The decision to get a divorce can be emotional and gut-wrenching. But when you know, you know. Unfortunately, it’s often more challenging—and costly—to get a divorce than it is to get married. You have to split up two lives that may have been intertwined for decades. A divorce settlement agreement will help you unwind all of this. Here’s everything you need to know about what a divorce settlement agreement is and how to get one.
What Is a Divorce Settlement Agreement?
A divorce settlement agreement is a legal document laying out the terms of your divorce. You may have heard it described with other names, including:
- Marital settlement agreement
- Mediated agreement
- Separation agreement
- Property agreement
- Collaborative agreement
- Custody, support and property agreement
- Separation and property settlement agreement
What it’s called matters less than what’s included in the agreement. This document settles the terms of your divorce. If you can come to an agreement with your spouse, you can avoid having a judge divide your assets and property for you, making settling usually a better option than going to trial.
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Divorce Settlement Definitions
Before we get into what is in a settlement agreement, we need to briefly define a few terms, including:
- Marital property. Marital property is any item, asset or debt (with a few exceptions) acquired during the marriage. This includes income, your home, bank accounts, credit card debt and retirement accounts.
- Separate property. Property acquired prior to your marriage is, in most cases, separate property and not divided in the divorce unless it is commingled with marital assets or your spouse helps you maintain or increase its value.
- Community property states. In a community property state, marital assets and debts must be divided equally. There are only nine states that adhere to this definition: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Puerto Rico does as well and Alaska allows couples to opt into community property.
- Equitable distribution states. Every other state uses equitable distribution, meaning a court looks at each case to determine what’s fair. While it sometimes results in a 50/50 split, the asset division often favors one spouse, even if just slightly.
Division of Assets
Courts divide marital assets according to the guidelines set out for them in state statutes. When considering how to divide assets, a judge usually is required to consider several factors, including:
- What each spouse contributed to the marriage, both economically and non-economically
- Earning capacity of each spouse
- Financial resources of each spouse
- The length of the marriage
- Any separate property each spouse holds
When working to settle your marriage, you should consider the same factors. This will help to guide your decision-making and assist you in creating a fair division of assets.
If you and your spouse signed a prenuptial agreement before your marriage, its terms are used to divide your assets.
Child Custody and Child Support
Any divorce settlement agreement involving minor children is automatically much more complex. Every state begins an analysis of parental rights by considering what’s in the best interest of your child. If one spouse has been abusive or neglectful, then the other spouse may have a good argument for requesting full custody and substantial child support.
Courts also assume it is in the child’s best interests to have relationships with both parents and usually prefer 50/50 shared parenting responsibilities. This is what you need to decide when working out your own agreement:
- Where will your children live?
- Who will make decisions about your child’s education, religion and healthcare?
- How many nights will they spend at each parent’s house?
- How will you share holidays and vacation?
- Who will pay child care, healthcare and health insurance costs?
- Who will pay for school and extracurricular expenses?
- Will one spouse provide child support payments to the other?
Any divorce settlement agreement must answer these questions. While you may want to fight for full custody of your child, consider what’s in their best interest.
Alimony
Alimony, also called spousal support or maintenance, often occurs in marriages where one party earns substantially more than the other. A common example is when one spouse is a stay-at-home parent.
Consider several factors when deciding on alimony:
- How long was your marriage?
- Does one spouse have the ability to provide alimony and does the other spouse have a need to receive alimony?
- What are the financial positions of each spouse?
- Does either spouse have health conditions that could impact their earning abilities?
- What is the expected future earnings of each spouse?
- How much time will a supported spouse need to be completely financially stable and independent through education, training or job experience?
Make sure you and your spouse complete and share financial disclosures. This is required to ensure that each spouse is transparent about their financial situation and ensures a fair distribution of assets and debts.
Divorce Mediation and Negotiation
Many couples think they will agree on everything and want to write their own agreement. This is a terrible idea. Not only could you make mistakes that impact your long-term rights, but you could write it in such a way that it’s unclear how assets are divided and what happens if one party does not comply.
Mediation is often required by courts when you cannot agree on all terms of the divorce and can be extremely helpful when attempting to negotiate on your own. If you and your spouse agree on most terms of your divorce, going to mediation can avoid costly hearings and time in front of a judge. Best of all, you will work out a legal and enforceable agreement you both feel comfortable with.
Lawyers can help you negotiate a fair settlement agreement. They can help you understand what a court might decide in your case and suggest an outcome you both can live with.
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Frequently Asked Questions
Do I need a lawyer to prepare my divorce agreement?
Do you need one? No. Should you get one? Absolutely.
Even if you and your spouse draft your own divorce settlement agreement—which is not recommended—you should each have your own lawyer review it before you sign. If you or your spouse hired a lawyer to draft the agreement, you should still each have your own lawyer review it to make sure your rights are protected.
Do we need to enter into a divorce settlement before we separate?
No. Most couples separate because they can no longer live together. It’s almost impossible to negotiate a settlement while you are still in daily conflict. You can begin settlement discussions at any time, however. Most couples separate then work out the terms of their agreement.
What if I don’t like the divorce settlement agreement my spouse sends?
Don’t sign the agreement. You should never sign an agreement unless you agree with and are comfortable with all the terms and conditions. If you signed an agreement because your spouse pressured or threatened you, that agreement is likely invalid under your state’s laws and you should talk to an attorney about your options.
How does the divorce agreement become enforceable?
As soon as you sign a divorce agreement, it becomes a binding contract. It does not go into effect until the judge approves it, enters the final divorce decree or the judgment of dissolution of marriage legally ending your marriage and incorporates the terms of the settlement agreement.
Be aware that the judge may change your agreement if it is deemed unfair in any way. For example, if you are a stay-at-home parent and your spouse is a surgeon, the judge probably wouldn’t allow you to waive your right to maintenance, unless your marriage was relatively short or you received a significant property settlement.
Can I change the terms of the divorce agreement after it’s signed?
Once an agreement is signed, it can only be changed by agreement of both parties. Once it becomes part of your divorce judgment, it can only be changed by another court order (which could be based on an agreement you come to).
If you want to later modify child custody or child support, you’ll need to show a substantial change in circumstances, like one spouse moving to a different city or state, or one spouse losing their job. Alimony is most likely not modifiable, unless the paying spouse no longer has the ability to pay because of job loss or other financial situation.
What if my ex-spouse violates the terms of the divorce agreement?
If your spouse violates any of the terms of the divorce agreement, you can file a motion for enforcement with the court. You will need to prove to the court that the agreement was violated. The court can enforce it and may also penalize your spouse for violating it.
