Collaborative Practice Marin
I Don't Know How Much We Spend per Month!

When one is first contemplating leaving a marriage or when one is first told their marriage is ending, panic can set in.  Oh my gosh, will I be able to stay in my home?  Where will I go?  What kind of place can I afford?  Will I have to get a roommate?  All of these thoughts can come flooding through our consciousness.

Don't panic.  It really does not matter if you are the one who has handled the finances or the one who knows very little to nothing about your family's finances.  Begin to gather invoices to help you understand how much you spend on a monthly basis.  You will want to locate the invoices for expenses such as utilities, cell phone, mortgage or rent (which may be in a different home), groceries, gasoline, parking, day care, dues, clothes, pets, prescriptions, health insurance, credit card bills, auto and student loans, haircuts, and any other kind of expense that you pay each month.  This would include contributions to a retirement account.  You may not have all the invoices or receipts.  In that case begin to keep track of all the expenses you incur on a daily basis for a couple of months to see what you are spending and in what category.

Then think about other bills that come in once, twice, or maybe three times per year such as property taxes, property insurance, umbrella insurance, auto insurance, vet bills, auto repairs, house maintenance, and tuition.  Figure out what an average monthly amount would be and add this to your known monthly amounts for regular monthly bills.  This should give you a reasonable idea of your total average monthly expenses before income taxes are considered.  This exercise is very grounding.

Income taxes are likely be different in the year you are divorced.  If you have questions about what taxes may be or if you want further guidance in this process, seek the advice of a divorce financial professional.

This exercise of gaining a complete understanding of your family's spending patterns will help you feel in control of your life and help you be confident about your decisions when it is time to make financial agreements with your spouse. 

Judith F. Sterling is a CPA, Certified Divorce Financial Analyst, and Collaborative Financial Specialist practicing in Sonoma and Marin Counties.  

photo credit: Ann Buscho, Ph.D.

What Happens to Social Security Benefits When You Divorce?

Questions abound about Social Security benefits when there is a divorce.  Social Security benefits are Federal benefits and are not subject to division in state courts.  That being said, under current Federal law unmarried lower earning spouses who had been married for 10 or more years before divorcing and are at least 62 years of age are entitled to ½ of the higher earning spouse's benefits under what is known as a derivative benefit or 100% of their own benefits - whichever is higher even if the higher earning spouse has remarried.  In order to receive the full ½ derivative benefit, the lower earning spouse must be at his or her full retirement age and the higher earning spouse must be of minimum retirement age or age 62.  If the higher earning spouse begins collecting Social Security benefits before full retirement age, the amount of the lower earning spouse's derivative benefit will be reduced by a percentage based on the number of months before the higher earning spouse reaches full retirement age.  One earns a maximum of four credits per year.  In 2013, one could earn one credit for every quarter one earned at least $1,160.

These derivative benefits for lower earning spouses have no affect on the benefits of higher earning spouses, their current spouses, or other family members.

If you are the lower earning spouse and are curious about whether your ex-spouse's benefits are more than 50% higher than your benefits, contact the Social Security Administration who will provide you with the benefit amounts to which you may be entitled after first verifying your relationship to your ex-spouse.  Privacy laws prohibit the Social Security Administration from providing the ex-spouse's actual Social Security Statement.

Should the higher earning spouse pass before the lower earning spouse and be fully insured (meaning having 40 credits), the lower earning spouse may be eligible to receive 100% of the higher earning spouse's benefits.  These benefits are called survivor benefits.  The survivor spouse must be at least age 60 or at least age 50, if disabled.  The survivor spouse must have been married to the ex-spouse for at least 10 years and be unmarried unless married after age 60 or after age 50 and at the time of remarriage were entitled to Social Security disability benefits. 

If at the time of divorce one legally changes his or her name, it will be important to notify the Social Security Administration.  For most people this would mean obtaining a certified copy of the divorce decree showing request for name change from the county Superior Court; providing either an original US issued driver's license, state ID card, or US passport; completing an application for a Social Security card; and delivering all items to the local Social Security office or Social Security Card Center.  The Social Security Administration notes that if mailing, original documents and certified copies will be returned with receipt.

For more information on Social Security benefits visit http://www.ssa.gov.  Or contact the Social Security Administration directly for answers to your specific situation.

Judith F. Sterling is a CPA, Certified Divorce Financial Analyst, and Collaborative Financial Specialist practicing in Sonoma and Marin Counties.  

photo credit: Ann Buscho, Ph.D.


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About Collaborative Practice Marin

CPM is a community of legal, mental health and financial professionals working together to create client-centered processes for resolving conflict.  We are located in Marin County, California. 

Why Collaborative Divorce?

“Divorce is never easy but the collaborative process made mine bearable.  I had more control and therefore less stress and anxiety because I had an active role.”

~JF

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