If you’re considering splitting from your spouse, you may think divorce is your only option. However, many times, couples are not entirely ready to call it quits but need time apart to sort out their issues. This is when couples may benefit from a separation agreement.
What is a separation agreement in marriage?
A separation agreement is a document that both spouses voluntarily sign that allows them to work out their problems and possibly avoid divorce. They can live apart while trying to see if they want to divorce or reconcile.
Is a separation agreement the same as divorce?
No, they are two different scenarios. With a separation agreement, two people are still legally married, although they are living apart. You will have to decide on some of the same issues that are present with divorces, such as child visitation and child support, but you are still married. It can give both parties security while figuring things out.
When you are legally separated, you cannot remarry, and you are still entitled to certain benefits, like Social Security, that provide benefits to surviving spouses. You are also still eligible for your spouse’s health benefits. If a couple decides to put a separation agreement in place and then decides to divorce, they will then have to go through divorce proceedings.
How does a legal separation work?
A legal separation puts boundaries between a couple to protect both parties. You not only live separately, but your finances are also separated. Legal separation works much the same as divorce when it comes to dividing assets and issues involving children. All marital debts and assets are split. Child support, child visitation, and alimony are usually included as well. A separation agreement becomes invalid if you and your spouse decide to live together again with the intent to reconcile.
Why Should You Consider a Separation Agreement?
While you and your spouse may verbally agree on specific issues if you decide to separate, it’s essential to have something in writing; this protects both you and your spouse (though you might not feel the latter is important). Here are four reasons to consider a separation agreement:
1. You have children
One of the most essential parts of a separation agreement is protecting your relationship with your children. Including a visitation schedule in your separation lays the groundwork for a custody agreement should you continue with a divorce. Without a separation agreement, you run the risk of your spouse suing you for custody. That’s a risk you don’t want to take!
2. You own real estate
For many couples, the home they share is their most valuable asset. A separation agreement can decide how the equity in the house is split and what happens to the mortgage and title, among other things.
3. You have retirement accounts
When there are retirement accounts involved, it’s best to have a separation agreement that guides how your retirement accounts will be valued and split fairly. In high net worth separations, having a CPA or finance professional value your accounts, including 401ks, pensions, and stocks, is critical.
4. You want to protect yourself from future liability
A separation agreement can help to protect you from future liabilities, such as any future debt that your spouse takes on. If your spouse owns a business, it is vital that you have a separation agreement to protect yourself. Protecting yourself from the unknown during a time of marital uncertainty is critical to your future.
A separation agreement is an excellent way to protect yourself and your assets if you’re considering splitting from your spouse. You run the risk of losing financially and personally if you don’t enter into a separation agreement as you decide the fate of your marriage.