A separation is an emotional and economic strain under any circumstances. Post-divorce choices for dependent health care are limited and solutions such as COBRA, can be very expensive.  A divorce from bed and board may provide a practical alternative to divorce under certain circumstances.

By Rosemarie Moeller 

The state of New Jersey does not have a formal law which recognizes legal separation, but, there is something that accomplishes the same effect; it’s called divorce from bed and board.  In this type of proceeding all of the economic and custody issues are resolved – child support, alimony, insurance, debt, and equitable distribution – but the marital bond is not severed.  A divorce from bed and board is authorized pursuant to N.J.S.A. 2A-34-3.

What are the advantages to this kind of arrangement?

Since the couple is still technically married, the dependent spouse can usually remain eligible for family medical benefits whereas that would have been prevented in an absolute divorce (particularly significant to a dependent spouse just short of the age when they are eligible for Medicare).

Note: It is advisable to review the summary plan description to confirm the eligibility and participation requirements to participate in the health plan and who qualifies as dependents.

Additionally, in a Divorce from Bed and Board:

  • the couple can continue to jointly retain the marital residence without an externally imposed time line.
  • survivorship benefits for most pension plans are not terminated as they would be in an absolute divorce.
  • neither party is precluded from making a claim for Social Security retirement benefits.
  • a spouse’s right to claim a veteran’s property tax exemption under New Jersey State law are not terminated.

What are the disadvantages of this arrangement?

A divorce from bed and board:

  • terminates each party’s right to claim an elective share against the estate of their spouse.
  • revokes any dispositions or appointment of property made by the will of one spouse to the former spouse.
  • results in each party being considered to be “unmarried” for federal tax purposes.
  • nullifies the marital privilege so that communications are no longer privileged.
  • both parties consent is required.
  • The parties are not free to remarry as they remain legally married to each other.
  • The parties must make an application to the court, incurring additional fees, to convert a divorce from bed and board to an absolute divorce.

For more information on tax filing see: IRC 6013  which states:

(d)(2) an individual who is legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married;

Conclusion:

A separation is an emotional and economic strain under any circumstances. Post-divorce choices for dependent health care are limited and solutions such as COBRA, can be very expensive.  A divorce from bed and board may provide a practical alternative to divorce under certain circumstances.

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Rosemarie Moeller CFP®, CLU, CFDP is the director of “Women in Transition”,  a division of EisnerAmper, LLC which specializes in helping women who are divorced or widowed get back to a new beginning.