When Marriages End by Strategy

Not every divorce ends in a contentious battle to the emotional and financial death. For some couples the decision to go their separate ways, at least legally, can be a very difficult decision to make. When you think about a couple weighing the pros and cons to divorcing, you might picture them talking about their differences, what they each want out of life and feel they are missing, or that they have opposing views about raising their children.

Then there are the marriages between two people who realize they love each other but have some rough waters ahead, or they see more advantages to dissolving their legal union. This does not mean they plan to leave the relationship or that they no longer love one another. Because North Carolina is a no-fault divorce state, some couples are quietly choosing this avenue because they see it as a financial and legal strategy that can better their lives.

What are the benefits of getting a “paper” divorce?

First, understand that a “paper” divorce is a legal divorce: couples who go this route often feel as though they have no other option. Unfortunately, there are circumstances that sometimes make them a sole option when the alternative can jeopardize your financial future, or even your health.

Protection from financial devastation

In some instances, particularly as you age, assets can be an unfortunate hinderance to obtaining the proper level of daily care that you need. Your options can be to go broke trying to pay for an average nursing home, or apply for Medicaid, which can be affected by your marital status in combination with the assets you own. Some older couples have found themselves in the position of feeling as if they had no other choice but to obtain a paper divorce just to stay alive.

Some couples may see divorce as their only way out from extraordinary medical bills for their children, too. In 2018, Today profiled a young couple whose daughter was born with a rare genetic condition which requires 24-hour-a-day care. It cost them about $15,000 a year out-of-pocket for her medical expenses. The only way to address the financial burden, they felt, was to get divorced so the mother could qualify for Medicaid as a single, unemployed mother.

In other instances, maybe one spouse’s credit is preventing you, as a couple, from obtaining certain goals such as buying a home, financing cars or business opportunities that would better your financial outlook. A couple may choose to divorce in order for the spouse with the healthier credit history to gain an advantage for the both of you. This can be a double-edged sword, however. While one party will be protected from the other’s future financial messiness by avoiding further marital debt for which he or she would be responsible, it also means only one spouse owns the home, or other asset acquired after divorce.

For some couples who have substantial retirement savings, taking an early withdrawal means paying a hefty penalty. A significant life change, such as divorce, provides access to those funds without being penalized.

What are the drawbacks of a paper divorce?

While there are some benefits to a paper divorce, there are significant drawbacks, too – ones that may be insurmountable based on your particular situation. One obvious area to address is the fact that some estate planning issues may eventually crop up that you need to preplan how to handle. You and your legal spouse would be giving up automatic rights upon your divorce such as being able to make medical decisions for one another in an emergency, or being able to visit your husband or wife in the hospital’s intensive care unit.

If one of you is in the military, a paper divorce is very likely not your best option to resolve any financial issues. You would be losing benefits such as increased basic housing and cost of living allowance. Your spouse would also be losing certain benefits such as having moving expenses paid to relocate with you, tuition assistance, and other important allowances.

Other areas to consider as a legal spouse are that you would be giving up rights to certain benefits of marriage such as:

• Filing a joint income tax return.
• Employment benefits through your spouse including health insurance, and family or bereavement leave to deal with an illness or death of a spouse.
• Should your spouse predecease you, it would also mean you no longer have an automatic right to make funeral arrangements or make any decisions as to whether an autopsy may or may not be conducted. Depending upon your religious beliefs, this can mean that your spouse’s wishes may not be upheld.
• Options for building a family by moving through a joint adoption of foster care application.
• Requesting alimony, child support or a share of marital property if your relationship truly comes to an end in the future.
• Insurance discounts, which, depending upon your needs may be more affordable through a family plan.
• Lawsuits where certain claims can only be made by a spouse such as loss of consortium, criminal conversation, alienation of affection, or wrongful death.
• Immigration benefits, such as residency, that can only be extended to a legal spouse.

Something to note is that a paper divorce will not allow you to escape marital debts that have already been incurred. Furthermore, the court would not be able to grant a divorce being sought to avoid your legal obligations. There is an unquestionable difference between committing fraud and protecting your financial future by limiting liability for future debt or loss.

There are a lot of details to consider if you have contemplated going through with a paper divorce. For some couples, they may feel this is the only option they have to obtain some financial relief. Regardless of the hurdles you face, if you do consider a legal split an option, you will need to consider the tax ramifications of divorce.

The seasoned Charlotte divorce attorneys at Epperson Law Group, PLLC understand the painstaking decision process that leads to any divorce. We approach your case with a sensitive nature and discuss the options that will offer you the best outcome for your individual situation. To sit down with one of our dedicated family law attorneys to determine if divorce is the right path for you, schedule your private consultation in our Charlotte, Boone, Concord, or Weddington offices by calling 704-321-0031, or we invite you to reach out to us through our contact page.