Certainly you’ve heard of the financial impact of divorce. But what about the other option: separation? How does the monetary situation work and how do you navigate it?
Here’s Five Fast Facts About Legal Separation and Your Money:
- ⚖️ Defined - Let’s get the important thing out of the way: separation is when couples stay married, but live apart, leading separate lives. It’s like a divorce, except you stay married.
- 🗺️ Legality - Not all states allow it and specifics vary by state. Where it is allowed, there will be a legal contract that lists the terms of the agreement including any alimony, property, debt, and child custody and support.
- 📕 Covered - Spouses can’t cancel, adjust, or stop insurance coverage on their spouse or children. They also can’t change beneficiaries. If that last one happens, it’s usually a Dateline episode in the making.
- 📕 Make It Rain - Legally separated couples can’t make big purchases or spend a ton of money unless there’s a written notice of the purpose and the amount. Uncle Randy can’t buy himself a Tesla unless Aunt Barb signs off.
- 🖊️ Judge’s Choice - The court can have a say in all of this. They can order the division of property and finances as well as child support and custody as they see fit. It’s smart for couples to try and be as fair as possible ahead of time to reduce the chances of this happening.
🔥Bottom line: Divorce is messy. Separation is more of a waiting period to see if both spouses want to go forward with a divorce or give things another try. If you’re not prepared, it can wind up costing you (or your spouse) some serious money.
Do you know anyone who has separated?
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