Divorce is never an easy process to get through, typically filled with emotion, stress and heartbreak. However, with 40% to 50% of marriages ending in divorce each year, it’s safe to say that this isn’t as uncommon as you might think, and you’re not alone.
Part of the process is creating a divorce settlement agreement, sometimes referred to as a martial settlement agreement or a divorce agreement. This is a legally-binding document* in which you and your spouse agree on the terms of your divorce and can cover a full range of topics, including child support, spousal support, division of property, custody and visitation rights, and any other issues that are relevant to your situation.
You’ll take your completed agreement to court, and if the judge finds nothing that contravenes state or federal laws, he/she will implement the terms of your agreement. (Note: Since there has been no formal discovery process, the judge can't assess whether or not your settlement is equitable – meaning "fair" – merely whether or not it's legal.) But how do you go about creating this agreement so it’s ready for the courts?
The following tips will help when you're creating a settlement agreement for an uncontested divorce (meaning you and your soon-to-be-ex are in agreement on all issues).
First, you should acquire the necessary legal forms from your courthouse's law library or from your state's or province's government court or justice website. (For example: www.illinoiscourts.gov/forms/approved/divorce/divorce.asp has forms as well as instructions for those seeking a divorce in Illinois.) As with any legal agreement, you need to start by stating the full the names of the parties who are involved in the agreement. In this case, it will be you and your spouse.
You’ll then need to all relevant information about your marriage, including:
In the next section, you’ll want to talk about the fact that you and your spouse both accept the terms of the agreement contained in this document (that your divorce will be uncontested); this acceptance and your witnessed signatures will make the contract legally binding.
Now it’s time to start talking about money, and who owns which assets and debts. Some will be joint or "marital," and others will be personal or "separate." Generally speaking, anything that was owned or owed by one spouse previous to the marriage remains their separate asset or debt. Anything acquired during the marriage with marital funds is marital property – even if only one spouse used the item. Only marital assets and debts are subject to division on divorce. (Of course, the distinction is more complicated than this; read "Marital Property vs. Separate Property in Divorce" for more information.)
As an "average" couple, you may have a variety of assets: such as a house, car, electronics, recreational vehicle, sports equipment, memorabilia, etc. Some of these will be separate and some will be marital.
You’ll need to communicate with your partner and iron out all the details of who is going to own what property and assets and how everything is going to be divided. Of course, if your current situation is quite civil, you’ll be able to discuss this face-to-face or over the phone to handle the ins and outs.
If matters are not quite so civil, you’ll need to think about hiring a lawyer, solicitor or attorney who can talk to your partner and their representation on your behalf.
You’ll then need to move on to how your finances are going to be divided.
Start with your joint assets: joint bank accounts, investment portfolios, retirement assets earned during marriage, etc.
Move on to your joint debts – such as bank loans, credit-card debts, mortgages, car payments, etc. Unless you agree otherwise, both of you are on the hook to repay your joint debts. Some will be personal – debts incurred before the marriage such as a student loan, a credit card that only one spouse applied and was approved for, etc. If the debt is in one spouse's name only, that spouse will generally assume the responsibility for repaying it.
Of course, you can agree to assign certain items or categories or marital property to one spouse or the other. For instance, you can agree that each of you will keep the clothes, gadgets, phones, computers, etc. that you used during marriage, as well as any items with more sentimental than real value.
This section is where you’ll go through everything you own/owe and then detail who is going to be the owner/debtor after a judge accepts the agreement.
If matters are not quite so civil – or going downhill fast as you discuss your financial issues – you’ll need to think about hiring a lawyer to represent your interests at this point.
The next step is to discuss any agreements you’ll have when it comes to your children. You’ll need to decide whether sole custody, split custody, or shared custody is right for your situation. Sole custody has traditionally been the most common choice, but increasingly, divorced parents are choosing arrangements in which the kids live with both parents: 50/50, 60/40, or whatever works for the individual family. If the children are going to live with one parent more than the other (60/40, for example), that person should be referred to as the “primary residential parent” and the other parent should be referred to as the “secondary residential parent.”
If you choose sole custody, you’ll should spell out any visitation rights that the non-custodial parent will have. Include as much detail as you can in this section – such as days of the week, time visitation starts and stops, and what happens during the holidays – to minimize the risk of problems down the line.
Finally, you’ll need to discuss child and spousal support. Note: you cannot sign away a child's right to receive support, but you can waive your own right to receive spousal support. There are child support guideline for every state and province listing the minimum amounts payable, but if you can afford it, you could also choose to include extra support for expenses such as orthodontics, music lessons, or sports camp.
Once you’ve finished all the paperwork, it’s time to read it over meticulously to look for errors or omissions. Make sure that it’s perfect for anybody who’s going to read it. If your agreement is full of mistakes, typos, and errors, not only can this harm the credibility of your case but can also create opportunities for misunderstandings. Consider having a family lawyer (or paralegal in some places) read it over before submitting your agreement to the court.
Although divorce is not the easiest process to go through, by being civil with the other party, compromising where you can, and standing up for what you believe in, the process doesn’t have to be quite so painful – financially and emotionally.
Be sure to tie up any loose ends or areas of disagreement as quickly as you can to ensure the entire process plays out as smoothly as possible when it gets to the courtroom.
To help ensure that your divorce settlement agreement is written clearly and free of grammatical or spelling errors, here are some online writing tools and resources that can help:
A settlement agreement is a legally-binding document – we cannot emphasize this point enough! If your situation is complicated or financially complex, if it involves child support, child custody, spousal support (alimony), or property division, if you have joint assets and debts, of if your spouse is contesting one or more issues, then you must at least have an experienced family lawyer review your agreement before finalizing it. Ideally, each of you will retain a lawyer to give you independent legal advice concerning the agreement before you sign and take it to court.
Family law is complicated, and you don't want to be stuck with an unfair or unworkable agreement because you didn't understand what that agreement really meant. We suggest you answer the questions in "5 Questions to Ask Yourself Before Choosing a Do-It-Yourself Divorce" before embarking on this task; understanding the potential pitfalls or problems in advance will help you make better decisions. Forewarned is forearmed!Back To Top
Certified Divorce Financial Analyst
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