What is 'Legal Separation'

A legal separation occurs when a married couple decides to live apart as unmarried, rather than go through a divorce. Although a court order will still determine financial obligations, separation of assets, custody of children, etc., the marriage does not end.

A few reasons a couple might opt for separation are religious beliefs that frown upon divorce, the possibility of reconciliation down the road, tax ramifications, retaining health benefits, splitting up finances and sidestepping the costs of divorce attorneys.

BREAKING DOWN 'Legal Separation'

Legal separation is considered an alternative to divorce for those who may have religious or social objections to an actual divorce. This process can also be used in some cases as a basis for long-term reconciliation. However, the growing trend toward informal separation and no-fault divorces is making this more formal legal process increasingly obsolete.

For some, hitting that 10-year mark in their marriage impacts benefits down the road; and legal separation allows for that longevity. For example, military spouses must remain married for a decade to take advantage of benefits provided by the Uniformed Services Former Spouse Protection Act.

Also, remaining married for 10 years or more also means being able to take advantage of certain social security benefits for a spouse. If at retirement age your spouse will draw more social security than you, it is to your benefit to remain married for 10 years so you can draw a larger sum of social security by drawing on your spouse's social security retirement.

Once the actual date of separation is determined, it freezes a spouse’s ability to go on a buying spree with a joint credit card or withdraw money from bank accounts. Each spouse becomes legally responsible for his or her own debt after the date of separation.

It’s important not to treat a separation agreement frivolously because if you do decide to divorce, and now want to demand alimony or child support, a judge is likely to reject that request because the original agreement served both parties after separation and prior to filing for divorce.

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