Why Long-Term Separations Can Be Financially Risky

For many couples, making the decision to separate can be a welcome break to work on and finally resolve the personal issues causing discord in their marriage. Legally, there is no set time limit on how long a separation in New Jersey can or should last. However, should there be? If you are involved in a marital separation that has lasted for months, or even years, without either party making a move to reconcile or divorce, it is important to be aware that this can come with certain financial risks. Here’s a look at four potential pitfalls of long separations.

Lack of control over martial assets and debts: If you moved out of the home the two of you own, are you certain that your spouse is maintaining upkeep of this asset? Are property taxes being paid? If you have a joint line of credit against your home equity or joint credit cards, do you receive monthly statements showing all account activity? Who’s paying the bill? What about your spouse’s IRA or 401K account? New Jersey equitable distribution laws generally apply to retirement accounts — but how do you know that your spouse hasn’t made a withdrawal, stopped contributing, or completely closed the account?

Opportunity to hide assets: When joint savings and checking accounts are maintained the same as they were before the separation, there is a greater risk for one spouse to devise schemes for hiding assets, including buying expensive gifts for a new love interest that can later be resold or returned for cash. Do you receive bank statements, or have you noticed any unusual or unexplained banking activity?

Divorce laws may change: Family law rule changes happen frequently in New Jersey. For example, significant changes in the past few years have made to how prenuptial and palimony agreements must be written, and the state seems poised at the brink of substantial alimony law revisions. Will these rules changes affect you positively or negatively — and do you really want to wait to find out which one it will be?

You may meet someone new: The silver lining of divorce is knowing that you are free to move on in life, especially when it comes to new romantic relationships. Meeting someone special when you are separated can be tricky. Will this person be comfortable with your “in-between” status? Will finding out that you have someone new in your life cause your relationship with your spouse to deteriorate — making the friendly divorce that looked possible, suddenly feel out of reach? Are you prepared for the possibility of a jealous spouse taking actions — such as stop paying join bills or letting go of home upkeep — in retaliation?

In his latest Forbes.com blog, Jeff Landers offers even more risks involved with lengthy separations. The point is not that separation is a bad thing. But when separation goes on indefinitely because the couple doesn’t want to deal with the hassle of getting a divorce, unfortunately, this kind of thinking may lead to more, and even worse, hassles down the road.