Posted on: 2 December 2015Share
If you and your partner have made the life-altering decision to divorce, you likely are already well aware that the emotional, physical and financial impact on your life could be long-lasting and severe. You can help smooth the way for these changes by taking an interim step in the divorce process; a legal separation. With a legal separation document in place, you and your spouse can address vital issues ahead of the divorce decree, especially financial issues. Read on to learn more about the 4 financial positives of a legal separation agreement.
1. Protect your debt liability
The division of debt will be addressed in the divorce agreement, but by then it could be too late. You could be held responsible for some of your spouse's debts between the time you separate and the final decree, which in some cases encompasses months. For example, do you really want to help pay your spouse's credit card charges that occur while you are separated? A legal separation agreement will designate who is responsible for what debt and when.
2. Keep healthcare coverage
Healthcare insurance is a necessity, not only for you but for your children. Make certain that, if necessary, you and your children retain healthcare coverage through your spouse during the separation. Having this provision specifically addressed in a legal separation agreement will give you time to make future insurance arrangements for yourself and your children. Note that in some states, being legally separated will prevent you from receiving coverage under your spouse's insurance plan.
3. Ensure Social Security benefits
If your timing is right, you could be ensuring that you are able to have a choice in Social Security retirement benefits when you become eligible. Even if you are divorced, you are eligible to receive benefits based on your ex-spouse's work history if you have been married for at least 10 years and you have not re-married. Depending upon your own earnings, taking part of your ex-partner's monthly benefit amount could be more than your own.
Keep in mind that this will not decrease or affect your ex-spouse's benefit in any way and that you will still qualify even if your ex-spouse remarries. If you are close to the 10-year mark, it could pay off to put a legal separation agreement in place and delay the actual divorce in order to qualify for this perk.
For those who use the tax status "married filing jointly", the tax benefits could be quite substantial. With a legal separation agreement in place you can receive some of the benefits of being separated (such as living apart from a spouse) while still retaining the right to file taxes jointly. Since the definition of a legal marriage and separation can vary from state to state, check with a tax attorney in your locale for more specific information.
Contact a divorce attorney at Karp Law Offices for more assistance in crafting a fair and comprehensive legal separation agreement that will address your financial issues and more.