Legal Separation or Divorce: Which is Better Financially?

Couple's Fighting For Money Over The Legal Separation or Divorce Agreement With Gold Wedding Rings

Aside from the emotional trauma involved with the break down of a marriage, the most difficult aspect tends to be how it impacts your finances. Legal separations and divorce both have their individual benefits, but which is better financially?

A recent study has shown that the number-one cause for stress among millennials is money, but this in no way is a new concern. For generations, financial issues have plagued the everyday lives, careers, and mental health of a vast range of people. A divorce is tough to handle for many reasons, but it’s money that can prove to be an issue both in the short and long-term.

While divorce is the natural next step for many married couples who break up, legal separation is another option that can be appealing. In this post, we’ll discuss both choices and highlight some of the financial benefits they provide.

Pros and Cons of a Legal Separation


    • No Division of Assets: A married couple accumulate a wide range of assets over the course of their relationship. All of which will need to be divided in the event of a divorce. A separation agreement means that you will technically still be married, and therefore have plenty of time to make vital financial decisions.
    • Flexibility: The agreement also means that you have more flexibility in regards to how assets are divided, which may well prevent much of the hostility and bitterness that tends to come with divorce proceedings.
    • Tax Benefits: Filing a joint return allows you to claim two personal exemptions on the tax return rather than one exemption allowed as a single individual. Additionally, the deduction granted on the tax return is highest for married people filing a joint return.


    • You Could be Vulnerable During Conflict: Conflict and hostility are common following any breakup. And as your separation agreement isn’t legally binding it could leave your vulnerable to financial disputes and unexpected losses.
    • Remain Financially Attached: Despite no longer being in a relationship, you will still be married and therefore still financially attached. If your partner has debts or overdue payments (such as loans or mortgage) you may be liable to pay the fees.

Pros and Cons of a Divorce


    • Clean Break Order: A clean break order is where a married couple who share no assets will finalise an agreement to sever any financial ties they have to one another. This will prevent any claims if one spouse happens to acquire wealth after the divorce.
    • Divorce Consent Order: Divorce consent orders are exactly the same but detail the assets you own and how they will be divided. Once it’s made legally-binding by the court, your former spouse won’t be able to pursue a financial claim against you.
    • Financial Independence: If your ex-spouse is unreliable or untrustworthy when it comes to money, financial independence can be an enormous benefit moving forwards. You’ll now be able to save money efficiency without concerns about overspending or debt created by your ex.


    • You Lose Half of Your Assets: Losing half — or at least a percentage — of your assets is a substantial financial blow. For some, this may mean that they need to budget until they recover, but for others, it can completely change the way they live their life.
    • Property Dispute: Unfortunately, the family home can’t be cut into two equal pieces. So a decision needs to be made about the future of the property. Some people choose to sell it and use their share of the money to purchase a new home, whereas for others it can cause a lot of hostility and become something for the court to decide.
    • Lengthy Court Battles: Although lots of couples manage to handle their divorces swiftly and without too much disagreement, those who fail to agree will have their case taken to court. This will not only take a lot longer, but it will also prove to be a lot more expensive. While you may eventually get what you want in regards to assets, a lot of money will have been spent in the process.

Legal Separation or Divorce: Which is Better Financially?

Every divorce is different and every couple is unique — therefore, there is no one correct answer as to which option will suit you best financially. The end of any marriage is a tough thing to experience, and a great deal of that difficulty will be due to the financial impact it has on your life.

Your best bet will always be to seek the assistance of a knowledgeable, experienced family lawyer. Not only will they be able to advise you on the most suitable course of action, but they’ll also be able to guide you through the legal separation or divorce process.

Are you considering a legal separation or divorce and need professional advice? We can help! At KMJ Solicitors our team specialises in legal separations, divorce, and many other aspects of family law. Get in touch with us today for your free, no-obligation consultation.

Clayton spent five years working in family law with a firm in Australia before moving to the UK in 1999. He deals with all aspects of family law, specialising in all family matters, offshore trusts, company structures, international law, prenuptial agreements, high net worth cases and cohabitation law.