Understanding the Financial Difference Between Legal Separation and Divorce

Are you unsure of the difference between legal separation and divorce? The two terms seem pretty similar, and both come with subsequent expenses. In addition, they’re the two most likely steps toward ending a marriage.

Increasingly, couples are deciding to live separate lives yet still be together. Both legal separation and divorce involve the legal system and come with similar breakup costs.

So is there a difference between legal separation and divorce, and how do they affect your wallet? We’ll explore both below as well as what to consider before you choose.

What Is Legal Separation?

Legal separation is a legal process that allows a couple to live separately while remaining legally married. In a legal separation, the court can make decisions on issues such as child custody, child support, spousal support, and property division.

The court’s decision is based on what is in the best interest of the parties involved. The legally separated are still married after the separation is finalized.

What Is Divorce?

Filing for divorce is the legal process of ending a marriage. In a divorce, the court can make decisions on issues such as child custody, child support, spousal support, and property division.

Unlike legal separation, the couple will no longer be legally married after the divorce is finalized. If you want to know more, view this family law attorney, they have the expertise to answer all your questions and more.

Financial Difference Between Legal Separation and Divorce

Understanding the financial difference between legal separation and divorce is a crucial step. The following are the most significant differences between the two.

Property Division

In a legal separation, the court can make decisions about how property should be divided, but the couple remains married. This means that the couple’s assets and debts are not split, and they will continue to share them.

In a divorce, the court can also make decisions about how property should be divided, but the couple will no longer be married. This means that the assets and debts will be split, and the couple will not have any financial ties.

Spousal Support

Spousal support, also known as alimony, is financial support paid by one spouse to the other after separation or divorce. Legal separation and spousal support can be awarded by the court, but the couple remains married.

This means that the spouse receiving spousal support will still be entitled to it even if they enter into a new relationship. In divorce, spousal support can also be awarded, but the payments will end if the recipient enters into a new relationship or remarries.

Health Insurance

In a legal separation, a couple can still be covered by the same health insurance plan. However, in divorce, the couple will no longer be eligible for joint health insurance coverage. This means that a spouse who was covered under the other’s health insurance plan will need to obtain their own coverage.

Tax Implications

Legal separation and divorce have different tax implications. In a legal separation, the couple is still married for tax purposes, which means they can still file joint tax returns. In a divorce, the couple is no longer married, and they must file their taxes separately.

Choosing Between Legal Separation and Divorce

The difference between legal separation and divorce are two different legal processes with significant impacts on the persons involved. When deciding which option is best, it’s important to consider all factors involved. Ultimately, the decision should be based on what is best for the couple and their individual circumstances.

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