Unpredicted Tax Implications of Social Security Benefits and Property Arrangements During Divorce
If you are facing a divorce in California, you are likely primarily concerned about alimony payments, property division, and, if you have children, child support, custody, and visitation. However, there are many additional financial implications that should be considered. For example, there may be unintended consequences or unknown advantages, depending on how you classify the property settlement and spousal support, or alimony.
Therefore, when it comes to divorce, it can be highly advantageous to work with California lawyers who also have an extensive background in accounting. The family lawyers at Bickford Blado & Botros have an accounting background and can take into account all of your financial details to help you anticipate how to optimize your situation for the future.
How Divorce Can Affect Social Security Benefits
Social Security benefits may make up a large amount of an individual’s retirement benefits or savings and can be affected in the event of a divorce. Therefore, it is important to understand certain aspects of your retirement that can be affected by divorce and how to take them into account for your financial future.
If you are a divorced individual and you meet certain requirements, then you may be entitled to have access to Social Security based on your ex-spouse’s earnings over the years. The criteria include having been married for over ten years, being 62 years of age or older, not having remarried, and having an ex-spouse who can claim Social Security benefits.
It is also important to consider the amount of benefits that you will receive and the timing from which you start getting the payments. For example, if you take Social Security benefits based on your ex-spouse’s earnings at full retirement age, then you will receive half of the benefit amount.
Another aspect to keep in mind is if you claim Social Security before you are at full retirement age, you can still get benefits, but the amount you receive will be reduced. An attorney who is familiar with this process is integral to making sure you can maximize your Social Security benefits.
California Property Arrangements and Tax Implications After Divorce
During a divorce in California, all marital property must be divided. A family lawyer with accounting experience can help advise you on how to divide these assets in a way that can optimize financial outcomes for both you and your ex-spouse. Additionally, other arrangements, such as joint ownership, can be considered.
If you are selling property, such as commercial or residential property, during a divorce to cash it in, then a family lawyer with an accounting background can help you make the most of the sale by minimizing tax liabilities.
Salary Arrangements and Alimony After Divorce
Based on the complexity of alimony or spousal support and taxes, all factors must be taken into account during a divorce to create an ideal situation for both parties. For example, if an individual decides to refuse alimony but takes personal payments instead for a certain amount of time, this can have tax implications that will take money out of both parties’ pockets.
Advantages of Working With Divorce and Family Lawyers Who Have Accounting Backgrounds
A divorce can have many financial consequences for both parties involved, both in the short and long term. That’s why it is crucial to work with a skilled family lawyer who has a background in accounting. They can have the foresight to anticipate considerations for issues that could affect your retirement and savings.
Whether you are divorced or getting divorced and are receiving your money through traditional employment, self-employment, or other income sources, a family lawyer with financial planning experience can help advise you on divorce agreement decisions, as well as decisions related to benefits such as Social Security.
FAQs
Q: Will Using My Ex-Spouse’s Earning Record for My Social Security Benefits Impact My Spouse?
A: If it makes financial sense for you to receive your Social Security benefits based on the earning record of your ex-spouse, then this will not penalize the benefits they will receive. This avoids potential conflict that could cost time and money and be escalated in court. It’s important to note, however, that you are only entitled to half of the amount that your ex-spouse receives.
Q: When Does Delayed Filing No Longer Become an Advantage as a Divorced Individual in California?
A: If you are a Californian who is divorced and planning to receive Social Security benefits based on your ex-spouse’s income, then the amount of benefits you will receive will increase upon waiting after reaching full retirement age. After reaching the age of 70, though, your benefit amount will no longer increase. It is essential to have a family lawyer who can advise you on how to optimize your retirement based on when you start making withdrawals.
Q: What Are Survivor Social Security Benefits?
A: If your spouse passed away, then you may be entitled to 100% of the benefit amount that they would have received. However, this will be influenced by your age and other conditions. A knowledgeable family lawyer can help advise you on Social Security benefits based on these components.
Q: How Can a Family Lawyer With Accounting Experience Help Me With Social Security Benefits?
A: Because Social Security benefits can represent such a large amount of retirement income, you are going to want to get financial advice from an attorney who is familiar with both the financial and legal implications. They can help you understand your potential for benefits based on factors such as your marital status and occupational history. They can also look at the tax implications related to your payments.
Protect Your Retirement With the Aid of Family Law Legal and Financial Professionals
If you have worked hard your entire life, like most of the individuals in the state of California, then it’s important to make sure you are getting all of the benefits you are entitled to. A family lawyer with experience in financial matters can take a look at your marital status and other factors to help determine what arrangements can help you optimize your income and your retirement. Get in touch with our dedicated team today.
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