Maryland couples considering divorce have options available to them as they pursue the dissolution of their marriage. One of the options is a legal separation which can specify details of arrangements such as child custody, property division, and more in the event that the couple moves into divorce. The second option is moving straight into the divorce process. Both of these options can have a significant impact on a couple's financial situation, but many couples may not understand the difference.
The financial implications of a legal separation are not as divided as in divorce. While it is true that both parties are considered individual entities during a legal separation, health insurance and other benefits, as well as finances, may still be shared. Careful attention must be paid to the terms set in a separation agreement because this document may be used as evidence when the case moves to divorce. Additionally, until the marriage is legally dissolved through divorce, one spouse can sell assets and make financial decisions that will affect both parties.
In divorce, the financial guidelines are much clearer. Each party will understand and agree to the terms set forth, at which time the financial link will be severed. All aspects of finances are affected during divorce including tax filing, decision-making, Social Security, and more. While these financial considerations may make the divorce process a bit more complicated, it is much better for splitting couples to be financially independent to avoid one spouse from ruining the financial stability of the other or both.
Determining whether to begin with legal separation or move straight into divorce will most likely depend on the individual situation of the couple. While it may be a challenge to move from marriage to legal separation or divorce, Maryland couples have certain rights and responsibilities that will protect their interests. Having documents drawn to legally protect both parties is one of the best ways that individual financial security can be ensured during and after divorce.
Source: Fox Business, "Separation or divorce? What each means for your finances," July 25, 2012