Separating or getting divorced from a long-time spouse or partner is never easy. But it does not need to be harder than necessary. You don’t have to be an emotional and financial wreck if you avoid these all-too-frequent mistakes.
1. Preparing your property settlement agreement
A property settlement agreement is a legally binding agreement entered into by a Husband and Wife in connection with a divorce; it addresses the division of their assets between them. It will dictate post-divorce how your marital property will be distributed, and what financial obligations are placed on both parties. Who keeps the house? How will the family’s investments be split? And who pays alimony or child support to whom and for how long? All these issues and many more, need to be addressed in your property settlement agreement. Once approved, the settlement functions like a contract for enforcement or modification purposes. Some states use alternate terms to describe a property settlement, such as property agreement, settlement agreement, marital settlement agreement, or separation agreement.
The settlement will usually be upheld by the courts unless it is found to be invalid and unenforceable, which may not be that easy to prove. That is why you want to make sure your property settlement agreement is drafted by someone knowledgeable who can protect your interests. Most people simply do not have the necessary knowledge as to how to accomplish that. You may be able to address the most immediate needs, such as splitting the assets. But, if your agreement fails to account for any host of potential issues, you may be setting yourself up for more drama down the road.
Some potential problems are not just likely but are almost guaranteed to come up. If your marital settlement agreement doesn’t plan, don’t be surprised if you end up having to go back to court in the future.
Foremost, do not agree to something you do not understand, or to any terms that you will not be able to fulfill. For example, never agree to pay your ex-wife fifty thousand dollars ($50,000) so that you can keep your investments if your investments are worth thirty thousand ($30,000) and can only decrease in value over time.
Do yourself a favor, and make sure that your property settlement agreement truly protects your interests, not just at the time of signing but also in the future.