Long Term Disability and Divorce: What You Need to Know

Divorce brings significant changes and challenges to every aspect of your life. When you or your soon-to-be ex-spouse also has a long-term disability, the situation becomes even more complex. Long-term disability (LTD) benefits can represent a substantial asset and source of income, raising questions about property division, alimony, and child support.

If you are going through a divorce and LTD is involved, you need to understand your rights and options. While laws vary by state, a seasoned long-term disability lawyer can provide the information you need. In the meantime, here are some key points to consider as you work through how long-term disability and divorce intersect.

LTD Benefits as Marital Property

In many states, assets acquired during the marriage are considered marital property subject to division in a divorce. This can include long-term disability insurance policies and benefits paid out during the marriage. If the disabled spouse has an employer-sponsored group policy, the portion of benefits earned while married may be on the table for distribution between spouses.

However, there are exceptions and complications to this rule. Some states treat LTD benefits as separate property belonging only to the disabled spouse, especially if the disability occurred before the marriage. In other cases, courts may distinguish between the part of the benefit representing income replacement versus supplemental retirement funds. A judge may also decide that certain LTD benefits are not subject to division in light of the disabled spouse’s need for ongoing care.

Impact on Alimony and Child Support

The benefits can still affect alimony and child support calculations even if the LTD policy is not divided as a marital asset. Generally, any income received by either spouse is a factor in determining support payments.

The critical question is whether the court considers LTD benefits as income for support purposes. Some states exclude means-tested disability payments like Supplemental Security Income (SSI) but include private LTD insurance benefits. Others may offset LTD income with the expenses of the disability itself. An experienced attorney can assess your situation and advise on how your state’s laws apply.

Protecting Your Benefits in a Divorce

If you are the spouse receiving LTD benefits, you may worry about having to share payments after a divorce. However, you can take steps to safeguard your interests during the process.

First, make sure you have a clear understanding of your policy terms and benefits. Gather documentation showing when you became insured, the premium amounts, and any payouts received. This information can help your lawyer argue for a fair division of assets and support payments.

Next, consider negotiating a property settlement that allows you to keep your LTD benefits in exchange for other assets. For example, you may agree to give your spouse a larger share of retirement accounts or home equity if you can retain the full amount of your disability income. A skilled mediator or collaborative divorce process can help you and your spouse reach a mutually acceptable agreement.

Finally, be proactive about securing your benefits with the insurance company. Update your beneficiary designations, contact information, and banking details to reflect your new marital status.

Advocating for Your Fair Share

On the other hand, you may be a non-disabled spouse concerned about losing access to your partner’s LTD income after a divorce. You want to ensure that you receive an equitable distribution of marital assets and appropriate levels of alimony and child support, given the circumstances.

To achieve this goal, work with a divorce lawyer who understands the intricacies of dividing disability benefits. Your attorney can investigate the details of your spouse’s policy, calculate the marital portion of benefits, and present arguments for including LTD income in support calculations. They will also help you evaluate proposed property settlements and their impact on your financial security.

Seeking Knowledgeable Legal Counsel

Divorce is never easy, and adding a long-term disability into the mix only heightens the emotional and financial stakes. Whether you are the disabled spouse or the partner of someone receiving benefits, you need a strong legal advocate on your side to protect your interests.

The compassionate, experienced LTD lawyers at Capitan Law are ready to guide you. We can analyze your LTD policy, help you understand your rights, and advise you about a fair resolution of property division and support issues. With our knowledge of state and federal laws governing disability benefits, we provide the skilled representation you need during this trying time.

If you have questions about how long-term disability benefits may affect your divorce, contact Capitan Law today. Call (267) 419-7888 to schedule a consultation or contact us online to learn more about how we can assist you.