Health Insurance in Divorce: Legal Separation v. Legally Separated

One of the biggest financial hits that can come with divorce is the cost of health insurance for an unemployed spouse. Typically, the unemployed or part-time employed spouse is covered under the health insurance plan offered by the other spouse’s job.
In my practice, I typically see premiums for private policies (policies not provided through an employer) between $500 and $800 per month depending on the plan. This cost can vary greatly and can be reduced to almost nothing if certain government subsidies are triggered by the Affordable Care Act (“Obamacare”).
But, in most cases, a family is looking at a substantial additional expense to cover a spouse with no employer-sponsored health insurance.
So, it typically makes sense for a spouse to stay on the other spouse’s employer-sponsored health insurance for as long as possible to save money.
The question then, is how long can one spouse stay on the other’s health insurance? The answer in North Carolina in the vast majority of cases is until the date of divorce.
There may be language in documentation from Human Resources or in the benefits package documentation that mentions “legal separation”. This language sometimes requires the employee to report a “legal separation” to HR so that benefit eligibility for the spouse can be re-evaluated.
This is where the difference between “legal separation” and “legally separated” comes in. A “legal separation” is a specific legal order by a court that is offered in some states, but not North Carolina. The closest thing North Carolina has to a “legal separation” is called “Divorce from Bed and Board”, or a “DBB”. A DBB has to be obtained from a court in North Carolina. You have to put a lot of time, effort, and legal fees into a DBB. So you will know if you have a DBB.
In North Carolina, “legally separated” is much different than a “legal separation” in some other states. “Legally Separated” in North Carolina means that you are living under separate roofs with the intent for that separation to remain permanent (i.e. not a limited “trial separation”). Being “legally separated” in North Carolina is not a “legal separation” as that term is used in other states. “Legally separated” in this state means essentially that the one-year waiting period for divorce has begun and that some financial issues related to divorce have kicked in (there are other legal impacts of being legally separated, ask a lawyer for a full explanation).
So, if you are separating, or legally separated in North Carolina, you typically do not need to report that separation to an employer-sponsored health plan. And, both spouses can remain on the employer policy until the actual date of the divorce.
That being said, every situation is different, so contact an attorney to determine whether and how being legally separated impacts you or your spouse’s eligibility for employer-sponsored health insurance.

 

We know what we want to do. Why do we need lawyers?

Some couples can have productive conversations at the kitchen table and agree on how they want to handle the financial and co-parenting issues of their separation and divorce. And I am all for couples having these conversations as long as they are productive. I believe that the more couples are able to sort out on their own, the better for them, their families, our court system, and society in general.

These couples understandably wonder why they need an attorney if they can figure things out on their own. It is a reasonable question.

There are many reasons, but I want to focus on one in this post: the difference between what you think you have agreed to, and what you have actually agreed to.  

This came to mind while reading a blog post from a financial planner about pension divisions (I know, this sounds insanely boring).

This blog points out that “Even in amicable separations, and situations in which spouses largely agree conceptually on how assets should be divided, it’s not uncommon for there to be an innocent misunderstanding at the time that, once more thoroughly understood in the future, creates animosity or financial hardship. And, in some cases, both.”

The author frames this situation as the “We agree, but don’t really understand what we’ve just agreed upon” scenario.  

This is a very real risk. Clients (both collaborative divorce clients and non-collaborative divorce clients) frequently come to me with at least a partial outline of some agreed big-picture terms. However, part of my job is to dig into the details of those agreements because I am responsible for taking these conceptual agreements and turning them into fleshed-out enforceable legal agreements. And once I start asking about details, and explaining the consequences of the conceptual agreements, clients frequently realize that they did not actually understand what they were agreeing to do.

In my mind, one of the most valuable services I provide to clients is helping them to truly understand their conceptual agreements, and to help them tweak them where necessary to reach a full and detailed agreement that is legally enforceable.

Some clients are frustrated to learn that there is more work to be done and that their conceptual agreements are not the end of the journey. I certainly understand that. After all, even the conceptual agreements take energy and those conversations can be emotionally draining. It is just one of the frustrating parts of separation and divorce.

But, without that work, the innocent misunderstandings that come with conceptual agreements become the seeds of the animosity and financial hardship that everyone is trying to avoid.  

So, to answer the question “We know what we want to do. Why do we need lawyers?”: The answer is that a good lawyer is there to help you truly understand what you have agreed to conceptually and find and address the innocent misunderstandings before they create animosity and financial hardship down the road. 

 

 

Why You Shouldn’t Let Your Attorney Take Over Your Divorce

“I hear and I forget.  I see and I remember.  I do and I understand.” – Confucius Divorce is often a confusing, anxious time.  People often report feeling as if they are the mercy of “the system”,  the law, their spouse, the attorneys, or the courts in their divorce.  This feeling of helplessness and loss of control only exacerbates the already difficult feelings of loss, grief, and worry that come with any divorce. Ironically, people frequently respond to these feelings by relinquishing more control and letting their attorneys and the courts take over their divorce process.  They are consulted periodically, but the attorneys handle the financial analysis, the negotiation, the strategic decision making and the other important parts of a divorce case.  The courts dictate the what, when and where. In my view, this is counterproductive because it only adds to the feelings of anxiety and loss of control.  It provides a short-term feeling of relief because it takes some things off of your plate in the short term. But, long-term, it leads to less satisfactory outcomes for clients.  First, when you are not involved in the details of your divorce process, then you are far less likely to like your outcome over time.  You will not remember the decision-making process that led you to your outcome.  That may cause you to look back on your process and your outcome with confusion and doubt.  Second, when you are intimately involved in your divorce process, you will have far more understanding of the financial, legal and personal dynamics at play in your divorce.  You will not have to take your attorney’s word for what is going on and the possible solutions.  Instead, you will be processing it as it happens and be involved in generating the solutions to the issues.  That typically means that you will have a fuller understanding of how and why you reached the solutions that will shape your post-divorce life.  In my experience that leads to clients feeling more in control, more satisfied, and less victimized after their divorce. Third, many clients grow frustrated because so much of the work an attorney does is outside of the presence of the client.  A client will get a bill, but not have actually seen the work performed because they are largely detached from the work itself. In a collaborative process, the client is sitting beside their attorney for much of the time and has immediate knowledge of what their attorney is doing and how they are doing it.  There is much less “mystery time” involved in your legal fees when you are an active participant in your case. Certainly, some cases require you to involve the courts and litigation attorneys.  And no one gets to dictate the terms of their divorce just as they would like. But, there are enormous benefits to being an active participant in, and having a thorough understanding of the decisions and the decision-making process of your divorce.  The only way that I know to do that is to participate in a divorce process that involves you not delegating the analysis, problem-solving and decision making, but rather taking an active role with your attorney in those facets.  You do, and you understand.  

Being Divorced, But Not Broken

I received a message from a former client recently that reinforced and clarified for me why I focus my practice on helping people handle their divorce outside of an adversarial model. She indicated that now a year after their divorce her ex-husband comes to her home and brings dinner and sits down with her and their son to have dinner on a weekly basis.  (For context, this was not a couple that was trying to destroy each other, but there was plenty of difficult issues, hard feelings, hurt, and disagreements to make this a difficult case.) Hearing that struck a very important chord for me. That got me to thinking about why that outcome meant so much to me.  I realized that what meant the most to me in these outcomes is that people are not broken as a result of their divorce.  It is hard to define what broken is, but we’ve all seen it.  Some people are never the same after a divorce, they never get past it, they never find peace or love or satisfaction in life again.  They cannot fully commit to their new life or next relationship because their thoughts are dominated by ruminations on their divorce.  They cannot relate to their children (including adult children and even grandchildren) without mentioning their divorce.  Their divorce becomes the central event in their life and they never get past it.  It is that brokenness that I and my brethren work so hard to avoid. This is not to blame these people.  No one can blame someone for being devastated by a difficult event in their life. But, a difficult life event does not have to be traumatic.  Divorce is without question one of life’s most difficult events.  But what I seek to do, and what others who are truly committed to collaborative divorce and non-adversarial divorce processes seek to do, is to prevent a difficult divorce from becoming a traumatic divorce. Anyone who has litigated divorces for any real period of time knows that even the “winners” in court are often traumatized and broken by the experience.  “Winning” takes its own toll.  So, winning a divorce war is no protection from the trauma of the war.  There are plenty of broken winners walking out of family courts. And, importantly, my client’s son was not broken by his parents’ divorce.  His life changed, but it was not broken. The point is that is that while divorce will always be difficult, the reason that I do what I do, and the reason that you should look into handling your divorce in a non-adversarial process, is that you can be divorced without being broken.      

Saving Your Communities in Divorce

In a previous post I discussed that while there is loss in a divorce, many of the best things in your life can be saved in divorce if it is handled well. One of the most common, but unnecessary, losses that I see resulting from divorce is the loss of community.  Communities can be many things, church communities, neighborhood communities, co-worker communities, extended family communities, social group communities, etc… These communities serve one of our most fundamental needs, the need to belong.  As a result, they are crucial to our well being. Therefore, the loss of these communities can sometimes be the hardest losses to endure in divorce.  The good news is that losing these communities is almost always unnecessary. Sometimes a community is highly judgmental of divorcing couples, or one of the spouses in particular, and the community chooses to end a relationship on its own.  There is very little that a person can do about that. After all, we can only control our own behavior, not others’ reactions to our behavior. But, frequently these communities are lost due to the perceived level of conflict between the spouses and the group member’s discomfort with that conflict.  People often feel like they have to “choose sides” because they don’t think that they can manage a relationship with both spouses due to the conflict.  The discomfort of being around seething or embittered former spouses who are insulting each other or making ugly comments cause people to just avoid one or both spouses. While we as people who make up these communities can stand to find ways to be more comfortable with conflict, the reality is that saving your communities in divorce is largely up to the spouses. The best way that I know to save these community ties is to reduce the animosity and emotional behaviors in divorce.  While no process can eliminate all of the difficult emotions and social awkwardness of divorce, some divorce processes are designed to manage and reduce these dynamics while others either intentionally or unintentionally increase the animosity. The less conflict and anger you and your spouse display the less discomfort your social communities will experience around you.  And the more comfortable these communities are around you and your spouse, the less likely you are to lose these communities and the relationships that mean so much in your life and even the lives of your children. While no divorce process is perfect, give some thought to how important your communities are to you and your family and how you can preserve them as you move through your divorce.

Getting Your Divorce Ship to Shore

I am sometimes asked by prospective clients “Why do we need lawyers when we basically agree on everything already?”  It is a fair, logical and reasonable question. One analogy that I use (with some poetic license) to explain this is that divorce is akin to a sea voyage.  You have to get from where you are, which is knowing that you are separating, to where you want to be (want is a relative term here), which is having the legal and other issues of your divorce resolved so everyone can begin healing and building new futures.  And you have to do that while protecting the precious cargo of your children, your life savings, and your mental health. Like a voyage, the divorce process often feels long, difficult, dangerous, and harrowing.  It frequently feels like you are subject to forces outside your control and you wonder how and whether the experience will ever end. You know your ship and cargo, but you don’t know the waters.  You know yourself, your spouse, your children, your finances, your goals, and your worries.  But, you don’t know divorce law, you’re not a trained expert at negotiation, and you’ve never sailed into this particular port. The real value of a divorce attorney is that they know what you don’t know.  They know the waters, currents, shoals, and the shifting sandbars of the law and tax code.  They are your harbor pilot.  They get you the last but hardest bit of the way to your resolution. If you are lucky, then you and your spouse can safely sail the ship a good bit of the way yourselves, agreeing to the basic terms of how you will co-parent your children, provide for their financial support, divide your property and debts, and meet the financial needs of two households. But even in that case, you will need good harbor pilots to get the ship safely to the dock and avoid the unknown, unforeseen, and hidden dangers that lurk beneath the surface of this unfamiliar harbor.  There are many hidden details to be sorted out in any divorce, traps that can wreck your agreements, and channels that you may not have seen that may better suit your case. In truth, in most cases, divorce attorneys are needed for the entire voyage.  But even in cases where you can handle most of the journey yourself, you will need a good harbor pilot to get you safely to the dock.  Most lawyers who have practiced long enough have seen a case break apart on a rock that the parties never saw coming.  A good lawyer can help you avoid that rock and safely reach the end of your divorce journey.  

The Losses Avoided

Divorce involves loss.  That is an inescapable reality of the changes that come with the end of a marriage. Human nature is to weigh losses heavier than gains.  We have a natural psychological tendency to focus on what we may lose, as opposed to what we stand to gain. But, when assessing your divorce options, it makes sense to not just think about losses that may be realized, but also think about losses that may be avoided. When weighing and considering the outcome of your divorce, in addition to whatever you feel you may have gained or lost, the losses avoided must be given significant weight as well.  The amount of loss in your divorce is largely up to you and your spouse.  Some loss is unavoidable:  the cost of two homes is higher than for one, future plans may change, a parent may have less overall time to spend with children when parents live in two homes.  But, there are many losses that can be avoided if a divorce is handled well.  Legal fees can be held in check, the familial relationships can be salvaged, disruptions to children’s lives can be minimized, time lost at work and the impact on careers can be minimized, church and community families can be maintained, homes can be saved, traditions maintained; the list goes on. Another way of saying this is that whatever may be lost in a divorce, things are also saved.  The question for anyone facing a divorce is what do you want to save and how can you save it?  How can you save as many of the good things as possible? If you find yourself facing the prospect of a separation and divorce, you will automatically think of the losses that you fear coming.  But it is also wise to think of the losses that can be avoided, and how you can best avoid them. In my experience, perhaps the biggest difference between a “good” divorce and a “bad” divorce is that the good divorces avoid far more losses, and save more of the good things than the bad ones. The best way that I know to avoid unnecessary losses in divorce is to manage conflict instead of fueling it, to refrain from emotional behaviors instead of giving in to the urge, to jointly problem solve instead of blaming, threatening and manipulating, to retain your decision making authority instead of handing it over to the government, and to jointly work to insulate and nurture your children instead of fighting over them like property. That is not easy, and it may not be for every client and family. But it is possible, and in my practice, it is the rule instead of the exception. All it takes are two clients who are committed to avoiding unnecessary losses,  attorneys who know how to help them, and a well-designed process.  

What You Need to Know About the Divorce Industry

If you are facing a separation and divorce, and looking for legal counsel, then you need to be an educated consumer of legal services.  That means doing your research, meeting someone before you hire them, and understanding what kind of lawyer you are hiring and the processes by which that attorney is going to help you. This helps protect you from a dynamic within the legal profession described by a colleague in a recent article as follows:
What does this mean? It means that more and more lawyers are competing for the same clients. This encourages lawyers in consults to bad mouth other lawyers and convince clients that they are superior and should be hired. It also encourages the starving lawyer to “churn” the case or to lead their clients down the more expensive and painful path of litigation rather than the often times superior (but less lucrative) choice to attempt to resolve a case. Finally, it encourages the lawyer to “show off” for their client in Court and in nasty emails and letters. (Whether it helps the case or not.)
Contrary to popular opinion, the majority of family law and divorce attorney are dignified, mature professionals who would not sacrifice their integrity to gain or keep a client, to make more money or to “win” a case.  But, all of those lawyers (and the judges) know colleagues that employ the tactics described above and ruin the reputation of the entire profession. The problem is that you can’t know whether any particular attorney is going to lead you down this path without doing your homework.  So, be mindful of the dynamic described above and hire an attorney that you are confident is not going to drag you into it with them. If you are considering an attorney and hear them badmouth other lawyers or your spouse, or they aren’t willing to truly help you avoid litigation when appropriate, then give some thought to whether that attorney is right for you. The reality is that many, if not most, expensive divorces feed off of anger and clients that cannot reign in their emotional behavior.  Certainly, complex legal questions and difficult situations play a part as well.  But, as a consumer of legal services, you need to be very intentional about whether you are hiring an attorney that will fan the flames of conflict and thereby increase the time and cost of your divorce or reduce the time and cost by dampening strong client emotions and focusing on problem-solving.

How Do You Think About Money?

yankee-dollar-1239438-640x221One issue that comes up in every marriage and every divorce is money. How to make it? How much to make? How to spend it? How much to spend? What to sacrifice in order to get money and what is not worth sacrificing for more money? The different ways that spouses answer these questions in their own heads often reveal themselves in arguments, marriage counseling or, in a worst-case scenario,  a divorce negotiation. Unfortunately, we are not very good at seeing, understanding, or talking about our own individual views of money. So, we don’t talk about it with our spouse, or, we only talk about it in the form of a fight. Rather than wait until a fight or a divorce, you can get an insight into your views about money now, and start a conversation with your spouse about it while you’re both calm and nobody is worked up. The best quick tool that I know of to help you understand your (and your spouse’s) views about money are the Klontz Money Script Inventory and the Klontz Money Behavior Inventory. These were developed by two psychologists that are also Certified Financial Planners. The inventory is designed to help you gain insight into how you think about money. If you and your spouse both take it then you can see some areas where you think and behave differently regarding money. You can read more about it and what your results may mean as well. There is no panacea for having different views of money. But, knowing how you differ as spouses is a huge first step to managing your differing views and not letting those differences negatively impact your marriage. In a worst case scenario, taking these inventories in the early stages of your divorce process will help you and your attorney understand how you approach money issues. That, in turn, allows you to find a divorce solution that better fits your money values in terms of property division, alimony and child support. There is no downside (that I can think of) to understanding more about how you as an individual and your spouse think about money.  And, the upside is that it can head off unnecessary arguments, maybe save your marriage, and, at the very least, help you have a better divorce outcome.

Want to Be Happy After Your Divorce? Learn How to Communicate with Your Ex!

In my experience, probably the single most important predictor of how happy a client will be after divorce is how well they get along with their ex. If they can’t communicate well, then every conversation makes both of them miserable. If they communicate well, then these conversations are at worst neutral, and at best strengthen the co-parenting relationship. So, I advise clients to do whatever they can to communicate effectively after their divorce. Fortunately, there are many great professionals that can help after the divorce. Dr. Katrina Kuzyszyn-Jones is one of them, and she holds workshops throughout the year. You still have time to catch the November and December sessions! Find out more at http://kkjpsych.com/.