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Your Financial Checklist for Legal Separation

Tuesday, 23 February 2010

When most couples arrive at the decision to divorce, most think they have plenty of time to work out the financial details of their dissolving marriage; but the truth is that the first document – the Separation Agreement - is the most important document in a divorce.  Before embarking on a legal separation in Colorado, enlist the help of a Colorado Springs divorce attorney to ensure your financial interests are protected.  

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Why is a Separation Agreement such an important part of the divorce process?

The Separation Agreement is a document that is designed to resolve the important issues of parenting time, allocation of assets, division of debt, tax liabilities, child support, spousal support and other outstanding issues as required by law.  While it is only a temporary order, to be replaced by the final agreements of the divorce, it can become a longstanding agreement if the final divorce drags on.  It also gives you the right to take legal action if your spouse fails to live up to his or her obligations. 

Here are some important ways to protect your financial future at the time of separation.  

  • With a Separation Agreement, a spouse making spousal support payments can legally claim them as a tax deduction.  But remember, if you are receiving spousal support through a Separation Agreement or court order, you must claim spousal support as income.
  • Including certain benefits such as health insurance and access to joint accounts on a Separation Agreement can help ensure their continuation after the divorce. 
  • At the time of a legal separation, it makes sense to take your name off of the lease if you are renting.  You should also take your name off of any family utility bills, subscriptions, property maintenance and other household bills that will not cause a hardship for your family. 
  • Contact all joint creditors and put a freeze on those accounts immediately so neither of you can use them. 
  • Create a record of all joint account numbers for credit cards, bank accounts, investments, insurance policies, etc.  Also, makes sure you record any jointly owned items that are stored in safety deposit boxes.

No matter how long you have been married, legal separation can be a very confusing time. Working with a Colorado Springs divorce attorney can take the guesswork out of the Separation Agreement and help you negotiate the best possible outcome.

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