Divorces are most commonly resolved with a settlement agreement, rather than a trial. Trial can be stressful, time consuming, and expensive. Many divorcing spouses prefer to control the outcome of sensitive issues. A divorce settlement may come soon after filing for divorce, on the eve of trial, or anywhere in between. A relatively simple divorce settlement can often be completed without a lawyer, but it is wise to have an attorney draft or review the agreement.
The Settlement Agreement
A divorce settlement agreement is a document that sets out all the agreements between divorcing spouses in connection with a divorce action. The agreement will start by indicating the parties involved, the date of their marriage, the date of their separation, and the date when divorce papers were filed and answered. If the parties have children, it will include the children’s names (or initials) and ages. It will also set forth the reason why the parties are divorcing and their intention to settle their divorce. It will then specify the parties’ agreements in all relevant categories. Parties will benefit from being as specific as possible. Finally, the agreement will be signed and dated by both parties.
Divorce: What Must Be Settled?
In order for a divorce to be settled, you must:
Agree on the distribution of assets and debt
Agree on the terms of spousal maintenance or alimony
If you have kids, agree on their custody and support
Agree on how to deal with any future conflicts
The Distribution of Assets and Debt
There are typically a few areas in which the parties must reach an agreement before a divorce case can settle. One of the major areas is the division of assets and debt. Parties can generally make any arrangement that they see fit when dividing assets and debt in a settlement agreement. However, the parties will want to keep in mind what they would likely be awarded if they left the decision up to a judge. If a distribution may appear unequal, the agreement should acknowledge it and state the reasoning for the division. The agreement should also set out reasonable timelines. These may include specific dates for things such as when one party will initiate the process of transferring the other party’s portion of a 401(k), or when the marital house will be listed for sale.
Remember to account for attorneys’ fees and legal debts and indicate which party will pay them.
For smaller personal belongings, the settlement agreement may simply state that each party will keep whichever belongings are currently in their possession. Alternatively, it may be helpful to attach a ledger of all assets, debts, and belongings, their agreed value, and who will receive each of them. The ledger will be helpful in tallying the total value of all assets, debts, and belongings awarded to each party.
In order to completely settle the divorce, the parties must also come to an agreement about any ongoing spousal maintenance, also called alimony. A reasonable settlement agreement will set forth the amount of spousal support, the frequency, and the duration. A judge may more closely scrutinize an agreement that includes indefinite spousal support. Parties may also include occasions on which the support may be modified or automatically terminated, such as when one party remarries. The agreement may also include whether spousal support will be protected by life or disability insurance.
Child Support, Custody, and Parenting Plans
If your children or you are changing your names after the divorce, you may include the name changes in the agreement.
If there are children of the marriage, the parties must come to an agreement about child support and custody, sometimes called parenting time. Every state has child support guidelines, but sometimes high earning couples and families in other situations may be outside of the guidelines’ provisions. Nonetheless, the guidelines can help the parties to understand the amount of child support a judge is likely to order if the case does not settle. The agreement should specify the amount of support (per child), the frequency, and the duration. It may also include conditions under which the support will be revisited or modified. If the child support agreement deviates from the state's guidelines, it should include the reasons why. (Some states require specific language in this instance.) As with spousal support, if child support will be protected by life or disability insurance, this should be indicated in the agreement.
Parents must also agree on a parenting plan, which will lay out when the children are with each parent. It can also allocate decision making power between the parents about important matters such as the children’s school, religion, and healthcare. Typically a court will approve any settlement arrangement that the parties agree to, but they may deny a proposed parenting plan if they find it is not in the best interests of the child. The parenting plan may be a separate document attached to the divorce settlement agreement. Like the support plan, the parenting plan may specify a condition or date on which the plan will be revisited and may be revised.
Future Conflict and Modifications
Finally, the parties should agree on how they will address future conflicts. A divorce settlement cannot be appealed, but it can be modified. The agreement may indicate what triggers a modification, such as if one party’s income increases by a certain amount or a party remarries. The agreement may also indicate how exactly the modification may occur. For example, the agreement may state that all modifications must first be attempted through mediation. It may even state a first and second choice mediator. Parties may want to include a provision that any changes will have the same force as the original agreement so long as the changes are in writing and signed by both parties.
Boilerplate provisions are standard language included in most settlement agreements. You may want to research the provisions that your state prefers, but common provisions include:
We agree that each party has made full disclosure of all required financial information.
This agreement, including any attachments, represents the entire understanding between the parties, superseding and replacing any prior agreements, oral or written.
We intend this agreement to be incorporated into our final divorce order and have the same force of law as a court order.
This agreement will be governed by the laws of the state of ____.
If any part of this agreement is deemed invalid by a court of law, all the rest of the agreement will remain valid.
Finalizing a Settlement
Once both parties are satisfied with the agreement and have signed it, it is submitted, along with any other required forms, to the family court judge assigned to the case. The judge will most likely approve the settlement agreement and incorporate it into a final divorce order. Once the judge incorporates the agreement into the final divorce order, the agreement has the force of law. This means that any disputes regarding the agreement may be fought in court. Parties should each ask for their own copy of the final divorce order and the settlement agreement.
No Appeal for Settlements
Divorce settlements cannot be appealed. This finality may be an incentive for parties who do not want to risk the uncertainty of court. However, if there is a significant change in circumstances after a settlement, a party may ask the court to modify the agreement.