A divorce settlement agreement is one of the most essential contracts that you will negotiate and sign during your divorce. But what is it, and why is it so important?
Your settlement agreement is something that should be taken seriously, and this can’t be stressed enough. That’s why Foundations Divorce Solutions has put together a detailed FAQ on the ins and outs of settlement agreements, including what should be included and some of the mistakes to avoid making during the negotiation process.
What is a divorce settlement agreement?
Your divorce settlement agreement formally outlines any agreements made between you and your ex-beau during the settlement negotiation process. The contents of these types of legal contracts are never cookie-cutter—they are tailored specifically to the circumstances of your divorce by you, your soon-to-be-ex-spouse, and any third-party mediators or divorce attorneys involved.
What is typically included in a divorce agreement?
The specifics vary by situation but typically, this document contains details surrounding:
- Split of marital property and debts (sale of the family home, division of retirement accounts, credit card debt, etc.)
- Child custody, visitation agreements (can include a detailed parenting plan)
- Child support and/or spousal maintenance (can account for expected expenses like higher education)
How do you go about reaching a divorce settlement?
How you go about reaching a divorce settlement really depends on the circumstances surrounding the split and the current state of the relationship between you and your ex. One of the biggest mistakes you can make is to decide not to have a third party mediate the settlement process.
If the divorce is amicable and uncontested, you might find common ground together without kicking and screaming, but there are advantages to choosing to work with a professional. Using a mediator or attorney to help draft and negotiate your settlement agreement is in your best interest. These professionals bring with them a level of expertise to smoothly navigate the process and a third-party mediator can also serve as a neutral buffer between you and your ex.
Should I choose to work with a divorce attorney or a divorce mediator?
Did you know that most divorces don’t need to go through the court system to be resolved? It’s true. If your divorce is uncontested, hiring a divorce attorney and going to court is an unnecessary expenditure that will end up costing you time and money.
Professional mediation services bring a different set of skills to the negotiating table—choosing mediation is typically less expensive than hiring a divorce attorney. When it’s all said and done, divorce costs can be startlingly high, with the average US divorce costing an average of $15,000, according to Thumbtack. By comparison, the average cost of divorce mediation services is between $3,500 and $7,500.
What steps do I need to take when negotiating a divorce agreement?
One of the first things you need to do is obtain the legal forms required by Washington state—if you have questions and aren’t working with a professional, contact your local court clerk. Be sure to fill in the basics—relevant information like current addresses, the date of the separation along with the marriage date, names of any children, etc. Once this is done, you can start drafting a proposed settlement agreement.
Do not sign anything right away! It’s critical that you take the time to seriously evaluate the settlement proposal before signing off on it. Remember, this is a legally binding contract that the court will uphold. Take the time to comb over the details. It’s likely that you will have to make some compromises during the negotiation process, but your end goal is to reach a settlement agreement that both you and your ex can live with.
How can I help the negotiation process?
Divorce causes substantial life upheaval, and it brings with it a mix of complicated emotions. Financial discussions like the potential sale of your family home or deciding who gets custody of the dog are emotionally charged topics that are hard to broach. Separating spouses must find common ground to reach a mutually acceptable agreement.
Do your best to set aside your emotions and focus on sorting out the details of your agreement. It’s easier said than done but maintaining open and civil communication is essential. Both transparency and communication are essential to making sure the negotiation process stays smoothly on track.
Does a judge rule on my divorce settlement agreement?
No. A judge will review your divorce settlement agreement and assess the contract to make sure that it complies with state and federal laws. A judge doesn’t rule on whether your settlement agreement is equitable or not.
What are the most common mistakes made during the process?
Letting emotional attachments take the wheel during negotiations, failing to update your estate documents, forgetting to consider your pension or social security benefits, and doing a poor job of assessing your assets and debts are big missteps, but one of the worst mistakes you can make is neglecting to consider and take a united front against a shared enemy: the IRS.
It’s true what they say: the only things you can’t escape in life are death and taxes. If you don’t factor in the taxes when it comes to the splitting of retirement accounts or the sale of joint property, it can come back to throw a wrench into your post-divorce finances. Making sure to account for any taxes you may be dinged with down the road can save you a serious headache come tax season.
This FAQ sheds some light on why divorce settlement agreements are so important and touches on best and worst practices for negotiating your settlement. Have more questions about divorce mediation and/or the settlement process? Visit Foundations Divorce Solutions to book a free consultation.