What is a marital settlement agreement in a divorce
Not all marriages are destined to last. However, not all marriages end in vicious altercations either. Even if a couple decides to divorce, they may be able to come to terms about the divorce in a constructive and amicable way. If you and your spouse agree on details like child custody, child support payments, and division of assets, a marital settlement agreement may be one of your best options.
This type of agreement can also be called a stipulation of settlement. It’s one of the many pieces of paperwork you’ll file with the court. The contract will be an essential part of the final judgment in the divorce.
When you and your spouse can come to an agreement about a marital settlement, a great deal of the potential stress is removed. Divorces tend to be emotionally fraught situations. Anything that makes the proceeding easier is ideal. Spouses who agree in advance about their divorce details will save long periods of painful negotiating. You may also be able to avoid lengthy court appearances, misunderstandings, and further emotional pain.
With this type of agreement, you and your spouse are working together. Together, you’ll give the court a well-negotiated agreement about the terms with which you’re ending your marriage. Since the negotiation is already done, the divorce proceedings won’t drag on for ages. You’ll have a quick, inexpensive divorce and be able to move on with your lives. Trials are costly, time-consuming, and emotionally exhausting. If you can, you should avoid one.
In New York, equitable distribution is the law of the land. If anything is considered a marital asset, it will be divided according to the law during the divorce. There are many different liabilities, assets, and properties that may be part of your settlement.
- Investments such as equity stakes, bonds, and stocks
- Joint bank accounts that are made in both spouses’ names
- Marital liabilities like vehicle loans, credit card debt, and mortgages
- Personal property such as furniture, sentimental property, electronics, antiques, motorcycles, artwork, and jewelry
- Real estate properties like investment properties, vacation homes, condos, or houses
- Retirement accounts like pension funds and 401k plans
It’s possible to make provisions for your children in the agreement. If you’ve worked out visitation issues and a custody arrangement, this may be part of the settlement. With that said, both parents are required to fulfill their obligations to their children. This means that a non-custodial parent must pay some form of child support.
No matter how well negotiated the situation, any issues regarding children will be ultimately decided through the court. The court’s job is to ensure any decisions regarding a child’s upbringing are in that child’s best interest. It’s important to have a judge legally oversee your custody and support negotiations to make sure they’re fair.
Enforcing a Settlement Contract
Like all settlements, a marital settlement agreement is a contract that is legally binding. Judgments tend to be the final ruling, and you cannot challenge the terms of the divorce afterward. There are, however, some limited situations in which one party might challenge the judgment’s validity with a marital settlement agreement.
In a typical case, the court will not overturn terms that you and your spouse have negotiated together. You must both have legal representation, though, to prove to the judge that you’ve received legal advice. Challenging the judgment is a difficult process because of the proof required.
If fraud was committed, the agreement might be challenged. When the initial divorce proceedings begin, both spouses are required to file a financial disclosure statement. This sworn statement explains all of the financial assets an individual has. Sometimes a spouse will hide assets and property rather than disclosing them. This is an illegal act that renders the agreement fraudulent. If you can prove that assets were not disclosed, the court may refuse the original agreement.
Hiding assets and property isn’t the only type of fraud. It is also fraud if you disclose your property but underestimate its value.
A mutual mistake is the second reason the court may not honor the agreement. This occurs when the spouses genuinely believed they’d accounted for all of their assets, but belatedly realized they had missed some details.
Even though neither spouse knew about the missing property, the agreement still doesn’t reflect an accurate distribution of assets. It needs to be amended to include details about the previously undisclosed property.