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We live in a precarious financial climate. As the real estate market jumps all over the map, so do the average prices of gas and groceries. At the same time, the United States has never before taken more care that the disadvantaged have access to the financial assistance they need to get by. With all these constant changes, many find themselves wondering: can you get a divorce on paper for financial reasons?
While it’s possible to divorce on paper for financial reasons, such an act is considered a form of fraud. Though investigations into these cases are rare and unlikely to be pursued, they remain illegal. Before attempting a “sham divorce,” it’s vital to understand the pros and cons.
No one should ever make a major legal decision lightly. Divorce is no exception, even if it is simply a divorce on paper for financial reasons. In this article, we’ll discuss the reasons why someone might want to take this risk, as well as some of the possible downsides.
“Sham” vs Legitimate Divorce: What’s the Difference?
In our society, you’re entitled to divorce for several reasons: abuse, infidelity, or even just having grown apart. Another reason would be major differences in finances. If your spouse can’t get their finances in order, you’re legally allowed to divorce them as a result. While this action is considered legal– or ‘legitimate– its close cousin, the sham divorce, isn’t.
A sham divorce is one in which two people legally separate to evade creditors or violate tax laws. In other words, it’s completely valid to leave a partner whose shopping addiction is driving you crazy, but you can’t leave the marriage just for the financial benefits.
Getting a divorce on paper for financial reasons but hoping to keep the relationship intact is a tricky maneuver, and according to who you ask, can place you and your former spouse in a great deal of legal trouble!
Got Questions about Divorce?
Need answers about your specific situation? Low Income Relief is staffed by researchers and can’t give legal advice, but our friends over at JustAnswer may be able to help! Click on over to ask your legal questions and chat with an attorney now.
Living in an advanced society comes with a variety of benefits. One of those is a safety net waiting to catch those who are temporarily down on their luck. For some, that safety net might just be a little easier to access with a smaller reportable household income.
Government Support for Single Parents
Being a single parent is no easy task. It’s true what they say: it takes a village to raise a child. That being said, there is luckily an assortment of government programs available to help make it a little easier for all the single parents out there.
Below are just a few different programs designed to help single parents make ends meet:
- The Women and Children’s Program (WIC)
- National School Lunch Program
- Summer Food Service Program
- Supplemental Nutrition Assistance Program
- Emergency Food Assistance Program
- Temporary Assistance for Needy Families
- Childcare Assistance Program
- Head Start
- The Child Tax Credit
- Insure Kids Now
To find out whether or not a person qualifies for one of the amazing programs, household income is judged. If you and your spouse are both fully employed, this automatically makes your household less likely to qualify. For those who find that they barely cross that legal income limit and still struggle, it’s no wonder they might consider divorce on paper for financial reasons.
Check out this article to find more great ways to save money as a single mom: “Free Stuff for Single Moms.”
Medicaid is a nationwide program that helps provide health insurance to millions of low-income Americans, pregnant women, and the elderly. Through these amazing benefits, millions are able to receive the life-saving healthcare they need!
Like any other program, however, Medicaid has income limits. To see where you fall within this range, consult the official chart.
For the elderly or those with disabilities, this income limit isn’t hard to reach. Most Americans, however, find that they would have to face down severe poverty before qualifying for the help they need. That is, unless they were to take extreme measures.
By seeking a divorce on paper for financial reasons, an American couple might simply be looking for the help they desperately need. Even well-paying jobs frequently don’t offer health insurance, and in today’s climate, many consider it more important than ever before to have access to affordable healthcare.
Escape from Debt
Financial debt can be more than just a slight burden. Debt and low credit scores affect our lives in massive ways, from how likely we are to get approved for a credit card to our ability to finance a house or car.
Depending on what area of the country a couple resides in, they may find that debt isn’t equally shared in the case of a divorce. This means that, by getting a divorce, a couple might be able to consolidate all debt onto one person, allowing the other to finance a home, vehicle, or any other large purchase without the anchor of their previous debt.
Of all the aspects of seeking a divorce on paper for financial reasons, this one is by far the most tricky. Be very careful when pursuing this method. That debt doesn’t disappear along with the marriage certificate; all debt needs to be paid eventually!
While it may seem as if getting a divorce on paper for financial reasons might just be a tiny lie no one could care about, this is far from the truth. This illegal act can have major implications for your relationship, your life, and your future.
Before seeking a divorce, you must understand the possible consequences of such a decision.
Considered a Form of Fraud
As I mentioned earlier, a divorce on paper for financial reasons is a form of fraud. While this isn’t a commonly investigated area, if you make such a choice to take advantage of welfare benefits, it’s possible you could face fines, suspension of benefits, or even jail time.
Welfare fraud is considered any action that allows you to take advantage of greater governmental benefits than you are legally permitted. Among these are many programs that we mentioned before: the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), Low Income Home Energy Assistance Program (LIHEAP), and the Children’s Health Insurance Program (CHIP).
In the end, are you likely to get caught? Probably not. If you did, would it be life-changing? Absolutely.
Takes a Great Deal of Trust
Let’s face the facts: marriage isn’t easy. It takes a great deal of commitment, work, and, above all, trust. While in theory marriage is just a piece of paper, you may find that it’s harder to maintain the resolve it takes to keep that partnership working once the legal commitment is removed.
If you’re reading this article, chances are, you and your partner are already undergoing a great deal of stress. According to expert marriage counselors, financial issues are the number one cause of marital problems. You may immediately think that by adding more money, you can eliminate this concern. In actuality, the complication of changing debt, legally separating, and engaging in an act of fraud is only likely to complicate matters further.
Sacrifices Legal Benefits of Marriage
When you’re facing significant debt or other financial issues, it can be tempting to think that you can solve all your problems with just the little extra help that some of these amazing government services can provide. However, in thinking this way, you’re ignoring all the long-term benefits that marriage provides.
By remaining legally married, you:
- Qualify for an estate marital tax deduction
- Qualify for the gift tax marital deduction
- Roll over a deceased spouse’s IRA into your own
- Contribute to your spouse’s IRA
- Receive survivor’s benefits
- Receive social security benefits
- Save on health insurance
In addition to these financial benefits, there are all the social ones. Being legally married allows you automatic rights to make decisions for your partner in the case of an emergency injury. If the worst were to happen and your partner was not able to make it through, you’d then have the legal standing to hold those who hurt them responsible.
It may seem silly to think in “worst-case-scenario” terms, but it’s far better to consider these problems now than to wait until they arise.
There’s a reason people get married in the first place. The financial benefits and security help establish long-term bonds that allow partners to better legally and financially stand by one another.
Trying to make a life work alongside another person isn’t easy; it means compromise, communication, and effort by both parties. One of the biggest issues most marriages will face is a financial hardship, and every couple must face down this dragon differently.
For some, deciding to divorce on paper for legal reasons may be in their best interests, but regardless, it’s crucial to understand both the pros and cons before taking any major action.