Portrait of the Couple:
Sandra and Thomas have been married for 47 years. They have two adult children. The oldest, Edward, lives in California with his wife and two sons, ages 5 and 8. The younger child, Margaret, lives in New York with her husband and their 8 -year -old daughter.
Recently Thomas retired from his job as an engineer with a defense company located in the greater Boston area. Sandra, who has always worked part time, has experienced some health issues, making her think about cutting back at work or even just stopping. Financially, the couple will be able to maintain their present standard of living without working. Money is not their problem. Being a couple seems to be their problem. Daily they find themselves annoying each other. Sandra does not like having Thomas at home and kind of under her feet. Thomas does not like Sandra checking up on him, asking him what he is doing or what he has done. Neither one wants to go for marital therapy. Thomas wants Sandra to leave him “be.” Sandra wants Thomas to find things to do out of the house. Absent a commitment to working on their relationship and perhaps structuring a new relationship as a couple and as individuals, the Hansons have begun to discuss the “d” word—divorce. Their children are shocked; they are not surprised that their parents have not taken advantage of their free time to travel or find new hobbies. No, the shock to them is why a couple married over 40 years and in their 70(s) would divorce now. “Why?” they ask. “Just do your own thing.” “Divorce is ridiculous,” they proclaim almost in unison.
Sandra says she does not care if they divorce or separate. She needs her own space. Thomas just shrugs and mumbles: “your call.”
In recent years at The Centre for Mediation and Dispute Resolution, we have noted a significant increase in couples in long term marriages who decide to separate after one or both have retired. Not surprisingly family, especially children, have difficulty understanding why divorce would even be a consideration at their age or after having been married so long. Some family or friends or both suggest separation as an alternative to divorce. This article is intended to address the differences, positive and negative, of choosing separation or divorce when couples decide to live apart.
Scenario One: Separation:
In Massachusetts there is no route to a “legal” separation. This means that a couple who decides to live apart does not need the court’s approval of the terms of their separation. This of course also means that the terms of the couple’s agreement are not enforceable. As a result, many things can stay the same such as health care proxies, power of attorney documents and wills. You can each be the other’s beneficiaries as designated during the marriage. Indeed, you can also file joint income tax returns and retain spousal rights to employer benefits for retired employees.
Interestingly, before divorce became more acceptable, socially and religiously, it was not unusual for couples to choose separation over divorce
There are also disadvantages to consider, the most obvious being that you cannot marry without becoming a bigamist, which is of course illegal, even in Utah.
In addition, since the agreement is not enforceable, if either of you does not uphold the terms you have reached for how assets will be held or divided or moneys used, there is no legal route to protect you. Then, too, liability issues remain in separation as they do in marriage.
A central question in considering separation pertains to the division of assets and money. Certainly, you can divvy up nonretirement funds –brokerage accounts and bank accounts, household furnishings and possessions, real estate, vehicles and the like. You cannot, however, divide up retirement funds before they are accessed. All retirement holds are held in the name of the employee only and as such are never joint accounts, albeit they are considered marital assets. One spouse can draw upon the retirement funds and give the other spouse half of the funds. Taxes could be shared under a joint filing. The sticking point is that you cannot transfer the funds in separation, prior to cashing in, as you can after divorce. This means that you need to agree upon the present and future use of retirement holdings and, if you do not file joint tax returns, each one’s liability for the taxes.
In retrospect, perhaps the greatest consideration in electing to separate, rather than to divorce, is that you are still connected, financially and in some respects, personally. There are both advantages and disadvantages to this entanglement.
Scenario Two: Divorce:
Most divorcing couples complain about the intrusive involvement of the court in their divorce. The very fact that the judge has the final say in approving your petition for divorce is offensive to many who believe that they, not the judge should have the final say in structuring their divorce agreement. As such many would view the court approval process as a negative, yet the court’s enforceability role as positive.
In divorce you will need to have new health care proxies drafted and new power of attorney documents, although you could name each. New wills need to be drafted, although here too, you may name each other as beneficiaries. Parties who divorce should review beneficiary terms for all assets, not to mention life insurance. Your divorce agreement should be clear as to agreements in all areas, including future entitlements that name each other.
Divorce provides each of you with control over your own finances and decisions unless your agreement contains provisions for retained joint ownership of specific assets. In the latter incident your agreement should be clear on what terms govern joint assets in the present and in the future.
It is not always clear if separation or divorce is more financially advantageous or that one is better than the other. Each couple is different, not only with respect to their estate holdings and thoughts on future entitlements for each other and their children or relatives, but also their ability to make future decisions alone and/or together. There is no one-size fits all model. Mediation as a problem solving process, provides each couple with the forum for examining the advantages and disadvantages of separation and divorce for them and their family.
