What to Ask for in a Divorce Settlement Agreement

Divorce settlements can be complex and emotionally challenging. To ensure a fair and comprehensive agreement, it's crucial to consider various elements beyond just the division of assets. Here’s a detailed guide on what to ask for in a divorce settlement agreement, based on different aspects of your life and financial situation.

1. Division of Assets and Debts
The division of assets and debts is often the central focus of a divorce settlement. Here's what to consider:

1.1 Marital Property

• Real Estate: Determine how the marital home and any other real estate will be divided. This may involve selling the property and splitting the proceeds or transferring ownership.
• Vehicles: Address the ownership and division of vehicles. This includes cars, motorcycles, and boats.

1.2 Financial Accounts

• Bank Accounts: Specify how joint bank accounts will be divided. This includes savings, checking, and investment accounts.
• Retirement Accounts: Ensure that retirement accounts like 401(k)s and IRAs are properly divided. A Qualified Domestic Relations Order (QDRO) may be required.

1.3 Personal Property

• Jewelry and Art: Decide on the division of valuable personal items, such as jewelry, artwork, and collectibles.
• Household Goods: List how household items, like furniture and appliances, will be divided.

1.4 Debts

• Credit Cards: Determine responsibility for any credit card debt incurred during the marriage.
• Loans: Address how other loans, such as personal loans or student loans, will be handled.

2. Alimony and Spousal Support
Alimony or spousal support may be awarded to help one party maintain a standard of living similar to what was experienced during the marriage.

2.1 Duration and Amount

• Calculation: Understand how alimony is calculated and whether it will be temporary or permanent.
• Modification: Consider terms for modifying or terminating alimony based on changes in circumstances.

2.2 Tax Implications

• Deductibility: Determine if alimony payments will be deductible for tax purposes and if the receiving party will need to report it as income.

3. Child Custody and Support
For couples with children, child custody and support are crucial elements.

3.1 Custody Arrangements

• Physical Custody: Define where the children will live and the schedule for each parent.
• Legal Custody: Decide who will make important decisions regarding the children’s education, health, and welfare.

3.2 Child Support

• Calculation: Use state guidelines to calculate child support, considering both parents' incomes and the children’s needs.
• Adjustments: Address how support payments may be adjusted for significant changes in circumstances.

4. Health Insurance and Medical Expenses
Healthcare can be a significant expense post-divorce. Ensure the settlement addresses the following:

4.1 Insurance Coverage

• Health Insurance: Determine who will provide health insurance for the children and whether one party will continue to provide coverage for the other.

4.2 Medical Costs

• Extraordinary Expenses: Address how extraordinary medical expenses, such as surgeries or specialist treatments, will be handled.

5. Tax Considerations
Tax implications can impact the financial outcome of a divorce settlement.

5.1 Filing Status

• Change in Status: Understand how the change in filing status from married to single will affect tax returns.

5.2 Deductions and Credits

• Dependents: Decide who will claim the children as dependents and how it will impact tax credits.

6. Legal Fees and Costs
Divorce proceedings can be costly. Make sure the settlement addresses:

6.1 Payment of Fees

• Division of Costs: Determine how legal fees and court costs will be divided between the parties.

6.2 Reimbursement

• Previous Costs: Consider whether one party will reimburse the other for costs incurred during the divorce process.

7. Future Financial Planning
Planning for the future is essential to ensure both parties can move on post-divorce.

7.1 Financial Independence

• Job Training: Consider if alimony should include provisions for job training or education to support future financial independence.

7.2 Retirement Planning

• Account Division: Ensure that retirement accounts are divided in a way that both parties can plan for their future.

8. Mediation and Dispute Resolution
If disagreements arise during the settlement process, consider:

8.1 Mediation

• Neutral Third Party: Use a mediator to help negotiate terms and resolve conflicts.

8.2 Arbitration

• Binding Decisions: Agree on arbitration as a means of reaching a final decision if mediation fails.

Conclusion
When negotiating a divorce settlement, it's essential to be thorough and consider all aspects of your life and financial situation. By addressing these key areas, you can work towards a fair and equitable agreement that supports both parties in moving forward.