Marriage Settlement Agreement

What Is a Marital Settlement Agreement?

A marital settlement agreement is a contract between a couple who plans to divorce and wishes to divide their joint assets, as well as define their rights and obligations towards each other. It focuses on the three main pillars of divorce. They are division of assets, child custody, and provision of child and spouse support.

A marital settlement agreement can be referred to in a different way:

• a divorce agreement;
• a marriage dissolution agreement;
• a marriage settlement agreement and many more.

Despite the document’s title, the contract’s subject does not change. It is focused on the division of assets that belong to a married couple only. Civil partnership without official registration of a marriage cannot use a divorce agreement.

What Is the Meaning of Settlement Agreement?

A marriage settlement agreement plays a crucial role in a separation and divorce process. Below are some interesting legal facts about a marriage dissolution agreement:

• Must-have for a divorce case. It may appear that having a marriage dissolution agreement is a must. Yet, this is not so. There is no federal or state law that obliges parties to enter a divorce agreement. Having a marriage settlement agreement is NOT mandatory. At the same time, it is highly recommended for couples who plan to file for divorce. A written agreement gives more predictability in the divorce and reduces legal costs.
• Change the Law. Without a written settlement agreement, divorce may become a nightmare for both. Depending on a state law, a division of marital property can take an unprecedented turn. For instance, some states divide a property in a fair manner. It means that each spouse’s share is adjusted to each spouse’s contribution. The states that have such an approach are New York, South Carolina, and others. While states like Idaho, Nevada, or New Mexico adhere to a stricter rule—only equal division. A written divorce agreement allows you to set up your own rules for a property division in case of divorce.
• Affects a Court’s Final Judgment. If the parties choose to enter a divorce agreement, it may directly affect a court’s final judgment. In most of the cases, a court will follow in their divorce decree what is agreed in a divorce agreement. For example, if parties decide to divide their vacation home 50/50, most probably a judge will approve it. In certain cases, a judge may not reflect a party’s arrangement in their final judgment. This is a case when a divorce agreement puts either of the parties in an unfavorable position. For instance, when one spouse gets only assets, while the other spouse gets only debts.
• Amicable Divorce Settlement. Having a marriage settlement agreement means that parties want an uncontested divorce. An uncontested divorce is also known as a friendly divorce. This is when a couple agrees on property division and other aspects of separation.

What is the difference between a marital dissolution agreement and a prenuptial agreement?

A marital settlement agreement and a prenuptial agreement may appear similar. However, this is only so at first sight. A marital dissolution agreement is created to end a marriage. While a prenup agreement is aimed to set up a concrete basement for it.

We made a short list of bullet points to address the differences:

• Who are the parties? A marital settlement agreement is signed between a married couple. Contrary to that, a prenup is signed only by a couple who plans to get married.
• When is it signed? A marital dissolution agreement is signed when parties want to separate. It is also possible to sign a divorce agreement at any time before a divorce court order is issued. A prenuptial agreement is for a couple who registers their marriage. A married couple cannot sign a prenup agreement.
• What is the subject? A marital dissolution agreement defines the division of marital property. So does a prenup agreement. They can both address support obligations to either spouse after a divorce. A prenuptial agreement, yet, cannot deal with child support or child custody. While a divorce settlement agreement can address those matters. A prenuptial agreement can also regulate daily life, family relations, or house chores.

Any third parties involved? For a prenuptial agreement to become enforceable, it should be signed by both parties. A marital dissolution agreement can only be enforced by a court. If a divorce agreement is signed, it does not mean that the divorce will happen the same way they agreed on paper.

What Information Should Be Listed in a Marital Settlement Agreement?

There is no universal divorce agreement format to follow. This is so because all divorces are different. Some couples may want to address how to separate property only. Others may want to add certain post-divorce obligations.

Party Details.

Every divorce settlement agreement template should include full details of the parties. They are full name, address, and contact details.

Details of Marriage

A couple should state the exact date and place where their marriage was registered. The present description deals only with marriages registered in the United States.

A marital settlement agreement template should say the date the parties stopped being a couple. In other words, when a couple stopped being together emotionally and physically. Of course, it should not be necessarily the exact date.

Parties should indicate if either spouse moves out from their marital home. If this is not possible, parties may also state the same in their divorce agreement. For instance, one spouse lives in a separate part of a house or in separate bedrooms.

Process of Separation

A marital settlement agreement can serve a dual purpose. It can be signed by the parties:

• to regulate a separation process or early stage of divorce settlement. In that case a final divorce agreement will be made by a court order. Parties may also wish to sign one more divorce agreement at a later stage of their divorce procedure.
• to regulate both separation and divorce. In that case a document includes property division, custody, and alimony support directives.

A divorce agreement does not have an end date. Thus, setting up the purpose of a document clearly helps to avoid ambiguity at later stages.

Division of Marital Property

A divorce agreement is also known as a property settlement agreement. Usually a division of marital property is a core subject of a divorce agreement. This is a part where most of the family battles happen. Let’s delve a bit more into details.

Marital property is a summary of all assets a couple has. Those are assets they acquired jointly throughout their married life. It could be:

• Real estate (marital home, vacation home, apartments, commercial premises, etc.);
• Tangible movable assets (boats, furniture, etc.);
• Business assets (e.g., company’s shares, stocks, family business, etc.);
• IP rights (e.g., trademarks, patents, etc.);
• Digital assets (e.g., social media account, domain name, etc.);
• Personal property (e.g., jewelry, car, vehicle, brand clothes, etc.);
• Savings (e.g., 401(k) accounts, other retirement plans, work bonuses, etc.); and
• Insurance (e.g., life insurance, other types of insurance, etc.)

The list of a couple’s joint assets above may contain other types of assets or income as well.

When drafting a marriage settlement agreement template, consider two more important things. First are state laws. Laws of a state where a divorce is filed matter. A marital settlement agreement template that violates state laws cannot be enforced. The second thing is the financial position of both spouses. If a divorce agreement puts either party in a difficult financial position, it cannot be enforced either.

A property settlement agreement may suggest different ways for property division, including

• All marital property is divided 50/50.
• Part of the assets is transferred to one spouse, the rest to the other.
• One asset is transferred to one spouse, while the other gets a monetary compensation.

Last but not least. A settlement agreement divorce template does not address division of individual property. Individual property is property that either spouse got before a marriage. Usually the list of such a property is provided in a prenuptial agreement.

Child Custody and Child Support

If a couple has children, they may wish to discuss how to divide custody. A settlement agreement divorce template addresses the following aspects:

• Legal Custody. Legal custody is a responsibility over a child’s health, security, and well-being. Legal custody could be given to either of the parents or to both of them jointly. In simple words, legal custody defines a parent who is responsible for adopting important decisions on behalf of their child. Which school to go to? Which church to attend on Sunday and many more?
• Physical Custody and Visitation Schedule. Physical custody is another aspect of the divorce agreement template. It basically says with whom a child should permanently live. Or where would a child’s permanent home be? In rare cases, joint physical custody is possible. A parent who gets sole physical custody is known as a custodial parent. A visitation schedule is a timetable for a non-custodial parent to see their children. In a separation agreement, parties may discuss various aspects of physical custody. They are time-sharing with their kids, spending vacations and holidays together, etc.
• Child Support. A non-custodial parent has to pay regular child support payments. A divorce contract template can define the amount and regularity of such payments.

Spousal Support

When divorce happens, parties have to start their lives again from scratch. This is especially difficult for a couple who did not work through the marriage. For instance, a woman has to give up their career to look after small kids.

A divorce settlement agreement template can help here. Parties may agree on financial support for either of the spouses. Such financial support is known as spousal alimony or spousal support.

The main goal is to help a weaker party to recover financially and be able to support themselves again.

There is no definition of which form it should have. It could be regular payments or coverage of certain needs (e.g., renting an accommodation).

While working on a divorce and settlement agreement, think of

• Amount of Payment. Neither federal nor state family law defines the amount of spousal alimony support. It could be decided by the parties in a divorce contract template. In some divorce cases a judge may intervene to increase payments. This is common if, in given circumstances, the amount of a payment is not enough.
• Type of Payment. Spousal support can be in the form of a one-time payment or in the form of regular payments. Regular payments could be monthly, quarterly, or annual. It is also vital to set exact dates for regular payments to avoid uncertainty.
• Duration of Payment. A divorce agreement template usually provides the duration of spousal payments. It could be a specific date by which support is paid or a number of years. An end date for support payment can be determined by specific events in the future.
• Review of Payment. A divorce agreement template may provide circumstances when an amount should be reviewed. In most cases, such a revision has a downward trend. A spouse who gets alimony may get married or make a profitable business. A spouse who pays alimony may suddenly become ill or lose their income. All those circumstances should be considered as grounds for regular review. A regular review may happen once or twice a year.

How to Write a Marriage Settlement Agreement?

There are rules a couple should follow to get a divorce property settlement agreement:

Discuss together

A draft of a divorce agreement is a work for two. Of course, both parties may engage their attorneys and accountants for additional consultation. Yet, a final word is always a couple’s choice.
Do not try to threaten or put pressure on the other spouse. Even if they sign a document now, they won’t maintain it in a court. In a worst-case scenario, a court may find such a divorce agreement non-enforceable.

Telling the truth

During negotiation of a settlement agreement, parties should be honest with each other. This is where both parties have to share their declarations of disclosure.

A declaration of disclosure is a list of all assets, debts, and liabilities either party has. It is a mandatory document by which either spouse discloses their financial position. It is being used in a divorce settlement process to divide marital property.

Failure to include all assets in declarations of disclosure may have legal consequences. It could result in court fines.

Clear terms

While working on your divorce agreement sample, make sure the wording you apply is clear. Clear wording leaves no room for ambiguity. For example, Kate and John work on their sample divorce agreement. John agrees to pay regular payments in the amount of USD 1,500 per month for some time. The wording ‘for some time’ is a hidden pitfall in that case. As it could be interpreted in various ways. John may think about two years, while Kate may expect them to be paid until she finds a good job.

Sign document

A divorce separation agreement should be signed by both parties. This is a mandatory requirement. If it is not signed by either of the parties, it cannot be a legally binding contract. As a result, a legally binding contract cannot be enforced in the court.

Submit to a judge

The last step is to file a signed divorce agreement with a court. This should be done by either of the parties’ attorneys.

What Should a Marriage Dissolution Agreement Cover: Extra Tips?

In the previous chapters we discussed a document’s content. Though this is a theoretical side only. As a coin, a divorce settlement process has theoretical and practical sides.

• Find a lawyer. Making a settlement agreement divorce template is only 10 % of the divorce process. A divorce settlement case is a complex legal procedure. Ex-spouses have to separate property they own together and split up accounts. Besides that, there is a lot of paperwork to be done. This is where an attorney can help you with.
• List all your assets. An essential part of every divorce settlement is listing all your assets. Do not try to hide them.
• Be ready to negotiate. An open dialogue is a key for success and amicable settlement. It saves lots of time and money along the road.
• Check a prenuptial agreement. Remember the main rule. In a divorce settlement, an agreement divorce template cannot overrule a prenuptial agreement. If you already have one, a court will follow the rules set up in a prenuptial agreement first.
• Define custody separately. It is a good practice to define child custody and child support in a separate document.
• Time is of the essence. A divorce agreement should be finalized before the divorce decree is issued. In other words, before a judge decides on a divorce. If there is a court order in place, a divorce agreement cannot change it.

Do I Need an Attorney to Prepare the Marital Settlement Agreement?

A law does not oblige you to use an attorney to create a divorce settlement agreement sample.

If you are an attorney, you can draft a divorce agreement yourself. For the rest, it is better to use a customized settlement agreement divorce template.

Avoid using free online templates. They might not be suitable for your particular situation. Besides that, they may have lots of mistakes. All this may affect your future financial position and the divorce’s outcome.

Get Your Marital Settlement Agreement Template at Faster Draft

It is very easy to get your customized settlement agreement divorce template at Faster Draft. Follow a few easy steps below:

1. Press button “Create Document.”
2. Answer questions in the questionnaire. Your answers help to customize a document’s template for your needs.
3. Select a document’s format—PDF or Word.
4. Proceed to payment.
5. Download your customized divorce agreement template. A divorce agreement template is ready to be used instantly.
6. We strongly advise you to seek prior legal advice before signing any divorce agreement.