What Are the Financial Distinctions Between Separation and Divorce?
Some couples opt for separation instead of divorce for a variety of reasons. Along with religious principles and the hope of reconciliation, many couples stay married due to money-related concerns, such as the ability to access a spouse’s insurance coverage and Social Security benefits. If you’re considering legal separation as opposed to divorce, it’s important to understand how each option might affect your financial situation.
As you evaluate whether to dissolve your marriage completely or request a legal separation, some of the financial issues you might to consider include:
- Insurance coverage — Unless you are divorced, you can continue to receive coverage that is provided under your spouse’s policy. However, if you are thinking about possibly getting a divorce at some point, you might want to start looking into options for individual coverage.
- Benefits — Social Security and veterans’ benefits that you might receive as the spouse, widow or widower of someone else are still paid regardless of the legal separation.
- Inheritance — Separated spouses are still spouses and entitled to inherit property from an estranged husband or wife under New York’s intestacy laws. This is not true once a divorce is finalized. Depending on your wishes, you might act to revise your estate plans.
- Division of assets — Once a separation is granted, assets acquired individually by a spouse do not become part of the marital estate. You and your spouse should open new personal accounts immediately to avoid potential problems. Some couples maintain previously existing joint bank accounts, but if you do decide to divorce later on, there could be conflicts over post-separation transactions.
- Child and spousal support — A New York Judgment of Separation, like a divorce agreement, can contain language requiring a party to pay child support or alimony based on the particular circumstances.
Along with the financial consequences, there are other elements of a New York legal separation that require your attention. If you share minor children with your spouse, you need to develop a parenting plan and child support arrangements. A smart first step is speaking with an experienced family lawyer who can explain how your separation might proceed.
Bryan L. Salamone & Associates, P.C. represents Long Island residents in legal separations, divorces and other family matters. To make an appointment for a free initial consultation, please call 1.631.479.3839 or contact us online.