Legal Separation vs. Divorce: Pros and Cons

Why would a couple choose to do a long-term separation? Or, to put it another way, are there actually advantages of legal separation over divorce?

Here’s a guide to long-term separations if you are contemplating a legal separation before divorce or living apart indefinitely.

Pros and cons of legal separation

Couples choose long-term separation over divorce primarily to retain shared health insurance benefits, preserve tax advantages, and avoid unfavorable property division timing. For marriages lasting ten years or longer, staying legally married also protects Social Security and pension benefit eligibility.

Before pursuing a long-term separation, consider these personal and financial implications.

Advantages

• Legally separated couples will retain any shared benefits of their spouse's health insurance and healthcare coverage purchased during their marriage.
• Certain income tax benefits remain available to couples who remain married despite a separation.
• In longer relationships, one spouse may qualify for Social Security and pension benefits based on the other spouse’s employment history.
• The division of marital property and shared assets might not be in the best interest of one or both spouses at the time of separation, making a long-term separation advantageous compared to a divorce. 
• Some couples may view a long-term separation as less complicated and confusing for kids, family, and friends.

Disadvantages

• If both partners don’t share similar spending habits, a less frugal spouse could negatively impact their former partner’s credit through careless spending.
• Your income and assets could change significantly over the course of your separation, leading to unexpected changes in the financial terms of a divorce if you eventually seek one.
• If one or both spouses die, a long-term separation might make settling their estate more complicated than it could be if a divorce is finalized.
• A once amicable separation can turn combative in some cases, forcing spouses to reach divorce terms under less favorable circumstances than if they’d sought a divorce immediately following their separation.

Financial considerations in long-term separation

Financial considerations are typically the most important factor in whether a couple remains separated for the long-term. The following economic issues commonly influence this decision:

Insurance and health care coverage

Remaining married generally means that both parties keep any insurance or health care coverage they maintained as a couple. This is especially valuable if one spouse would have difficulty obtaining coverage independently. Some couples may also decide to incorporate health care provisions into their separation agreement.

Income tax benefits

Staying married means the couple can take advantage of certain income tax benefits, including possible increases in deductions.

Social Security benefits and pensions

In marriages lasting ten years or longer, an ex-spouse qualifies to receive a share of the other ex-spouse's Social Security benefits. Some couples parting on good terms may delay divorce to reach that ten-year threshold. Others agree to special arrangements regarding an ex-spouse's pension benefits.

Mortgage or home sale

Selling a family home or unloading a mortgage may not be in a separated couple's best financial interests. For instance, a down market could mean forfeiting the opportunity for a better price. Some couples even continue living together on the same property to avoid financial loss.

Potential financial disadvantages of legal separation

If you're separated or considering a separation, keep in mind that the financial benefits could be outweighed by potential disadvantages. Consider these risks before choosing long-term separation:

• Shared debt liability: Depending on state law, a thrifty spouse may be responsible for half of the other spouse's credit card debt accumulated after separation.
• Credit score impact: If one spouse falls behind on payments, both spouses' credit ratings may be affected.
• Alimony fluctuations: Assets can change dramatically during a long separation. A spouse who becomes better positioned financially may owe significantly more alimony if they eventually divorce.
• Estate complications: Heirs may not know the deceased never officially divorced, leading to disputes.
• Difficulty locating spouse: An estranged spouse could relocate, making it hard to finalize a divorce later.

Non-financial reasons for long-term separation

Sometimes the decision to stay separated has more to do with social considerations than financial ones. Here are a few examples.

• Privacy: Some couples prefer to continue conducting their lives together without friends and family knowing the truth.
• Children: Parents may feel that separation is less confusing or easier for their kids than divorce.
• No urgency: Many couples simply don't see a benefit in divorcing, particularly if they don't expect to remarry.

Regardless of the reasons, these decisions are intensely personal. Remember—the possibility of a once-amicable separation turning unpleasant is very real and worth considering.

Alternatives to legal separation

If it’s still unclear which option might be best for you and your spouse, there are other options that might better suit your unique situation. These alternatives offer ways to either repair a difficult relationship or, if that’s not possible, lead to a speedy, amicable resolution.

Trial separation

A trial separation is commonly used by couples seeking to salvage their relationship during a particularly difficult time. Unlike divorce or legal separation, a trial separation is arranged entirely between the two spouses and is not legally binding. It simply aims to give the spouses space and perspective as they try to decide whether or not they wish to dissolve the relationship.

Mediation

Mediation aims to make a separation less hostile—and less expensive—by consulting with a third party rather than enlisting a legal team in family court. In many cases, couples can save time, legal fees, and emotional duress by enlisting a qualified mediator. A mediator will go over things like financial obligations, parenting duties, spousal support, healthcare and insurance policies, and more to help make a split as amicable as possible.

Uncontested divorce

Some relationships end on positive terms for both spouses. In cases where there are no unresolved conflicts between the divorcing parties, it’s possible to forgo the legal process typically used to enforce the terms of a divorce by filing for an uncontested divorce.

Legal separation vs. divorce FAQs

What’s the difference between legal separation vs. divorce?

The biggest difference between legal separation and divorce is your legal marital status—after divorce, the marriage is formally ended, while legally separated couples remain married in the eyes of the court. This affects your ability to remarry, shared benefits, property division, and next-of-kin status.

Is legal separation recognized in all states?

All but six states—Delaware, Florida, Georgia, Pennsylvania, Mississippi, and Texas—allow some form of legal separation, though requirements vary widely. Check your state's specific rules, as some states use terms like "separate maintenance" or have different criteria for what qualifies.

What’s included in a legal separation agreement?

A legal separation agreement includes many of the same terms as a divorce settlement and is intended to address any pertinent financial and personal obligations both parties have going forward. The document typically addresses things like the division of assets and property, child custody agreements, and ongoing support in the form of alimony or child support.

Is it possible to end a legal separation?

Yes, if both parties agree to reconcile, ending a legal separation typically requires filing a motion with the appropriate court. Consider working with a mediator when reconciling to reduce the risk of future separation.

Michelle Kaminsky, Esq., contributed to this story.