Few events are more momentous than divorce. Divorce can have major financial consequences and could leave you potentially much worse off than before. Protecting your financial resources should be a high priority. Legal separation is the right course of action for some couples, and may help you to preserve your financial status. Here are five ways that a legal separation could make financial sense for you.
- Get it in writing. It's vital to have a formal written agreement that is filed with the court. Your attorney will prepare a statement that spells out details such as where any minor children will reside and how much support you and your children will receive. A detailed listing of all debts and who is responsible for them is important. Divorce may be a year or even more away, and you could be responsible for your spouses' debts up to that point, without such an agreement.
- You may be able to stay on your spouse's healthcare plan. Once you divorce, you will need to find your own coverage. Make sure to check the fine print on your spouse's plan to verify this information; some plans may not cover you once you are separated.
- Meet the Ten Year requirement for Social Security. If you have only been married for 7 or 8 years, you might want to delay divorce for a few years. You must have been married for at least 10 years to qualify to receive benefits from your spouse once you become 62 years old. Take note that you will qualify even if your spouse remarries, but not if you remarry.
- You may be able to benefit from the Married Filing Jointly status on your tax return. Caution: the rules concerning this vary from state to state, so meet with a tax attorney or accountant to verify IRS guidelines on the exact definition of "married" in your state.
- If you are a military family, you will continue to be eligible for benefits such as healthcare, commissary and px privileges, access to childcare and recreation facilities and numerous other perks.
The benefits of having a formal separation agreement goes beyond financial considerations, of course. Many couples find that time spent apart helps them think more clearly and prepares them for the upcoming final agreement. It may be a way for your children, and yourself, to gradually get used to the idea of divorce. Consulting with an attorney who practices Family Law will help ensure that your financial situation stays healthy throughout your separation and divorce.