Is a Legal Separation an Option for Us?
A client’s recent question to me about a Legal Separation got me to thinking: are there times when a Legal Separation would be preferable to a Divorce?
First, let’s talk about what is – and what is not – a Legal Separation. It is not simply living separately. You can be “living separated” with your own residences and bank accounts but that isn’t “legally-separated.” When you simply live separately from your spouse, your legal rights with regard to growing joint assets and your legal responsibilities for joint debt and spousal support remain. At the end of the legal process, often the only difference is that at the end of a Divorce you are free to marry someone else but this is not so at the end of a Legal Separation, where you have to engage in a new legal action to convert the Legal Separation into a Divorce.
People request Legal Separation for a variety of reasons. Sometimes, they just want to avoid the anticipated cost and trauma of a Divorce, or they have reasons based upon religious beliefs. Others think by legally separating they can ensure ongoing affordable health care for their spouse. Many people are not interested in seeking out another relationship but don’t wish to continue in the one they are in. A Legal Separation goes through the same process of discovery and final orders that a Divorce does – this is not “Divorce Light.” This is a full court process with final court orders that remain in place until one of you decides to convert the Legal Separation into a Divorce.
So you might ask, if it’s the same process why choose a Legal Separation over a Divorce action? There might be several reasons and they have more to do with your personal and legal situation. Here are just a few considerations:
• Immigration rights – If either you or your spouse is a lawful permanent resident with a 10-year green card, your renewal process shouldn’t experience any problems with either a Divorce or a Legal Separation. However if one of you has a conditional green card, a Divorce might challenge the underlying basis of a renewal application. If you are legally separated, however, it is determined on a state to state basis so if your state requires a legal separation as a precondition to a divorce, your green card is vulnerable but if, as in Connecticut, it is not a precondition but is a final result in and of itself, then you should be successful. Important note: immigration rights are in a state of flux as of this writing and if you are considering divorce or legal separation, consult with an immigration attorney as well as a family practitioner to ensure your rights are protected.
• Religious reasons – You want to be sure that your religious beliefs are honored and there are several religious practices common in Connecticut where Divorce is frowned upon by the community but a Legal Separation is considered to be more acceptable. Be sure to discuss those relevant religious beliefs with your family attorney. Divorce and Legal Separation are hard enough without challenging fundamental religious belief systems that sustain you and you want to be sure you select a family practitioner who is sensitive to that.
• Health Insurance coverage – Although occurring with less frequency, some health insurance programs still allow legally-separated spouses to remain on the family plan, which is financially subsidized by the employer and thus, provides a savings to the family. (This is not to be confused with your rights under COBRA, where you can buy into your former spouse’s health insurance plan but at a higher, non-subsidized rate.) Make sure your family attorney has a copy of the current plan language so that you can be assured that coverage can continue at the subsidized rate if allowed under that plan.
• Maintaining Survivorship in jointly-held Real Estate – Most spouses take title to their homes in survivorship which means that if one dies, full title to the property goes to the surviving spouse. In many states, including Connecticut, survivorship is severed at the time of Divorce and the former spouses become tenants in common, which means that if the one dies the interest in real estate passes to that spouse’s heirs and not to the former spouse. Survivorship can be and often is reaffirmed at the time of the Divorce – you would do that, for example, if the house was to be marketed and sold after the divorce. Interestingly, Connecticut’s statute (Section 47-14g) is silent as to the effect of a legal separation on survivorship interests so the argument could be made that there is no impact. Best practice, I think, is to reaffirm survivorship at the time of a Legal Separation.
• Federal Taxes – I’m going to start right here by saying you need to consult an accountant on this, with all the recent changes to the tax law. When alimony was deductible to the payor (and yes, there can be alimony awarded under a Legal Separation), it was clear that you could not file a joint tax return and still claim that deduction. Now that the deduction is gone, it is considerably less clear and you and your spouse may want to consider a Joint filing status under advisement of your accountant. If under current law a legally-separated couple is considered still “married” pursuant to the tax code, then filing jointly is usually a better status than married/filing separately. If you are considering a Legal Separation to enhance your tax status, then consult with an accountant to determine the feasibility and appropriate parameters. Your accountant can provide correct language for your attorney to place in your final agreement.
• Inheritance rights – Most of us have wills, but if we do not our estates are governed under the laws of intestacy. Each state dictates how property in intestacy is transferred, and it usually passes first to the spouse (and if no spouse, to the children and if no children…etc.) This is a complex area of the law and if you wish to have your legally-separated spouse inherit, the best practice is to have a Will confirming the right to inherit and as well, to have affirming language in your Separation Agreement that it is your intent that your legally-separated spouse receive all rights as if she/he were not legally-separated. If you wish that your legally-separated spouse NOT inherit from your estate, then you will need to consult with an estate attorney to determine if a spousal share (also known as the widow’s/widower’s portion) is due your legally-separated spouse. While the statutes may be silent on this issue and case law may be conflicting, your family attorney will ensure that your wishes are appropriately set out in you Separation Agreement.
• Pension rights – You may be able to name your legally-separated spouse as your beneficiary to your pension but all plans differ. Make sure that your family attorney has a full copy of your defined benefit (pension) plan document so that you understand what rights a legally-separated spouse has under that plan as well as to confirm that removing your legally-separated spouse as beneficiary doesn’t trigger any spousal guaranteeing language.
• Title 19 planning – A good estate attorney can help you plan to protect a share of your assets if your spouse is deteriorating physically and cognitively and not infrequently, a Legal Separation can help you to set aside your fair share of the assets and income so that when your spouse has exhausted their financial resources, they can move to state-funding and you will be left with your own resources to support yourself.
This can all be mighty confusing. Many people think a Legal Separation is simpler and more affordable than a Divorce but you can see from the above that there are many considerations based upon your goals with regard to becoming legally separated. Make sure you select a practitioner who is comfortable discussing these options with you and as well, is comfortable working with other practitioners (an accountant, an estate lawyer or immigration counsel) to ensure that your goals can be met. If you and your spouse choose a Legal Separation, you can mediate it or you can use collaboratively-trained legal counsel to negotiate the finer details.