What are the Pros and Cons of a Legal Separation?
Full Question:
Answer:
Yes, you are still considered married while separated, so you are eligible for spousal status as a dependent on health insurance, etc. The pros and cons depend on the facts in each set of circumstances. A legal separation does not end a marriage or domestic partnership. You are not divorced and therefore can't marry or enter into a partnership with someone else when you are legally separated. A legal separation helps couples that do not want to get divorced for religious or other reasons, but want to live apart for compatibility reasons and decide on money, property, and parenting issues. For example, until a person is officially divorced, an sexual relations outside the marriage may be considered adultery, which may be considered marital misconduct in terms of alimony.
If a legal separation proceeding isn't filed, the agreement remains a private contract between the parties, but may later be merged into a divorce decree and then enforceable through the court's contempt powers. In California, a legal separation action may be brought on the same grounds as divorce actions. A judgment of legal separation does not terminate marital status of the parties as husband and wife. It is an alternative to dissolution and is generally sought upon breakdown of the marriage where for religious or other personal reasons the petitioner does not want the legal status relationship absolutely severed.
A legal separation proceeding is similar to any marriage termination proceeding in that a judgment of legal separation adjudicates support, custody/visitation and community property rights and obligations under the same standards and in the same manner as a judgment of dissolution.
Unlike a dissolution (divorce), a judgment of legal separation leaves the marriage bonds intact. In effect, however, the parties remain "married" in name only, without the rights and responsibilities that attach to marital status. The parties to a legal separation action cannot enter into a new marriage unless and until the existing marriage is dissolved by death or judgment of dissolution; but the judgment finally adjudicates the financial issues between the parties, including determination of their support obligations and a division of their community estate.
After a judgment of legal separation, the parties do not acquire further community property and owe each other no spousal duties of care and support except as ordered by the court pursuant to the judgment.
The parties to a legal separation may enter into a legal separation agreement. In order to ensure a fair and equitable distribution of the marital property, it is essential that the parties make a full and accurate disclosure of their financial situation including their incomes. They must also clearly and specifically state how they intend to split the marital property.
The court may not enter a judgment of legal separation on a petition requesting same unless both parties consent thereto . . . except where the respondent has not made a general appearance (i.e., default cases). [Ca Fam § 2345] So, if one spouse petitions for legal separation but the other responds with a request for marriage dissolution, legal separation may not be granted.
A judgment of legal separation does not foreclose a subsequent "status" action to dissolve the marriage. The court may grant a judgment of dissolution on either party's subsequent petition for dissolution.
Generally, marriage alone doesn't make both spouses personally liable for a debt. Liability on contracts such as home loans and credit cards arises by agreement between the creditor and the debtor, such as by being a cosigner, authorized user, or joint account holder. Only persons who signed the loan or credit application are liable for the debt. A joint tax return, however, makes both spouses liable for the total of the tax due.
When married taxpayers file a joint return, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire amount owed. The IRS will attempt to collect from either spouse even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. One spouse may be held responsible for all the tax due even if the other spouse earned all the income or claimed improper deductions or credits. In some cases, a spouse can get relief from joint and several liability.
There are three types of relief from joint and several liability for spouses who filed joint returns:
1. Innocent Spouse Relief for additional tax you owe because your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits.
2. Relief by Separation of Liability provides for the allocation of additional tax owed between you and your spouse or former spouse because an item was not reported properly on a joint return. The tax allocated to you is the amount you are responsible for.
3. Equitable Relief may apply when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return. You may also qualify for equitable relief if the correct amount of tax was reported on your joint return but the tax remains unpaid.
Innocent spouse is a term used as a basis for requests for relief from joint and several liability for understatement of income on a joint federal tax return and from liability arising from community property. It generally applies to a spouse who was not aware of the mistake and received no benefit from it. An individual may be found not liable for tax underpayment (including interest, penalties and other amounts) for a tax year if a joint return was filed for the tax year; there is an understatement of tax on the return that is attributable to an erroneous item by the other spouse; a taxpayer establishes that in signing the return he/she did not know and had no reason to know of the understatement; taking into account all of the facts and circumstances, it would be inequitable to hold the taxpayer liable for the deficiency attributable to the understatement; and a taxpayer elects the benefits of this provision, on the form that the IRS prescribes (Form 8857) , no later than the date that is two years after the date the IRS has begun collection activities with respect to the taxpayer. The IRS will consider whether an individual received a significant benefit either directly or indirectly, from the understatement; whether your spouse (or former spouse) deserted you; whether you and your spouse have been divorced or separated; and whether you received a benefit on the return from the understatement. Some states have also enacted similar laws, which vary by state, providing relief for innocent spouse taxpayers.
If you have filed separate tax returns in a community property state, such as California, equitable relief may be available under §66(c). In some cases, you must have been living with your spouse 12 months before filing the request for equitable relief in order for it to be granted.
See also:
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fam&group=02001-03000&file=2310-2313
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fam&group=02001-03000&file=2330-2348