Divorce is never easy, especially when your financial well-being depends on long term disability (LTD) benefits. For many of our clients, disability benefits are a lifeline. If you’re facing the possibility of divorce or already going through one, it’s important to understand how it might impact your disability income.
Let’s break down how divorce may (or may not) affect your LTD benefits and what you should be aware of as you navigate this life transition.
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1. Long Term Disability Benefits Are Typically Considered Separate Property
In most cases, LTD benefits are considered separate property, not marital property. This means they belong to the person who is disabled and not subject to division in a divorce. The reason? These benefits are paid due to personal injury or illness and are intended to replace lost income for the disabled individual.
However, things can get complicated depending on how the benefits are used. If LTD payments are mixed with joint marital assets or used to pay for shared expenses like a mortgage or joint savings, a judge could view a portion of those funds as marital property. That’s why it’s crucial to keep clear records of how your benefits are used.
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2. Spousal Support Could Be Affected
While LTD benefits themselves are usually not divided in a divorce, they can still play a role when determining spousal support (also known as alimony). If you’re receiving LTD and your spouse is not working, the court may consider your disability income when calculating how much support you should pay or receive.
If you are the disabled spouse, the court will weigh your reduced earning capacity and medical condition when deciding spousal support obligations. It’s important to work with a knowledgeable attorney who understands both family law and disability income regulations.
3. Child Support and Dependent Benefits
If you have children and are paying or receiving child support, your LTD benefits may be factored into that calculation. Additionally, if your long term disability policy includes dependent benefits, those could come into play in support discussions.
4. Private vs. Government Disability Payments
It’s important to note that this article focuses on private long term disability insurance. Social Security Disability Insurance (SSDI) or Veterans Disability Compensation might have different rules when it comes to divorce. For example, in some cases, an ex-spouse may be entitled to benefits through Social Security based on your work record if the marriage lasted at least 10 years.
5. Planning for the Future: Protecting Your Benefits
If you’re concerned about protecting your LTD benefits before or during a divorce, consider the following:
- Work with an attorney who understands both disability and family law.
- Keep records of how your disability income is used.
- Avoid co-mingling LTD benefits with joint assets whenever possible.
- If you’re also considering estate planning, look into trusts and other legal tools to protect your income and assets.
At Marc Whitehead & Associates, we’ve helped thousands of clients win their disability benefits. As our practice grows to include elder law, estate planning, and Medicaid eligibility services, we want you to know we’re here for the next chapter too. If you’re facing divorce, planning for long-term care, or just have questions about how to protect your rights—don’t hesitate to reach out.
Contact us today to learn more about how we can help protect what you’ve worked so hard to win.
Call us at 800-562-9830
Or contact us online: DisabilityDenials.com
