If you and your spouse decide to legally separate, you won't live together anymore, but you won't be divorced, either. A legal separation agreement (called a temporary court order in some states) is essential if you're separating permanently as an alternative to divorce, assuming that your state recognizes legal separations (not all states do). To protect yourself, you need everything to be black and white and filed with the court so that if either of you fails to live up to the terms of your agreement, the other spouse can ask the court to help enforce it.
Other instances when a legal separation agreement is essential include when
- You're separating as a prelude to divorce.
- You're so estranged from your spouse that communication and cooperation are impossible.
- You don't trust your spouse to live up to his or her verbal promises.
- One of you wants spousal support while you're living apart.
- Minor children are involved.
The longer you live apart, the greater the chances are that your relationship will deteriorate. As time goes on, you may find cooperating with each other harder to do. For example, your spouse may become involved in a new romantic relationship and abandon your reconciliation plans. At times like these, having a written separation agreement can help prevent a total breakdown of your relationship, even if you anticipate an eventual divorce.
If you and your spouse can't come to a negotiated separation agreement, a family law judge will decide the terms of your separation.
What should be in a legal separation agreement?
A legal separation agreement should address most, if not all, of the same issues that you would cover in a divorce agreement, including how you will handle the custody of your children; how much child support one spouse will pay the other; whether one of the spouses will receive spousal support and, if so, the terms and conditions of the support; and how you will handle your marital assets and debts. If you and/or your children are currently covered on your spouse's insurance policy and that coverage will continue, your separation agreement should address the coverage, too. If you separate and then decide to divorce, all or some of what you include in your separation agreement can be converted into your divorce agreement.
Depending on your state, the personal property that's in your possession when you're separated may become the personal property you end up with in your divorce. Therefore, if you move out of the home you share with your spouse and you plan on leaving some of your personal property in that home, you may want to include a provision in your separation agreement stating that the property will be yours if you divorce.
Hang on to your liquid assets
Ideally, your agreement should give you ready access to the liquid assets (cash or another kind of asset that you can quickly convert to cash) that you and your spouse own. Certificates of deposit, cash advances on your credit cards, your checking account overdraft, a line of credit, as well as money market accounts and bond funds that allow you to write checks against your investment are all liquid assets. You may need these assets during your separation to help pay bills, to put food on the table, or to cover unexpected expenses, especially if your income is low and you won't be receiving much, if any, direct financial support from your spouse.
Try the art of compromise
When working out the terms of your separation, a give-and-take strategy usually works better than strong-arm tactics. In other words, don't expect to get everything you ask for. You can refuse to compromise in an effort to have everything your way, but that approach is likely to backfire because you may end up in court, where a judge decides the terms of your separation.
Be careful about what you sign
Question anything in a separation agreement that you don't understand. And don't agree to any provision in your agreement because "it's good enough for now" or because you "can live with the arrangement for a while." Separation agreements often become divorce agreements, and after something is in a separation agreement, having that provision voided or modified can be difficult, if not impossible, to change, unless you and your spouse agree to the change or the problems it caused were obvious and significant.
Give yourself some room to maneuver by clearly indicating in writing that the separation agreement in no way binds you to the same terms in your final divorce agreement. This statement should be a part of your agreement.
The financial benefits of having a legal separation agreement
Having a legal separation agreement can provide you with some specific financial benefits besides helping to ensure that if your spouse fails to live up to his/her obligation in the agreement, the court will take steps to make your spouse do what he/she agreed to. Here are some of the other benefits of a legal separation:
- If one spouse pays the other spousal support, the spouse making the payments can claim them as a deduction on his/her federal tax return. The payments must be part of a legal separation agreement or court order.
- If your spouse claims your spousal support payments on his or her tax return, then you have to report that money as income.
- A legal separation agreement can help limit your liability for any debts that your spouse may rack up during your separation, assuming you live in a separate property state. Spouses who live in community property states do not get this protection.
- The agreement can help ensure that certain financial benefits that you currently receive as a spouse continue during your separation. Those benefits could include health insurance and continued access to credit if you and your spouse share joint accounts or if you're an authorized user on your spouse's accounts.
Alimony pendente lite and separate maintenance are legal talk for spousal support payments during separation. You may hear your attorney use these terms or hear them in court if you look to a judge to decide some of the terms of your separation agreement.
Other things you should do when you're separating legally
Besides negotiating a legal separation agreement, if you're moving out of the residence you share with your spouse, and especially if your separation isn't amicable or if you don't fully trust your spouse, you should also protect yourself by
- Taking your name off your lease if you are renters.
- Taking your name off your family's utility, phone, cable, Internet, lawn maintenance, and newspaper delivery accounts and so on, assuming that doing so doesn't cause a hardship for your spouse or your children. If your spouse can maintain these things by himself or herself, taking your name off the accounts is fine, but if your doing so would mean that your spouse and children will lack heat, phone service, and so on, don't do it. Furthermore, under those circumstances, if you end up in court, a judge will not look kindly on what you did.
- Contacting all your joint creditors and putting a freeze on those accounts so that your spouse cannot run them up.
- Making copies of your family's tax returns for the past six years.
- Creating a record of all your joint credit account numbers, bank accounts, insurance policies, investment accounts, and so on. Also create a record of whatever you and your spouse have stored in bank safety-deposit boxes.
- Obtaining credit in your own name if all your credit is joint.
- Taking any personal property that's important to you and that you fear your spouse may destroy or discard out of anger.
