• 22
  • January
    2012

Some married couples who no longer choose to live together are finding a legal separation works better for them than an actual divorce -- and it may be easier on the wallet.

Many couples considering divorce begin with a trial separation before they actually file the paperwork. Maryland couples planning to live apart should consider a separation agreement for protection. Without a written separation agreement, spouses are still responsible for the other person's debts and legal issues.

A separation agreement also assures both partners that the property is divided in a fair and rational manner because it spells out the worth of marital assets or businesses. The agreement also specifies how the property is to be divided.

Separating instead of filing for divorce may make more financial sense if the couple needs a little more time to meet the Social Security requirement of 10 years of marriage. After 10 years of marriage, a divorced spouse who is still single at retirement age can collect social security benefits based on his or her ex's work history.

At retirement age, you can collect the Social Security benefits you are qualified for based on your work history. Or, if it is more, you can collect 50 percent of the amount your former spouse is entitled to based on his or her work history.

Separation may also make more sense if one spouse gets her or his health insurance benefits through their partner's health plan. Generally most employers will not cover health costs for a former spouse, but may cover them if the couple is only separated.

Some couples also choose to separate instead of filing for divorce to take advantage of tax benefits from filing a joint tax return. However, federal tax law can be quite complicated when it comes determining marital status. Check with your attorney or a tax advisor to determine where your situation falls.

Source: Forbes, "Legal Separation or Divorce: Which is Better Financially?" Jeff Landers, Jan. 10, 2012