

If your spouse has registered patents, trademarks, or received royalties, be sure to include them in your divorce settlement. Ideas and inventions are rarely successful overnight, so it is possible that this asset can be overlooked when creating your list of shared property. Additionally, there is a chance that the asset will become lucrative in the future. Be sure to include patents, trademarks, and royalties in your divorce settlement so that you can share in future benefits.
  1. Money Due From Others:

Remember, your spouse’s debtors are your debtors too. In the upheaval of divorce, you may have forgotten that your spouse loaned money to a third party or business. But when the loan is repaid, you ought to receive a portion of the monies repaid. Make sure you don’t miss out on the repayment.
  1. Non-Wage Employee Benefits:

Stock options, restricted stock units, defined benefits and other non-wage benefits provided to an employee from an employer are marital assets which should not be overlooked in a divorce proceeding. A thorough list of employee benefits should be provided to your attorney to be included in the property settlement agreement so that you receive a proportionate share of same when paid to your spouse. These six assets can easily be overlooked during the emotional upheaval of divorce.  Divorce is not easy. It is emotional, time consuming and, sometimes, a complex process. Nevertheless, it is imperative that you remain focused and level-headed when it comes to dividing your assets. Take care not to forget intangible assets and move forward in life without regrets. Contact Margaret Bennett at Bennett Law Firm, LLC, today about the not-so-obvious assets you should consider when pursuing a divorce.  

Divorce in Retirement and Social Security Benefits

The years leading up to retirement may be full of anticipation. You might look forward to long road trips and white sandy beaches while expecting retirement income and Social Security checks to cover day-to-day expenses. One reality that may catch you off guard, however, is divorce. Each year, many retired couples agree to separate and divorce. When this occurs, questions arise regarding the allocation of retirement benefits, especially Social Security spousal benefits. If you are entering the era of retirement and divorce seems like a possibility, take time to learn about the benefits that will be available to you and your soon-to-be ex-spouse. In an effort to clarify a complex topic, let’s review the ages at which partial and full retirement benefits begin and then expound on what this means for divorcees of different ages and dissimilar earning levels. (Much of the information presented in this article is adapted from ssa.gov.)

Social Security Retirement Benefits – By Age

A taxpayer can begin receiving partial Social Security benefits at age 62. However, full retirement benefits kick in at age 67 for most people. (Those born between years 1938 and 1959 may need to check a sliding scale to see exactly when they qualify for full benefits. It will be between the ages of 65 and 67.)

Also, at age 62 a person can begin collecting partial spousal benefits based upon the Social Security earnings of a taxpaying spouse or ex-spouse who is 62 years or older. The full amount of spousal benefits (which takes effect at full retirement age) is 50 percent of what the primary earner receives. This is the same whether you are married or divorced and eligible to receive benefits.

What Qualifies An Ex-spouse For Benefits?

An individual may apply for spousal benefits if the marriage lasted more than 10 years, if he or she is unmarried, and if his or her full retirement benefits are less than 50 percent of the ex-spouse’s benefits. While spousal benefits are not available to a spouse who remarries, if the later marriage ends in death or divorce, he or she may be able to file for retirement benefits based on the earnings of his or her first spouse. Taxpaying individuals who also qualify for spousal benefits will receive their personal retirement benefits first. Should an ex-spouse’s retirement benefits be of greater value, however, the individual may receive a combination of the benefits, which will equate to the higher benefit amount. Once full retirement age is reached, the individual will need to choose whether to collect personal retirement benefits or spousal benefits. In addition, if you have been divorced for at least two years, upon reaching age 62, as an eligible former spouse, you can claim spousal benefits based on benefits  accrued by a taxpaying ex-spouse who is also of retirement age, even if he or she has not filed for Social Security benefits yet. According to the Social Security Administration website, the amount of retirement benefits claimed by an ex-spouse has no impact on your Social Security benefits or those of your current spouse. (Find a complete list of the Social Security Administration’s spousal benefit qualifications at this government website: http://www.ssa.gov/retire2/yourdivspouse.htm.)

How Do Earning Levels Effect Spousal Benefits?

Information about spousal benefits can come as a relief to a divorced couple who has disparities in their earning levels. For instance, if one spouse was the primary earner while the other spouse did not work or did not accrue Social Security benefits, then each party can rest assured knowing they will both receive retirement benefits. When approaching life’s “golden years,” it is important to know that you will have the money you expected to fulfill the plans you’ve made for retirement. A later-in-life divorce does not need to disrupt these plans. Learn more about what you and your ex-spouse are entitled to by fully understanding your Social Security retirement benefits.
Image made available by 401(K) 2012 on Flickr through Creative Common Licenses