Understanding a Property Settlement Agreement
If you didn’t negotiate and sign a prenuptial agreement with your spouse before you got married, it would be a good idea to sign a property settlement agreement if you are getting divorced.
Legal documents are a nuisance for most people, but they aren’t impossible to understand. We’ll help you review the terms of your property settlement agreement. You will then find it easier to write the contract without the help of a lawyer.
What Are Property Settlement Agreements?
A property settlement agreement, or a PSA, is a legally binding contract between divorcing spouses. The agreement helps the spouses agree on any of the following issues:
- Property division
- Child custody
- Child support
A property settlement agreement also goes by many other names, including:
- Divorce settlement agreement
- Marital settlement agreement
- Mediated separation agreement
- Custody, support, and property agreement
Spouses usually go through the negotiation process when they decide to file for a divorce. Whether the married couple has already separated or not, a property settlement agreement should be finalized before the court issues a divorce decree.
The property settlement agreement represents the final legal step in the divorce process. It specifically outlines what both parties’ rights and responsibilities after the divorce are.
Who Writes a Marital Settlement Agreement?
It’s a standard practice that either one of the spouse’s attorneys or a family lawyer writes a settlement agreement. The family lawyer is usually called a mediator, which is where the name mediated separation agreement comes from.
When the contract is drawn up, the spouses can hire different attorneys to help them review the proposed terms. This is when the negotiation process starts.
You can also draft a marital settlement agreement and give it to your spouse to review it.
What Is Typically Included in Divorce Settlement Agreements?
The terms you agree to when signing a marital settlement agreement will affect your child and dictate your future assets, property, and financial circumstances. Review the agreement thoroughly to make sure your rights are protected.
Whether you are writing and reviewing a property settlement agreement or with the help of an attorney, you should know what parts go into it.
Take a look at the table to see what to include in your divorce settlement agreement:
|Property Settlement Agreement Elements||
What They Determine
|Personal property||The division of any personal property, such as furniture, vehicles, or kitchen appliances|
|Distribution of assets||How much each spouse will get from all marital funds|
|Tax requirements||Which party will cover the majority of property tax costs upon the division of the property|
|Alimony||Whether there will be paid support for any party, who will pay it, and for how long|
|Retirement accounts||How the joint retirement accounts will be handled|
|Insurance||Who will be protected by the joint insurance, and who will stop making payments to insurance claims|
|Distribution of debts||Who will be responsible for any debts, such as credit card debts or personal loans|
What Factors Are Considered in the Property Division?
Some factors that courts consider when dividing the marital property between divorcing spouses are:
- Sources of income of both parties
- Financial standing
- Duration of the marriage
- Whether and to what degree one party has contributed to the other party’s education or employment
- Age, health, employability, and other needs of the spouses
- Whether one party contributed to the acquisition or preservation of the marital property
- Value of property that’s being divided
- Whether one party will have custody over a minor child
Can You Change the Provisions of Your Property Settlement Agreement?
Often, when the property settlement agreement is put into effect and months or years pass since the divorce, the ex-spouses change their opinions about the terms. When this happens, the spouses can verbally agree not to abide by the original agreed-upon terms and spare themselves the legal process of changing the divorce settlement agreement.
The risk the spouses take in the scenario is that further disagreements may arise, and one party could decide to enforce the original terms in the written contract.
If either party wants to change any of the provisions from their property settlement agreement, they can modify the agreement in court. The parties should both agree on the changes before they enter into the modified agreement.
Since the spouses’ circumstances change over the years, child support and custody are more modifiable than the alimony provisions. Everything depends on the wording of the original agreement.
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