Legal separation: What does it really mean?
Spouses that no longer see a future together can choose to (temporarily) separate. Legal separation means that you want to live apart from each other. You then choose not to share a home anymore. This form of divorce is chosen less and less nowadays, because the law no longer obligates you to live together during marriage. Legal separation usually means the phase before divorce, where the spouses are already living apart. This means that formally nothing has been arranged yet. This can have negative consequences when the divorce is dragged out for a long period of time, when for example the spouses cannot agree on the conditions of the divorce or when appears to be unsellable.
The 7 most important consequences of a legal separation:
1.With a legal separation you choose to terminate the mutual community of property. This means that possessions, capital (house, pension and insurances) and income are no longer mutual property.
2.If you have children, the mutual parental authority remains. The contact with the children will be determined in a parenting plan. It is also determined who will be fulfilling the parental authority in the parenting plan.
3.The mutual obligation for payment of the cost of living remains, same as with a divorce.
4.The build-up of a retirement pension can already be divided, even though you are still legally married.
5.Building up the next of kin pension can continue in the same manner as it would be during marriage.
6.You can live together with a new partner and build up a new life, but you may not marry or enter a registered partnership.
7.You are no longer financially responsible for debts of the former spouse that are entered after the legal separation.
The tax authorities
The tax authorities have their own understanding of this type of spouses: permanently separated lives. After two years of separation, the out-home partner loses his/her right to a mortgage deduction on the old –and not yet sold house. If one of the partners supports the other partner financially, the status of this money can be a point of discussion. The paying partner can consider this money to be alimony and therefore deduct this from his income in his income tax return. In this case the receiving partner will suddenly be confronted with an unexpected income taxation. This only applies to partner alimony, alimony for children is not deductible. If one of the legal partners gets into debt during the present separation, the other spouse is mutually responsible if they are married in community of property. In this case it would be better to report the temporary separation. Someone who lives somewhere else can alter his will and dissolve the community of property.
Spouses remain fiscal partners, even though they are registered under different addresses, until the divorce (or legal separation) has been requested through a judge. Those who live together until the divorce has been finalised remain fiscal partners until one of the partners registers under a different address. However, even if you, temporarily, live somewhere else, but you are registered under the same address, you remain fiscal partners with your spouse. For more information click here[JS1]
Divorce procedure
Although a legal separation is not the same as an official divorce, the procedure is almost similar to the procedure of a divorce. You will need a lawyer for this. The judge will assign your legal separation if he/she is convinced that your relationship has broken down irreparably. If you have children whom are still minors, a parental plan will need to be added to the legal separation. Do not underestimate the task of agreeing about the dividing of property, capital, housing, alimony or setting up the parental plan. Despite the fact that you will still, legally, be married, the process will be similar to that of a regular divorce. Legal separation will need to be added to the marriage property register of the court. Make sure that this is registered within 6 months or it will be annulled!
Conclusion
In short, living apart before the divorce is finalised can have negative fiscal consequences if it has not been arranged properly. Legal separation is an uncommonly used alternative for divorce and is enforced by the court.
Article in the Financieel Dagblad
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