Divorce certainly qualifies as a life-changing event. The impact on everyone concerned will likely be severe and lasting. Many couples take an interim step in the divorce process called a legal separation. There are several benefits to having a legal separation agreement, and some of the major benefits concern your finances. Read on for five ways that a legal separation could benefit your financial situation in divorce proceedings.
- You can protect your liability for your spouse's debts with a legal agreement. Not only will the agreement address vital issues such as with whom your child should reside and how much child support and alimony is to be paid, but it will also take into account who will be responsible for the marital debts. You may be responsible for your spouse's credit card debt without such an agreement.
- Healthcare is a major expense, and you will need to ensure that you and your children have coverage. If your spouse's plan allows you to stay on it while you are legally separated, try to do so until the divorce is final.
- Your Social Security retirement benefits could be greatly impacted by having a separation agreement now and divorcing at a later date. You must have been married for at least 10 years to qualify to receive benefits based on your spouse's work history when you reach retirement age of at least 62. If you have not quite reached that 10-year mark, it could be worth it to stay married for a while longer. You will qualify for this benefit irregardless of whether or not your ex-spouse remarries; however, if you remarry you will usually no longer qualify.
- The tax benefits of the status married filing jointly could be substantial. You should check with a tax attorney for verification of the tax status of a legally separated couple, since state definitions do vary.
- As a veteran or part of a military family, you are entitled to certain valuable benefits that you will lose if you divorce, but that you can still continue to take advantage of while legally separated, such as healthcare, PX/BX and commissary shopping privileges, childcare, recreation, educational, life insurance, and many more.
In addition to the above financial considerations, having a legal separation will allow your family to gradually adjust to the upcoming divorce and also give you and your spouse an opportunity to begin crafting a divorce agreement that is fair and well thought out. Your divorce attorney will work with you to design a legal separation agreement that will ensure not only your financial stability during this time, but that will address all issues surrounding your divorce process. Consider speaking with a divorce attorney from Goldberg Katzman PC for more information.