Every so often I get letters from readers who are interested in a “paper divorce,” aka, a divorce that’s purely for financial reasons. The couple plans to continue living their lives together, but technically, they’d be divorced. Here’s one that I got recently from a letter writer who was wondering if she’d qualify for a Pell Grant if she got divorced. https://www.thepennyhoarder.co…band-for-pell-grant/
What do you think of this strategy? Would you consider getting divorced on paper while staying with your spouse if it could improve your finances?
I’ve heard of parents divorcing so that their child will qualify for more financial aid. Sometimes, when one partner is ill, a couple will divorce so that the person who’s in poor health can qualify for benefits, like Medicaid. Wealthy people occasionally divorce on paper because it saves them money on taxes.
I’m not sure if this tactic would even work for the letter writer for reasons I outline in the column. As a non-lawyer, I also have no idea about any potential legal issues that could arise from a paper divorce.
I guess the big issue for me is that Pell Grant money is reserved for students with the greatest financial need. The letter writer doesn’t qualify based on financial need. What she’s proposing may be completely legit, but it still makes me a bit uncomfortable. I wouldn’t have any qualms about someone getting divorced to qualify for Medicaid or married to qualify for the other’s health insurance if that were the only way to get life-saving care. But in this case, the letter writer isn’t looking at graduating with an unmanageable amount of debt, so the need is far less pressing.
What do you think? Would you be OK with getting a divorce for financial reasons and continuing to live together? Or is this a terrible idea?
What is the purpose of marriage? You took vows forsaking all others and look at the words of the vows unless they have written them themselves, for richer, for poorer, in sickness and in health. Where does it say college and government benefits?
Someone wants to go to college, someone wants government benefits. It is not well thought out. Greed and personal gain is a powerful motivator. So where does the motivation lie?
If there is a medical need and no money, the person can get medical help, no one is denied, and pay $5.00/month toward the debt. Why should taxpayers have to shoulder someone’s reason to get out of debt free or at a reduced cost via divorce and still live together? Have your cake and eat it too, nope.
College, there are all kinds of grants and monetary help for you. Get a part time job or 2 and earn your way, you’ll appreciate your degree much more than if you swindled for it. Many jobs will help pay your way toward that degree.
Marriage for health insurance is a good thing, many need it and it is paid for by the hard work of the employee and the business they are in, that’s how it works, through honesty.
Initially, my response is absolutely not. Yes, my children and I lost out on some benefits and services once I married. I knew this would happen. However, I do work with people with very low income, and it does benefit them (state and federal services, also some local) to not get married, especially if they qualify as disabled.
The only instance I can think of where I would consider a ‘paper divorce’ is if it were a serious matter of health. And even then, I think actually carrying this off successfully would be challenging.
This is a pretty extreme way to game the system! And if that’s the case, there may be something wrong with the system.
About marrying for health insurance – many states and employers recognize domestic partnerships pretty much as an equal thing to marriage. And domestic partnerships can be filled out online and cost only a few dollars. I’ll admit that’s the route I went a couple years back with my now-wife when I wanted to get in on her employer’s excellent health insurance.
i would never do that, i married for better or worst through sickness and health til death do us part, and my husband of 48 years got called home 7 years ago, we had our ups and down but i still loved him through it all
To be honest, it sounds like too much more of a hassle than the potential reward is worth.
Plus, a good marriage is a beautiful thing and I think if you can figure out all the loopholes you can take by divorcing on paper, you probably have the brains to figure out another path that doesn’t require you to go down that path.
I would never judge someone who decided to do it if it really was in the best interest of everyone involved, but it’s just not for me.
Can’t decide on this one. We have the opposite situation, we’ve been together for over 30 years and have never legally married because both of us went through divorces and experienced the emotional and financial messes when attorneys and courts get involved, especially with children from the marriage. My partner and I had to take extra steps to protect assests, divide assets., protect ourselves and our heirs by using an attorney to set up legal documentation because of a piece of paper declaring a bond that exists between us without it. We run into financial consequences because of lack of a legally defined marriage. Look at the IRS tax tables. Out of the definitions for tax brackets, it’s either married or it’s single. The IRS does not recognize domestic partnerships. We are seeing more definitions for “household” rather than single or married in our local government programs and restrictions…but mostly it’s restrictions so we cannot benefit from being 2 single people living together. Would we marry for a financial benefit? We haven’t run into a situation we’ve felt necessitates shaking up what has worked for us for all these years, but we would not ignore any consideration now that we are retired and on a fixed income.