Separating Under One Roof
You may ask yourself why anyone in his or her right mind would agree to stay legally tethered to someone when they are concurrently seeking to flee the relationship. Good question.
In the current Covid-19 and economic climate it has become increasingly common for married couples to separate under the one roof. After all, intact families live cheaper in one household than when they are split up into two households.
Married couples in New Jersey who wish to separate but are not ready to divorce can take advantage of a formal court process known as “divorce from bed and board” (also called “limited divorce“). This type of divorce does not end your marriage, but it does affect the rights you and your spouse have with regard to each other’s estates.
Thinking outside the box and considering a divorce from bed and board instead of a traditional absolute divorce may be a viable option that offers a real economic incentive and could be the perfect missing link to settle the appropriate case.
There are pros and cons to retaining this status and this article attempts to set those forth in straightforward detail to get you thinking, as this downward economy demands to add a divorce from bed and board to your toolbox of options.
Health Insurance—More couples have considered divorce from bed and board recently because, unlike a final divorce, the process often allows a dependent spouse to maintain health insurance through a working spouse’s employment. Due to rapidly rising costs, dependent spouses often find it challenging to obtain affordable individual coverage after divorce. Continued coverage under COBRA (The Consolidated Omnibus Budget Reconciliation Act) is available for some, but COBRA only applies to businesses with at least 20 employees, and coverage for a former spouse is often expensive and is generally available for no more than 36 months following a judgment of divorce. In most cases, a dependent spouse can continue existing coverage under an employed spouse’s policy following a divorce from bed and board. If a couple is ready to divorce but a dependent spouse is anticipating problems finding a job with health benefits, or is within a few years of Medicare eligibility, the couple can agree to go through a limited divorce and convert it to a complete divorce in the future. Do not automatically assume, however, that this will work for you. Be sure to review your health plan and consult an attorney if you have questions.
Wills and Intestate Rights—Like final divorce, a divorce from bed and board ends the rights of spouses to inherit property from each other or to claim an elective share against each other’s estates. It also generally voids the provisions of any pre-existing wills leaving property to the other spouse. You will both need to update your estate planning documents in light of the limited divorce.
Property and Tax Effects—Divorce from bed and board affects marital property the same way as a complete divorce; tenancies by the entirety automatically convert to tenancies in common, and a couple ceases to acquire new marital property. A possible beneficial tax effect is that the IRS time limits on property transfers between spouses after divorce may not apply to divorce from bed and board, allowing a couple to continue joint ownership of former marital property indefinitely without incurring negative tax consequences. The IRS generally treats couples going through divorce from bed and board as legally separated rather than either married or divorced. For more information on how the process can affect your tax status and how to file your tax forms both during and after the judgment, consult a tax professional.
Other Benefit Rights—The effect of a divorce from bed and board on different types of benefits varies. Under many pension plans, survivor benefits remain intact. Many federal benefits, including social security retirement benefits, are also unaffected. Couples considering this option should carefully review the provisions of any applicable benefit programs. If provisions are unclear, ask an attorney for advice.
A divorce from bed and board nullifies the marital privilege so that communications are no longer privileged. The Court will not grant a divorce from bed and board unless both parties have requested it or consent to a divorce from bed and board.
Until a Final Judgment of Divorce is entered, neither party can remarry.
If you are considering divorce from bed and board or legal separation. Contact me for a free consultation. I can help you understand your options, ensure that your rights are protected. vantassellaw | 201.664.8566