Financial Settlements Before a Divorce

by Angie Gambone
Divorcing couples usually finalize financial issues in a Marital Settlement Agreement.

Divorcing couples usually finalize financial issues in a Marital Settlement Agreement.

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Before a divorce is finalized, couples must reach a resolution of all financial issues. Most often, this is accomplished by entering into a Marital Settlement Agreement, a comprehensive contract that sets out each party's rights and responsibilities, including issues related to custody, parenting time, child and spousal support, and the division of marital assets and debts. Before granting a divorce, a judge must be certain that the couple has resolved all financial issues so the parties will not have to return to court at a later date.

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Marital Settlement Agreement

Once a Marital Settlement Agreement is drafted and signed by both parties, it is incorporated into the final judgment of divorce and becomes a binding court order. In addition to the financial issues, the Marital Settlement Agreement deals with all issues related to your children and property, including vehicles, houses, medical and life insurance, child-related expenses and division of retirement and pension plans. There is no wrong or right way to draft a Marital Settlement Agreement -- couples are free to add any agreements they wish specific to their particular relationship.

Benefits of Uncontested Divorces

There are many benefits to working out all issues in a divorce without fighting them out in court. A typical divorce that is contested and goes to trial takes anywhere from six months to several years depending on the complexity of the case. Divorce attorneys typically require an initial down payment of several thousand dollars to get started and these fees can increase at any time. Also, if your divorce must proceed to a trial, each party has no say in the result and the judge will make the decision on any unresolved issues for you. To avoid time-consuming and expensive litigation, it is best to reach a mutual agreement on financial issues.

Ways to Draft a Marital Settlement Agreement

If you and your spouse get along well, you can sit down together and draft your own Marital Settlement Agreement. But it is sometimes beneficial to utilize a professional to assist you. Also, mediation methods are commonly used during divorce negotiations. A mediator, or similar professional, will act as a neutral third party and guide you and your spouse through the drafting of a Marital Settlement Agreement. In more complex cases, the parties may each utilize their own attorneys to assist in drafting the agreement without the need for court intervention. Finally, if a couple has a very simple divorce or limited funds, there are online providers of sample Marital Settlement Agreements. Couples can purchase these forms and complete them on their own.

Filing a Divorce Complaint

Sometimes couples discuss their divorce settlement before either side files for divorce, but it is more common for one party to file for divorce before negotiations begin. The party filing for divorce must fill out a divorce complaint and other supporting documents. You may contact your local courthouse to determine which forms your county requires. You must then serve your spouse with the paperwork by mail or personal service. Your spouse has a certain number of days within which to respond to the divorce complaint. After the response is submitted, both parties usually begin to work out the terms of their Marital Settlement Agreement.

Cutting Short the Divorce Process

Once you file for divorce, the court will place you on a schedule with deadlines for providing certain documents and appearing in court for various pretrial conferences and the divorce trial. This can take up to a year or more. If you and your spouse reach an agreement on all marital issues and draft a Marital Settlement Agreement, you do not need to follow the court's schedule to the end. Instead, inform the court that your case is resolved and you may be scheduled for a final uncontested divorce hearing in as little as one month.

Court's Review of Marital Settlement Agreements

The court's role in an uncontested divorce is not to make decisions with respect to particular issues in your divorce. Instead, it only needs to be convinced that you and your spouse entered into the agreement voluntarily, competently and without any undue influence. At the final divorce hearing, the judge will ask questions about your voluntary participation in the drafting of the agreement. Although the court is not under an obligation to accept the terms of the Marital Settlement Agreement, in almost all cases, it accepts the agreement unless it finds the terms to be unfair.