A divorce settlement is an arrangement that is made between two parties that are going through a divorce. It is a legally binding agreement that details the final terms and conditions of their divorce. A divorce settlement states who will receive what with respect to assets, property and such, including items such as: household items, real estate, vehicles, bank accounts, memberships, debts, pension plans and more. Additionally, a divorce settlement specifies instructions for child custody and visitation rights, child support, alimony and legal names. A divorce settlement must be signed and agreed upon by both sides taking part in the divorce and ultimately serves to formally end a marriage.
Preparing for the Divorce Settlement
Prior to finalizing the divorce settlement, there are several things that should be taken into consideration, including the following items:
- Understanding – There is a lot of jargon and fine print involved in a divorce settlement, so prior to signing on the dotted line, it is recommended to consult with a professional divorce lawyer to ensure all terms are understood and that no essential elements are left out.
- Finances – The financial situation of both parties must be assessed. Among other things, it is important to document the assets, liabilities, expenses and income of each side of the divorce. Additionally, insurances and credit ratings should be evaluated and factored into the final settlement.
- Taxes and Future Agreements – How will the couple be filing their taxes at year end? Individually or jointly? Who will claim the children (if any) as dependents? How are wills and trusts acknowledged in the divorce settlement? How will retirement plans be recognized in the divorce settlement or change upon ending the marriage?
A divorce can be a complicated event in a person’s life. Taking the proper steps to ensure the best interests of both sides are ensured can save many headaches in the future.