Financial Reasons for Choosing Legal Separation Over Divorce

March 01, 2012

Financial Reasons for Choosing Legal Separation Over Divorce

Sometimes when people are struggling in their marriages, they choose a legal separation rather than divorce. People may separate for a variety of reasons, such as being unsure about whether they actually want to divorce or simply feeling they need some time away from their spouses to work out problems. Financial considerations often play a key role in people's choice of legal separation rather than divorce.

Legal Separation in Indiana

Indiana law allows married couples to legally separate for up to one year after a legal separation order is entered. A separation does not end the marriage, but a court may issue a separation order concerning things such as payment of debts, support of children and property division. After the one-year term, the parties must decide whether to reconcile, pursue divorce, or sometimes, may choose to obtain another one-year legal separation. If the parties decide to divorce before the year is over, the separation ends and the divorce case begins.

Health Insurance

Health insurance is a major concern for many people, and they may want to remain on a spouse's health insurance plan even though they do not want to stay with the spouse. Some may not be able to afford health insurance on their own, or they may have pre-existing conditions that would prevent them from obtaining insurance easily.

Depending on the health insurance plan, a legal separation may not terminate a spouse's coverage in the same manner that divorce does.

Tax Implications

Remaining married may offer tax benefits. Some save more money filing joint tax returns than they would filing singly. The IRS follows state law in determining people's marital status and it is important consult with tax professionals to determine whether they would still be eligible to file jointly during a legal separation.

Retirement Benefits

Legal separation may preserve eligibility for certain retirement benefits. In many cases, divorced people are eligible to collect Social Security benefits on their spouses' earning record as long as the marriage lasted 10 years or more and they do not remarry. Some choose to legally separate before divorce in an effort to preserve this option, although it is important to investigate each individual's specific circumstances to ensure that this option is available.

Military Benefits

Typically, military pension benefits also have a 10 year marriage requirement for former spouses to be able to collect, and a 20 year marriage requirement to maintain PX and Commissary shopping privileges after divorce. Legal separation can be a way to help ensure that people do not lose access to these benefits, although again, it is important to investigate each individual's specific circumstances to ensure that these options are available.

Consult an Attorney

The decision to divorce or separate is never an easy one. People need to consider all of the ramifications when making their decision and the assistance of an experienced attorney often helps people understand all of their options.

Article provided by The Law Office of Julie R. Glade, RN, JD
Visit us at http://www.julieglade.com/