Divorce has the potential for being a highly contentious legal process. With that said, there are many instances in which parties to divorce proceedings can reach an agreement between themselves regarding the matters at issue in the case. A number of primary elements are found in a typical divorce property settlement agreement. These include:
- Division of marital assets and debts
- Disposition of marital residence
- Child custody and parenting time
- Child custody
- Spousal maintenance or alimony
Division of Marital Assets and Debts
A significant component of a divorce property settlement agreement is a division of marital assets and debts. Indeed, this element of an accord gives a divorce property settlement agreement its name.
How an assignment of debts and distribution or assets or property occurs in a divorce is guided by applicable state law. There are two primary ways in which the laws of the different states in the country deal with property and liabilities in a divorce proceeding:
- Equitable division of property standard
- Community property standard
Most states in the country utilize the equitable division of property standard. Equitable property division requires that assets and debts of marriage be divided between the parties in a just and fair considering the surrounding circumstances.
On the other hand, the community property standard dictates that a marriage’s assets and debts should be divided equally between the parties. If an equal division is not going to occur, a demonstration must be made about why that is not happening in a specific divorce case.
Disposition of Marital Residence
When it comes to the matter of assets and debts, a specific focus typically is on the disposition of the marital residence, particularly if a divorcing couple has minor children. There may be a desire to maintain the marital residence to provide a consistent home for the children.
The most common way the interest in a marital residence is divided between the parties is by selling the property. The sale proceeds are then divided between the parties to a divorce.
Child Custody and Parenting Time
Despite commonly being called a property settlement agreement, the instrument also addresses child custody and parenting time or visitation issues. In addition to issues surrounding assets and debts, matters pertaining to child custody and parenting time tend to be the most contentious in divorce proceedings.
Public policy encourages parents to reach an agreement regarding child custody and parenting time during a divorce case. If that agreement is reached, it is incorporated into the overall settlement document.
Even if the parties reach an agreement on child custody and parenting time, that concord needs to be approved by the court. A judge reviews an agreement regarding child custody and parenting time to ensure that it is in the child’s best interests.
Each state has adopted what is known as child support guidelines. These guidelines provide parameters regarding a child support obligation upon divorce.
Using the guidelines, parties to a divorce are encouraged to attempt to reach an agreement regarding child support. This obligation is then included in the property settlement agreement.
As is the case with custody and visitation, a court must approve any agreement reached regarding child support. The court’s focus is to ensure an agreement regarding this matter generally complies with the child support guidelines. If there is a deviation, the court considers whether it is in the child’s best interests for there to be a departure from the guidelines.
Spousal Maintenance or Alimony
Finally, a property settlement agreement can include provisions that deal with spousal maintenance or alimony. States also have laws that govern how spousal support or alimony is computed.
If the parties can craft a property settlement agreement, the document is presented to the court. The court will usually schedule a brief hearing if there is a settlement agreement in place. At the hearing, the court approves the property settlement agreement and then issues a final divorce decree.