Types of Legal Separation Explained
Legal separation is a legal proceeding that many people know little about. It’s often considered an alternative to going through the divorce process. Although it’s similar to divorce in many ways, legal separation affords you and your spouse some of the benefits of divorce, without proceeding with a divorce. The major difference between the two is that the term "legal separation" implies that your marriage is currently intact.
In a legal separation, you and your spouse will physically separate your lives. You may choose to buy separate homes and separate furnishings, etc. However, you will not work through custody issues and property division until you are ready to proceed with those steps . As you already know, divorce involves dividing assets and coming up with a custody agreement, etc. A key reason for choosing legal separation is when couples want to protect their assets but aren’t ready to commit to a divorce yet. Other reasons could be to avoid the financial strain of a divorce, especially when one spouse is still financially dependent on the other or to maintain religious or personal beliefs that make divorce unacceptable.
Legal separation may also make sense when children are involved, especially young children, as going through a divorce can take a toll on their health. It can be much less upsetting for children to know that you and your spouse are separating rather than getting a divorce.
Legal Separation: What Influences the Cost?
As with all matters concerning legal separation, costs to pursue a legal separation vary. Below are some of the most common factors affecting the cost to pursue a legal separation.
Complexity of the case. A highly complex case involving significant assets and ownership disputes may require more significant amounts of the attorney’s time and effort than a straightforward case in which significant asset or custody disputes are not present.
Attorney fees. The charges for legal separation vary between attorneys and law firms. Although certain attorneys may charge a lower hourly rate, often their overall fees may be more expensive because they simply may take longer to resolve the case than other experienced attorneys.
Mediation. Many parties elect to attend mediation to attempt to resolve their case. Mediation is usually much cheaper than litigation, particularly if the parties can reach a resolution themselves. It is important that any agreement reached in mediation be formalized into a written stipulation or judgment thereafter. An experienced attorney will be able to draft this document for use at court.
Court fees. Each court has separate fees for filing separate documents regarding legal separation. Therefore, legal separation costs can also be affected by the amount of court fees involved. In addition, if the parties are unable to reach a resolution regarding all of the issues present in their legal separation, and additional motions must be filed with the court, court fees and attorney fees can increase substantially.
Other factors. There are other factors, such as the income and employment situation of the spouses that can also affect legal separation fees.
The Average Financial Obligation for Legal Separation
In the divorce process, legal separation is often perceived as an extension of the divorce; however, the two processes are not the same. While legal separation and divorce have more similarities than differences, one main difference is that with legal separation the couple or individual has not filed for divorce and therefore remains legally married. You can file for divorce at any point after filing for legal separation.
The legal separation process starts with one or both spouses filing a petition for legal separation. After filing the paperwork, the spouses wait a period of 60 to 90 days (depending on the jurisdiction) before their case is settled or granted.
Like divorce, the cost of legal separation will vary depending on the complexity of your case, your financial situation and whether you hire an attorney. The average cost sits around $3,500. High-end cases of legal separation can reach upwards of $7,000 for each party; however, in many cases, couples can go through the process with little to no cost using mediation.
If you and your spouse can agree on the division of your assets and debts, spousal support and child custody and support if children are involved, the average cost of legal separation may be less than $1,000. You will save on legal fees and can file the paperwork yourself.
How to Save Money During Legal Separation
As with all that is legal in nature, there are ways to be more or less efficient in the process of a legal separation. You know, do more with less. Here are some ideas that have worked for some of my clients.
If time is not an issue, then mediation may work for you. You and your spouse will meet with a third party, trained as a mediator who will help you work through your issues, offer suggestions, help you communicate with each other and assist you in making decisions. Once you’ve made decisions, the mediator will draft a settlement agreement that you’ll each sign and then bring to your attorneys who will review it for you and file it with the court. This is by far the most inexpensive way to go through a legal separation. The trick, of course, is to make sure that you completely understand all of the issues and the ramifications before you sign a settlement agreement that has not been reviewed by your attorney. As with most things, you get what you pay for.
Collaborative law is another way to handle a legal separation. In this process, you and your spouse, through your respective attorneys, agree to resolve all issues together and without going to court. The attorneys through this process will help you draft a separation agreement that is acceptable to all and with which you will both comply. In this process, if the separation agreement is ultimately violated by one party, then the other party can sue for damages but cannot sue for a divorce or legal separation. The upside is that there are no court filings, no court appearances and no waiting to get into court. The down side is that the process is not appropriate for everyone. If there is any fear that your spouse will not comply, then this is probably not a good process for you. Also, if the process breaks down, there is no going back to a collaborative process to finalize the separation. You have to start over again.
A final note on collaborative law – The collaborative lawyers charge by the hour and you’re likely to pay the equivalent of what you’d pay for a legal separation – there are fees and costs associated with this process, in addition to the attorneys’ fees, that add up pretty quickly. And while it sounds like a good process, it really only works for people who are both committed to the process and willing to accept compromise to the point that there is a resolution.
Finally, there is the option of representing yourself at a legal separation hearing. There are plenty of books out there, probably your local library even has a copy of something written by someone who’s been separated. You can attend a legal separation clinic at your local courthouse. Or, you can ask a friend who’s separated for advice. There are lots of options to learn about how to represent yourself but, in general terms, it boils down to the following:
The goal in a legal separation is to finalize your marital status while minimizing the negative financial impact. Through any of the discussed processes, you hope to be able to work out the issues that matter while getting the process over with as quickly as possible.
Fees to Budget for when Legally Separating
It is widely considered more economical and less drastic to legally separate instead of get a divorce. Attorneys, mediators, counselors and many people who have formerly been married or are currently married will tell you that if you can avoid a divorce by staying legally separated it is usually best for everyone involved. It is often assumed that this approach creates the fewest problems because the couple is still married, even if we call it legal separation. The separating couple will not need to decide who gets what when the table is set or which bedroom someone is sleeping in. They will still be using the same pool, spa, gym, club sauna and kitchen. It is easy to believe that there are very few hidden costs associated with legal separation because the couple is merely living and continuing to share assets and liabilities. However, there are hidden costs that do not appear until you look beyond the obvious.
The most obvious hidden cost of a legal separation is the potential tax implications. The most drastic way of increasing your tax bill in this situation is to file separate tax returns for you and your spouse if you file jointly normally. Couples who separate must sever the tax benefit of filing jointly. While it may sometimes be okay to file jointly, a couple should only consider this as an option if they have a joint liability issue that requires it. A joint return also makes it easier for IRS to collect taxes due from either party; however, you will not be able to have your student loans forgiven.
Insurance is another source of hidden financial costs . If you have employer supplied insurance you may need to pay for your separation or one parent may lose access to a health plan. A dependent will not be covered on an employer provided plan. A parent may also have lost spousal coverage as part of their legal separation, or rather their spouse has endured this loss. In California, if they wish to continue coverage they must pay for it with after tax dollars. The individual continuing insurance coverage may not be eligible for assistance through a Health Insurance Marketplace or receive credits or exemptions of taxes.
The most obvious potential tax implication of a legal separation is to file separate returns and lose the benefit of filing jointly. The father, for example, does not want his spouse to have shared liability for the back taxes owed. A father may want his wife and children to avoid IRS liens. However, the mom will not be able to have student loans forgiven.
Another hidden cost of a legal separation is loss of insurance. If one spouse has an employer supplied plan the spouse will need to pay for their own plan. If the mom has the employer supplied coverage then she will need to pay out of pocket for her insurance. She may not be able to get insurance for the children without evidence of insurability.
Finally, while many assets may remain joint, assets will begin to divide. Direct payments may need to be made to a mortgage company. The utility company may bill one party for utilities. Parking fees and HOA membership dues will no longer go directly on hotel bills. These shared costs must be tracked. While the costs associated with these changes may seem minor, the changes can be frequent and unexpected.
How to Find Assistive Legal Representation
If you have no or little income and very few assets, the court will appoint a lawyer to represent you in the divorce proceedings. If you have an income that is too high for the court to appoint a lawyer to represent you, you may be able to find a sliding scale legal professional (one who will charge you sliding fees based on your income). You may also be able to access legal aid services or qualify for pro bono assistance from a law school. You can also access online resources for the preparation of legal documents for a fee that is generally much lower than that charged by a lawyer.
DIY vs Professional Legal Separation
When it comes to legal separation, one important question to consider is whether you’ll be better off hiring a lawyer or trying to handle the process on your own.
Cost: The main reason most people cite when deciding not to hire an attorney for a legal separation is cost. DIY legal separation is practically free [aside from court and filing fees], while hiring a lawyer can become expensive. However, there are alternatives if money is a factor. For example, a limited scope representation might be a good option if you only need an attorney to take care of certain aspects of the legal separation process.
Complexity: Another major consideration when deciding whether or not to hire a lawyer is how complicated your situation is. If you and your spouse have no kids, no joint debt, and few joint assets, you probably don’t need an attorney’s help with your legal separation . But if you have kids, shared bank accounts, and joint property, a lawyer’s assistance could be invaluable. When you have children, there are many potential issues surrounding visitation, custody, and support that need to be addressed in your separation. Even if you’re fairly amicable with your spouse, working on these agreements can be complicated. An attorney has the experience and knowledge necessary to ensure that your separation agreement meets legal standards and covers everything it needs to cover so that you don’t face any future surprises.
Risks: Taking a DIY approach to legal separation also brings a certain amount of risk. For instance, if you write your separation agreement yourself and it’s missing key elements or isn’t worded correctly, it could be rendered invalid by the court. Then the legal separation doesn’t provide either party with the protections it’s meant to provide.