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Negotiating Divorce Settlements
During divorce, dividing up assets equitably is probably one of the most difficult tasks. But negotiating divorce settlements does not have to get ugly if you take an organized approach to the whole process.
Fortunately, most divorce settlements are finalized without going to trial. Today many divorce cases use mediation or collaborative laws to decide who gets what marital assets after the divorce is finalized. Yet the courts must still affirm the terms of an agreement. Judges will affirm a couple's divorce settlement if the assets are divided equally. If a judge does not agree on some of the terms in a settlement agreement, the couple will have to continue negotiating those terms. If a divorce settlement cannot be reached, the case could go to trial.
Typical divorce settlements involve the following items:
- Property and debt
- Pensions and retirement accounts
- Spousal support
- Child custody and support
Factors to Consider in Divorce Settlements
Divorce settlements divide marital property, debts and resolve related financial matters. Each state has different laws to establish the division of property. So one of the first questions that must be resolved is, who will keep what property? This includes homes, cars and business interests. Generally, the person who gets the property takes over the debt related to that property after the divorce is finalized. Other factors to consider:
- Couples should also consider the costs associated with maintaining these assets when dividing up property. If a person cannot afford related costs such as insurance premiums and monthly bills after the divorce, they will likely have to sell them.
- Divorcing couples also need to decide how they will divide up liquid assets. Liquid assets are bank accounts, stock or any other type of negotiable asset that can be converted quickly into cash. Usually, the person who keeps most of these assets will end up with more debt after the settlement.
- Tax refunds should also be addressed. If one spouse is getting a tax refund for the year, the couple need to determine if they will divide that money or use it to pay off mutual debts.
- Pensions also need to be factored into the settlement. During the final phases of divorce, a spouse loses any death-while-in-service benefits from their partner. Divorcing couples need to determine what to do after they lose income from pension benefits-if they are accessible-after divorce.
- Divorcing couples also need to determine if alimony will be paid after the divorce and for how long. Alimony is court-ordered spousal support that a judge can order after the separation. If a person remarries, alimony payments end.
- If children are involved, divorcing parents must first determine child custody. In addition, they need to establish child support payments, health insurance coverage and financial issues related to the child such as tuition costs. This insures that children are cared for both emotionally and financially.
Ultimately, the types of divorce settlements reached can vary from couple to couple. Divorcing couples need to remember to divide up debts in accordance with their state's divorce laws. A lawyer can help you achieve this.