On a number of levels, the preferable way in which to resolve a divorce case is for the spouses to negotiate a settlement agreement. With the assistance of legal counsel, a negotiated settlement of a marriage dissolution case can be a reasonable possibility. The successful negotiation of issues in a marriage dissolution case culminates in the creation of a divorce settlement agreement. There are some essential elements to a divorce settlement agreement that are necessary to understand:
- Division of assets and distribution of debts
- Child custody and parenting time
- Child support
- Alimony or spousal maintenance
- Disposition of marital property
- Division of retirement plans
Division of Assets and Distribution of Debt
A primary element of a divorce settlement agreement is addressing the need to divide assets and distribute debts. Every state has adopted a standard for dealing with assets and debts in divorce.
A majority of states utilize what is known as the equitable division of property standard. This standard directs that assets and debts be distributed in a fair manner based on the facts and circumstances of a case. The other standard is known as community property. Via this standard, the presumption is that assets and debts should be equally divided between divorcing spouses.
Although a divorcing couple has leeway in regard to the division of assets and distribution of debts, consideration must be paid to the standard in place in a particular state. A court ultimately reviews the manner in which property and debt are settled and will be called upon to approve the agreement reached by the parties in a marriage dissolution case.
Child Custody and Parenting Time
If children are involved in a divorce proceeding, custody and parenting time will be a major element of a divorce settlement agreement. As is the case with assets and debts, spouses to have latitude when it comes to an agreement on custody and parenting time.
With that said, this element of a divorce settlement agreement is also subject to review by the court. In this instance, a court applies what is known as the best interests of a child standard. In other words, while the parents are able to agree to a custody and parenting time scheme, what they put forth in a settlement agreement must be deemed to be in the best interests of a child.
Child Support
Parents in a divorce case are also able to reach agreement in regard to child support. Unlike property and debt division as well as custody and parenting time, parents arguably have a bit less latitude in regard to child support. An agreement regarding child support must generally follow a state’s child support guidelines. If there is a deviation from the child support guidelines, a reasonable basis for that variation must be demonstrated.
Alimony or Spousal Maintenance
A divorce settlement agreement may also include provisions governing alimony or spousal maintenance. Each state has laws that provide guidance on this. With that said, a divorcing couple has considerable leeway when it comes to an agreement regarding alimony or spousal support.
Disposition of Marital Residence
The marital residence oftentimes is a point of contention in a divorce proceeding. The manner in which the marital residence is to be disposed can prove to be a primary element of a divorce settlement agreement. Common ways in which a marital residence is dealt with in a marriage dissolution case include:
- Setting aside the marital residence to the parent with primary custody until the child or children reach majority, after which the property is put up for sale
- Sale of the marital residence, with the proceeds to be divided between the parties
- Setting aside the marital residence to one of the parties, with the other party receiving a larger share of another asset to offset this distribution
Division of Retirement Plans
Finally, a major element of a divorce settlement agreement oftentimes is a provision detailing the manner in which a retirement plan or retirement plans are distributed between the parties. Bear in mind that depending on the type of retirement plan at issue, a supplemental document may be needed, including a qualified domestic relations order, or QDRO.
An experienced divorce lawyer is in the best position to draft an appropriate settlement agreement.
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