What You Need to Consider When Drafting a Settlement Agreement
Posted on: May 9, 2019
If you are getting divorced and are working with your soon to be ex-spouse on drafting a settlement agreement there are certain factors that must be taken into consideration when it comes to dividing property assets fairly.
The first thing to look at is financial assets. These include cash, savings accounts, checking accounts, money-market accounts, Certificates of Deposit, bonds, stocks, Real Estate Investment Trusts, savings bonds, and mutual funds.
Something else to consider is retirement assets. These are typically before-tax assets, which means in order to gain access to them, you will have to pay income tax on any distributions. Keep in mind that receiving $100,000 in retirement assets is not the same as $100,000 in a checking or savings account, because the tax will need to be paid on the retirement assets, which will significantly reduce the value.
Employee benefits are any fringe benefits that are received from an employer. This includes year-end bonuses, vacation time, sick time, health insurance, life insurance, disability insurance, stock options, and expense accounts. Typically, if a benefit is guaranteed, it would become an asset or income term.
When drafting a settlement agreement, each party should draft a list of personal possessions. This includes items like cars, motor homes, motorcycles, boats, fine jewelry, furniture, and other sentimental items.
Real Estate is something else that needs to be accounted for in a settlement agreement. This includes your marital home, vacation properties, timeshares, other homes, or even business properties. You need to address who will receive the property, or if a property is being sold, who will pay the expenses until it sells and how the proceeds will be divided.
People like to fight over assets, but debts are also important to consider. List out all of the debts accrued over the course of the marriage and determine how the debt will be paid off and by whom. In the instance of a mortgage or car, typically the party receiving the property is expected to pay the mortgage or debt associated with it.
Life insurance policies also need to be considered. Some of these have cash values, while others do not. The settlement agreement should specify who will own the policies and who will be listed as the beneficiary.
Let Kendall Gkikas & Mitchell, LLP Help Draft a Fair Settlement Agreement That Will Hold Up in Court
Unfortunately, as long as it is, the list above is not exhaustive. There are many other things to consider including Frequent Flyer Miles, club dues, inheritance, trusts, and more. That doesn’t even account for spousal support payments, child custody agreements, and child support. You really need an experienced family law attorney like Kendall Gkikas & Mitchell, LLP on your side to fight for a fair agreement. Contact us today at 909-482-1422 to schedule your initial consultation.