Creating a Settlement Agreement

You’ve sat down with your spouse and hammered out what you think is a pretty great settlement: you get to keep all of the property you really wanted and your future ex gets stuck with all of the debt.  Whether or not that agreement will hold up in court depends on a number of factors, including how it is worded, whether or not there was full financial disclosure by both parties and possibly whether both parties had independent legal counsel.

That being said, you should make every effort to negotiate your settlement agreement rather than fight over every item in a San Diego City court.  Such agreements can have benefits over a judge’s ruling including: they take less time; they reduce the financial and emotional costs; and the parties are more likely to abide by the terms of the agreement.

If you and your spouse are on talking terms, initially you can sit down with each other on neutral turf and see what you both can agree on in terms of a settlement starting with the assets and debts before moving onto discussion regarding spousal support, children if applicable and anything else that eventually will need to be determined.  At the very least you will likely come away from this experience learning your spouse’s priorities.  I suggest you listen more than you talk-Listen to Learn!  If there are still items that the two of you are not able to reach agreement on after this, you can choose to go down the mediation path and hire a mediator to work with you both together to help you reach agreement on the outstanding issues or you can choose to each hire an attorney who can help you resolve them by negotiating with the opposing attorney.  By taking a “baby step” approach to creating a settlement or separation agreement, you have a good chance of resolving things in a civilized manner without having to resort to going after each other’s throat.  Some Carmel Valley couples will be able to settle all issues; others will be able to settle some issues and have to litigate the rest.

In addition to property issues; your settlement agreement will need to thoroughly address spousal or child support as well as custody and visitation issues.

Your settlement agreement should be very comprehensive – particularly changes.  It’s up to you to make sure that your lawyer doesn’t leave any assets out of your settlement agreement (unless it’s something that you’re going to litigate in court).

You don’t necessarily have to list every single personal possession in your settlement agreement, but you should list personal items that are important to you.  Your agreement should state who gets each asset or how the asset or the proceeds from its sale will be divided.  The following are the most common categories.

• Financial Assets, Retirement Assets, Employee Benefits, Appreciation Rights and Restricted Stock, Personal Property, Real Estate, Debts, Closely Held Business, Property Settlement Note, Life Insurance, Other Assets etc.

Please note it is critical that you understand the pros and cons and intricate details that pertain to each category when it comes to figuring out the best way to divide property, BEFORE you sign the agreement.  A Certified Divorce Financial Analyst (CDFA) specializes in all of the financial aspects of divorce. A CDFA can help you divide the property in an equitable manner and help you avoid long term regret over decisions made during the divorce process.

Things that should be considered when dividing property in each of the categories listed above will be explained in detail; one category at a time over the next several weeks on The Carmel Valley Life.

______________________________________________________________

Karen helps attorneys; mediators, individuals and couples, navigate through the financial morass of divorce and widowhood. Her expertise lies in understanding the special tax and financial issues that can plague divorce and she helps clients get their financial fair share and equitable settlements. She provides financial analysis, projections and solutions so clients can avoid long-term regret over decisions made early on in divorce and widowhood.  Karen offers a range of financial, investment and insurance services that address clients’ complete financial picture and long-term needs before, during and after marriage.  She is currently writing a book entitled, “To Have and To Hold Onto Your Financial Fair Share: Financial Decision Making When Marriage Ends in Divorce or Death.”