With a legal separation, the marriage contract is not officially dissolved, but the spouses usually live separately and have their own individual interests and lives. While separation is often a pitstop on the road to an official divorce, there are some financial aspects to consider when deciding between legal separation and divorce. Below, a few of these are discussed in more detail.
What to Know About the Financial Aspects of Legal Separation vs. Divorce
1. Any Separation Should Be a Legal Separation
If you're thinking about an informal separation where no legalities are brought into the picture, you may want to rethink your plan. Any separation, even a trial one, for a reasonable amount of time should involve the law. You and your spouse both deserve to know your obligations in regard to child custody and support, alimony, and how assets are to be distributed. Even if the separation is only for the short-term, working these issues out now will protect your family and your future.
2. Understand the Financial Ramifications of Divorce
Should you and your spouse divorce, there are certain jointly held benefits that could come to an end. If, for example, you have health insurance through them, your coverage will end after the divorce. If you benefit from the deduction married couples can take on their tax returns, you will lose that option once the divorce is finalized. In other words, consider all the ways your finances will be impacted by a divorce; in some situations, it may be more beneficial to opt for legal separation instead.
3. Learn About Your State's Laws Regarding Legal Separation
Some states have a specific process called legal separation. Other states don't recognize it at all. Educate yourself on what options are available in your state. In North Carolina, there is no process called legal separation, yet, perhaps paradoxically, one usually cannot get divorced without being separated first for at least one year. During that year, take care of yourself financially, even if that means drawing up situation-specific contracts between yourself and your spouse. A family law attorney will shed more light on this subject and help you design legal documents that can safeguard you and your partner.
Your finances will likely be directly affected by changes to your marital status. If you live in the Albemarle, North Carolina, area and need guidance on divorce or legal separation matters, let attorney Stacy D. Fulcher of Fulcher Law Firm find solutions that work. Call (704) 984-6060, or visit the firm's website to make an appointment.