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Should You Have A Legal Separation Agreement?

22 March 2016 by Kenneth Pierce

Divorce can be a major life changer, but it doesn't have to be a sudden event. With a legal separation agreement in place, you and your spouse can have the opportunity to work out potentially contentious issues ahead of time and outside of divorce court. The legal separation agreement, particularly when it comes to financial issues, can help smooth the way gradually toward the more final step of a divorce petition. Read on to learn about 3 issues that should be addressed in a legal separation agreement, and how addressing those issues ahead of time can benefit you.

1. Limit your debt liability.

The division of debt contained in the marital estate can be a major bone of contention in a divorce petition. Regardless of whether you reside in a community property or equitable distribution state, you likely do not want to be responsible for debt that your soon-to-be-ex acquires while you are separated, but not divorced. The formation of a legal separation agreement that directs who is responsible for what debts during your separation period is vital to protecting your debt liability.

2. Protect your health care coverage.

For those currently being covered by their spouse's employment-related health insurance, you likely have some well-founded concerns about keeping yourself insured, both during your separation and once the divorce is final. A legal separation agreement can stipulate that your spouse continue to provide coverage for you if needed during your separation period, giving you time to make your own arrangements through either your own job or through the Healthcare Marketplace. You may purchase plans at any time during the year if you have what is known as a "life change" on the Healthcare Marketplace.

3. Enhance your retirement benefits choices.

A valuable perk is available for those who have been wed for at least 10 years: the ability to draw one-half of your ex-spouse's Social Security benefit when you both reach full retirement age. This benefit applies even if you are divorced and even if your spouse remarries. It should be noted that this benefit is not available if you remarry, however. If your own earnings are higher than the one-half portion of your ex's, the Social Security Administration will automatically provide you with the higher of the two benefits. Your ex need never know about your withdrawals, you don't need to know their Social Security number, and their benefit amount is not affected. If you are close to the 10-year mark, a legal separation agreement could serve as a means to extend your marriage for months or even years so that you can take part in this valuable benefit, since a good, comprehensive agreement can function nearly as well as an actual divorce agreement.

For more information about creating a fair and complete legal separation agreement, contact your divorce lawyer.

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