A legal separation is the alternative to getting a divorce, especially for people who can’t or don’t want to continue to live together during their marriage. While legal separations are for parties who plan to divorce, they’re also for parties who don’t want to end their marriage, but can’t continue to live together. After petitioning the court to legally recognize their separation, both parties will be able to live apart from one another.
Legal separations are recognized in many states. The day that a court officially grants a couple their legal separation is known as the Date of Separation. That particular date also marks when the beginning of their divorce process begins, particularly if one party plans to file for divorce as soon as possible.
Even before being granted a legal separation, both parties must be aware of the legal and financial ‘sacrifices’ they might need to make. That’s why it’s important for both parties to understand what’s at stake before they amicably choose to legally separate.
What the ‘Date of Separation’ does to finances
The Date of Separation marks a time where the finances and legal issues of both parties become vulnerable. Credit, mortgage payments and retirement funds mark some of the finances up at stake before a separation is legally recognized. Besides those, other financial matters are up at stake:
The Date of Separation may influence how both parties may file their Federal Tax Returns. Some states declare an individual spouse’s income (after the Date of Separation) their income alone, making it the responsibility of that spouse. Many resources suggest both parties should talk to an accountant about how to handle those finances.
Businesses and other investments
Businesses and other investments undoubtedly face asset division during the divorce process. Since most states take the value of a business and/or asset from the time of the Date of Divorce (rather than the date of separation), it could dramatically impact how much one party may take out of the asset division agreement. In some cases, if the value of any asset appreciates (rises) during the period of separation, both spouses will be granted an equal share of that particular asset during the time of divorce.
Spousal support (alimony)
The Date of Separation also influences how the courts determine alimony or spousal support payments. Depending on the state, courts determine alimony based on the Date of Marriage and separation, the length of the marriage and the working/financial status of both spouses. Most states, particularly for long term marriages, entitle lower-wage earning spouses to some form of spousal support.