How Can You Negotiate a Divorce Settlement?
In California, a divorce settlement is a written document that lays out all agreements made by couples who are getting a divorce. Specifically, it will show the spouse's decision on essential issues, such as child support, child custody, spousal support (alimony), and property division.
Simply put, the settlement is a final legal agreement between spouses that documents their divorce terms. A divorce settlement agreement is often called a “marital settlement.”
While they can address most divorce-related matters, they are primarily used to reach support, custody, and property agreements.
Another primary function of a divorce settlement is related to a business or professional practice that falls under community property laws. Put simply, financial settlements are reached on who will own and maintain them.
The settlement will typically indicate which spouse will get what property, along with their responsibilities, after the final dissolution of the marriage. When a couple decides to get divorced, it's in their best interest to determine how they will divide their family properties, assets, and debts.
One major stumbling block to reaching an agreement is the emotional turmoil and bitterness prevalent in many divorces. Ending a marriage is rarely easy, especially when children are involved.
Some cannot reach a mutual agreement and will litigate the issues in a family law court, which is rarely the best legal option. The court will divide all marital property equally, which is anything acquired during the marriage. Separate property should not be included in the divorce.
You should seek experienced legal representation to ensure your legal rights are protected. Let's cover this topic in more detail below.
What Information is Listed in Divorce Settlement?
As noted above, a divorce settlement agreement is a legally written document that stipulates all the arrangements for divorcing couples. Some of the primary information in it will indicate the following:
- Who will be the primary custodial parent;
- Who will be the visiting parent paying child support;
- Who will keep the marital home and other property;
- How marital property will be divided;
- Bank and savings account issues;
- Who keeps the vehicles and household items;
- Division of retirements plans and pension;
- Dividing assets, debts, and liabilities;
- Dividing a business or professional practice;
- Health and life insurances issues;
- Children's college tuition and education cost;
- Tax filing considerations;
- Club memberships.
After a consensus has been reached, a written document must be laid out for all the agreed-upon issues, called a divorce settlement agreement. .
Both spouses must sign this document, and the California family court will rule upon it for the Judgment of the Marriage Dissolution.
What About the Family Residence?
When the issue of dividing property in a divorce occurs, the family home is typically a top priority. This is often a sticking point in negotiations as this is where the kids grew up, and many are emotionally attached to it.
Further, the marital home is often their most significant asset. When kids are involved in a divorce, the primary custodial parents will generally keep the family residence when the divorce is finalized.
During divorce proceedings, the spouse maintaining living in the family residence is expected to deal with the following:
- All the expenses to repair the home;
- Pay utilities and maintenance of the home;
- Make the mortgage payments;
- Pay the annual property tax;
- Pay the home insurance payments; and
- Any other financial obligation related to the house.
When there is a substantial difference in the spouse's income and assets, the other spouse not living in the home could be required to help financially.
In a divorce where no children are considered, they will have to agree on how to divide the value of the marital home. Some of the options include:
- One spouse buying out the other to keep the home;
- Exchange other martial assets of similar value;
- Agree to sell the home and split the assets equally;
The spouse who keeps the family home will usually be required to refinance it to remove the other spouse's name from the mortgage.
What About Determining the Property Value?
The family law court expects spouses to agree about who will take what in their divorce agreement. If they fail, the court will be forced to decide how to divide their assets and property.
An appraisal will assign the property a monetary value. The spouses will be informed of how much property they can take, including all the valuable marital items.
Some assets are often challenging to evaluate correctly, so that some people will use the expert services of an actuary or a public accountant.
After the property value is determined, the family law court will attempt to make sure a similar value of the properties will be given to each spouse.
For example, one spouse will keep the marital residence while the other holds the family business. The goal is for each spouse in the divorce to have an equivalent value of all the assets in the marriage.
Further, like property acquired during the marriage, debts acquired during the marriage are to be divided equally between the divorcing spouses.
Debts are often a reason some marriages fail, as the stress becomes overwhelming. This could change how the divorce settlement is drafted. Some couples could be advised to file for bankruptcy by their divorce lawyer.
What About Pensions, Employment Benefits, or a Business?
The interests someone accumulates in a pension, retirement, or another employment benefit while married are deemed community property and will be subjected to equal division in a divorce.
If the spouse who owns the benefit contributed to the plan before getting married, the amount of money would not be part of the community assets.
The spouse who owns the retirement or pension plan can agree to pay their spouse an amount of money as the non-owner share of the marital interest.
Professional and business practices are marital assets that must be negotiated in a divorce settlement. A business valuation will need to be conducted to determine the worth, which is often difficult as you don't know how it will perform in the future.
Business or professional practices are often valued by a certified business appraiser or public accountant, who will go through the business records before making a report.
How Can a Divorce Lawyer Help in a Settlement?
Numerous requirements must be followed in a divorce settlement that many couples don't know about. To ensure proper procedures are followed, you must retain an experienced family law lawyer.
Further, your attorney can offer valuable advice on the division of property and assets, as many couples have trouble reaching an agreement.
If negotiations fail, then divorce mediation could be the best option. Again, determining the value of some assets will only be easy with professional help, especially in a high-asset divorce.
Your lawyer can help hire expert appraisers and financial analysts to help determine the actual value of their estate and other valuable items.
A divorce settlement is often hotly debated when family assets are involved. Many items are easy to divide, but others will need a seasoned lawyer to help determine how they can be divided appropriately. In some high-conflict divorces, couples constantly fight and can't reach a settlement agreement.
Our California family law and divorce lawyers at Furman & Zavatsky can help you draft the best divorce settlement possible. Contact our law firm for a free case evaluation via phone or fill out the contact form.