You and your soon to-be ex have a signed separation agreement. Now what? Have you considered the advantages and disadvantages of when you file for divorce?
In mediation, you’ve worked out the terms of your separation agreement: custody, child support, the division of all marital assets, debts and maintenance, (alimony) if any. The signed and notarized separation agreement becomes a LEGAL CONTRACT. You don’t have to wait for a judgment of divorce for the separation agreement to be legally binding.
But you haven’t yet submitted the separation agreement to the Supreme Court, along with the other documents needed to file for your uncontested divorce.
Should you and your spouse file right away, or hold off and live under the terms of the legal separation agreement for a while without obtaining the final judgment of divorce?
We educate parties in mediation about the pros and cons of waiting to file:
- Medical Insurance: If you are insured as a family member under the medical insurance plan offered by your spouse’s employer, the day of your final judgment of divorce you lose the right to be carried as a family member and all medical benefits under the plan. You are entitled to Cobra, but that can be a costly alternative.
- So many couples are delaying their divorce because of this caveat that insurance companies are trying to crack down and cut off coverage for the nonemployee spouse if there is only a signed separation agreement,. So far this has been a miniscule problem, but check your spouse’s employer’s policy carefully and make sure it’s not true in your case!!
- The 9½ year mistake: You’ve been a stay-at home mom or dad. After 9 years of marriage you and your spouse are divorcing, and you’re panicked because your social security statement says that when you retire you’re entitled to a grand total of $300 a month! What should you do? Make sure you don’t get a final judgment of divorce until you’ve been married ten years.
- According to the official Social Security Website “If you are divorced, your ex-spouse can receive benefits based on your record (even if you have remarried) if; your marriage lasted 10 years or longer; your ex-spouse is unmarried; your ex-spouse is age 62 or older; the benefit that your ex-spouse is entitled to receive based on his or her own work is less than the benefit he or she would receive based on your work; and you are entitled to Social Security retirement or disability benefits. If you have not applied for retirement benefits, but can qualify for them, your ex-spouse can receive benefits on your record if you have been divorced for at least two years.
- If you or your spouse elect to take a portion of other’s social security benefits under this rule because it is greater, it doesn’t reduce the other party’s share. In other words, “free” money from the federal government if you don’t get divorced for ten years!
- Retirement Benefits: Though technically many retirement funds can be divided when there is a signed notarized separation agreement, more and more companies are requiring a final judgment of divorce before they divide these funds between parties.
- You can’t remarry if you are not legally divorced!
- The drop dead December 31 date: Do you want to file married or single? We tell parties to speak to tax experts to find out what is in each of their financial interests. And keep in mind that the IRS considers your marital status on the last day of the year to be your marital status for the whole year. If your divorce is finalized December 31 in a certain year, the IRS considers you single for the entire year, and you can’t file married.
- The Road to Divorce is Badly Backed Up: In New York City, once uncontested divorce papers are submitted to the court, it usually takes at least six months or longer for them to be signed by a judge, then entered into the clerk’s records – the official date of divorce. So if you plan to be divorced by a certain date, allow for court delays.
- You want to throw that divorce party! Some people, understandably, don’t feel they can move on with their lives until they’ve officially separated from their spouse.
As in all aspects of life, timing is important in divorce. When you officially untie the knot can have emotional as well as financial consequences that need to be discussed in mediation.