What is a Divorce Settlement Agreement?

Divorce Settlement Agreement

When couples are getting divorced, they may wonder what a settlement agreement is for a divorce.  If their only exposure to divorce is the long court battles that include lawyers yelling at each other and parties that refuse to speak after, they may not know that there is another way to achieve the goal of divorce—separating their lives—without going to court.  Divorce can be messy and leave the parties angry and resentful, but it can also be an opportunity to work creatively with the other party to achieve an outcome that is crafted by the parties and fits what they need going forward.  When the parties work together to create a settlement agreement, even if they are on the worst terms, they will have an outcome tailored to their lives, rather than one decided by a judge.  The best way to do this is to create a settlement agreement for the divorce.  

Defining a Divorce Settlement Agreement: 

When two people are getting divorced, they will likely encounter the idea of a divorce settlement agreement, and they will need to choose if that is something they would like to discuss.  However, if they are unfamiliar with the idea of a settlement agreement, they will not be able to make a clear decision on whether that would be the best thing for their divorce moving forward.  Therefore, it is important to know what a settlement agreement is to make that decision.  A settlement agreement is an agreement between the parties that resolves the issues included in the dispute and resolve the case by doing so.  The agreement will be negotiated between the parties and must be agreed to by both parties equally.  One party cannot force the other party to agree unwillingly.  When the parties reach the terms that they both agree on, they will put these terms in an agreement and sign it.  This will then become the controlling order in the divorce case.  

Important Term Inclusions for a Settlement Agreement: 

If a settlement agreement is being considered, the parties must negotiate and consider each of the terms that will need to be included to ensure that the divorce is fully resolved and nothing further will need to be done.  Divorce proceedings will often require determinations for a list of issues, and if the agreement does not hit all of those issues, they may face issues moving forward, either from the courts or in the enforcement of the agreement.  Therefore, it is important to ensure that the parties create a thorough settlement agreement.  Such an agreement should include three main groups of terms—general provisions, those related to children, and the division of marital property.  

General Terms: 

The first major group of terms is the general terms.  These terms will give the judge approving the agreement vital information to orient themselves and ensure that the parties have all the necessary information.  These terms generally include: 

  • Names: The agreement will provide the full legal names of both parties, including maiden names and other known names.  
  • Dates: The agreement should also include the date that the parties were married and the date that the couple separated.  
  • Children: If the couple has any minor children for which decision will need to be made, the children’s names and ages should be included.  
  • Grounds: All divorces require that the parties identify the grounds for divorce. This can be no-fault grounds, such as irreconcilable differences, or fault grounds based on the behavior, such as adultery or abuse.  
  • Location: The parties must also identify their addresses and current living situations to the court.  

Each state or location will have its own list of required general provisions, but these will generally be included in some form.  

Terms regarding Children:

After the general provisions, the parties will likely provide the terms related to the children that they share.  These provisions are important because they will establish how the children will be cared for and provided for as their parents begin to live apart.  These terms should include: 

  • Physical Custody: This is how the children will spend their time with each parent.  In most cases, this will be 50/50 custody between the parents unless there are logistical or safety reasons that one parent may not be able to care for the children as much as the other parent. 
  • Legal Custody: Legal custody refers to the ability to make decisions for the children.  Again, this is often joint between the parents unless there is a logistical or safety issue that would interfere with one parent’s ability to make decisions for their children.  
  • Visitation Schedule: While the physical custody determines how much each parent will see the children as a percentage, the agreement will also need to determine when each parent will have their children.  There are a variety of schedules that the parties may use, and they can find a schedule that works for them, whether it be 5/2/2/5 or weekly.  The parties will also need to determine which holidays the children will spend with each parent.  
  • Support: If one of the parents has a larger income and that parent will not have the same amount of visitation as the other, they will likely need to pay child support.  Most states have a worksheet that the parties fill out to determine how much child support will need to be paid.  This can be avoided in the settlement agreement, but many people elect to keep it in.  

Depending on the costs of raising the children and other issues, there may be more terms that need to be included, but these terms should help settle questions about the children and set them up for their lives with each parent.  

Division of Property:

The final terms that the parties will need to consider are the way that they divide the property that they have between them. This will help to ensure that they have ideas of how they will divide their things and move forward.  What is included in this will be determined by whether the couple’s state is a community property state or not, which should be discussed with legal counsel in the state the couple resides in?  Terms that should be included here are: 

  • Assets: Anything that the parties have purchased since they were married is included in this list of assets.  This can be homes and land, cars, personal property, bank accounts, and furniture.  The parties will need to have approximate values for all their property and divide it equitably.  
  • Debts: Another aspect of the shared property that will need to be determined is the debts that the couple has incurred.  These will need to be divided between the parties equitably as well.  This can include mortgage payments, loans, credit card debts, and student loans.  
  • House: The parties will need to decide what to do with the home that they share. They may choose to let one of the parties stay in the home, or they may sell the home and divide the money.  

Many other financial aspects could play into this analysis, but the parties must determine how each thing that they own will be divided.  

When an agreement covers the terms listed above, it is likely to pass the court’s evaluation.  Ensuring that the parties have a full agreement will keep the parties happy moving forward and will encourage the parties to continue to follow it.  

Next Steps After an Agreement: 

Once the parties have reached an agreement, they may wonder how they make the divorce official and how they will be able to enforce the agreement if their former spouse does not comply.  Enforcement will depend heavily on whether the divorce was filed in the court before the parties reached an agreement.  If there is no filing, the parties may file a joint petition under the terms of their agreement and have it finalized.  If there has been a filing, the parties will need to file the agreement in the file and ask the judge to approve it.  In either of these options, the court will need to approve the agreement to make the divorce final and officially change the status of the parties from married to single. If one of the parties is refusing to follow the order or the agreement, the other party may file a motion into the court with the agreement and the facts about the refusal to ask the court to compel them.  Because the agreement will be filed with the court, this enforcement option will be more likely than it would be in other cases.  

A settlement agreement is a great way for the parties in a divorce to avoid litigation.  However, it must be considered fully and carefully written to ensure that it covers all of the issues that the parties needed to address to begin their new lives apart from each other.  Divorce does not need to be a drawn-out court battle, but instead, it can be a place where the parties come together to create their plan and take control over the outcome.  If a divorce is happening, considering a settlement agreement may help the parties find their way forward into their new lives.  

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