Social Security Benefits vs. Retirement Benefits

If you are divorcing in Humboldt County and have a retirement plan, please remember that federal law bars a “set-off” from your spouse’s interest in Social Security benefits from your spouse’s community property interest in your retirement plan. Pension/retirement benefits are community property under California Law. However, Social Security is deemed separate property under federal law. Since federal law preempts state law, this may lead to “an inequity” between the spouses. Congress could have written a community property exception into its statutes that bars set-offs in Social Security. In addition, California also could have written in a provision to allow for the assignment of a portion of community assets to one spouse when the other spouse’s retirement plan (Social Security) is classified as separate property. However, neither Congress nor the California legislature has done so. If you are interested in reading more about this issue, please read the case of Marriage of Peterson (2016) 243 Cal. 4th 923.