With nearly 50% of marriages ending in divorce, the US has the sixth-highest divorce rate worldwide. Creating an equitable divorce settlement is among the first steps in the divorce process. A fair divorce settlement allows each party to make a clean break, leave the marriage with what they need to start over, and honor the sacrifices made by both parties. Trying to divide assets and debts on your own can quickly become emotional and divisive. An experienced divorce attorney can help mediate and guide the process.
What Is A Divorce Settlement?
People often say they settled their divorce “out of court” because settlements are negotiated outside of a courtroom. Both parties must agree to a divorce’s terms and conditions in a divorce settlement. Reaching an agreement avoids a trial and potentially lengthy and expensive court battles. You can also have a partial settlement, in which the parties agree on specific issues and allow the court to settle the rest.
Working with your spouse to reach an agreement is ideal since it gives you control rather than leaving it up to a judge. Missouri is an “equitable distribution” state, which means judges will divide marital property in a way they believe is equitable but not necessarily equal. Generally, in equitable division states, marital property is everything that either partner earned or acquired during the marriage unless you agree otherwise.
Whether you reach a full or partial settlement on your own, your divorce settlement must be approved by a court. In most cases, both parties are required to attend a court hearing. When creating a divorce settlement, a couple comes up with their divorce terms and presents them to a judge. If the judge finds the agreement compliant with state and federal laws, they approve the stated terms.
What To Include In a Divorce Settlement
The requirements of a divorce settlement vary by state. Child custody and support, division of assets, debts, retirement accounts, and businesses are just a few things that should be specified in your divorce settlement. This article will focus on asset and debt division.
The first step is to decide what you need from your divorce settlement and what you are willing to negotiate. This will help guide settlement negotiations and avoid unpleasant surprises. A divorce settlement agreement is legally binding and may cover various topics. Knowing what to include in the settlement agreement will ensure you end your marriage on fair terms. Read on to learn more about some essential financial factors to consider in a divorce settlement.
Dividing Assets and Debts
The distribution of assets and debts can result in significant financial consequences for both parties involved in a divorce. Depending on the complexity of your financial situation, negotiating the division of marital assets and debts can be stressful. It’s essential to have an experienced divorce attorney work on your behalf to ensure an equitable settlement. The first step is to compile a comprehensive list of all marital assets and debts.
Property Division
In a divorce, properties are categorized as either marital/joint or separate. The first step in asset division entails identifying which assets you owned before and during your marriage. Separate properties are any assets a person gains before marriage and kept only in their name. You may not include separate properties in your divorce agreement.
On the other hand, marital properties are any assets acquired during the marriage. You must include these in your divorce settlement. You and your spouse will need to assess the value of each asset and agree on who gets to keep which assets.
Debt Division
Whether you like it or not, there is a good chance that any credit card, student, tax, personal, medical, automobile, and real estate debt acquired during the marriage is the responsibility of both spouses. It usually doesn’t matter who ran up the credit card bills or bought a new vehicle; you’re both responsible. You may agree to split your joint debts equally or that each person should pay the debts under their name individually.
Marital Home
The marital home is often the largest joint asset in a divorce case. If the house is owned by both parties and was purchased during the marriage, typically, both spouses are entitled to equal shares of the equity. There are pros and cons to keeping a house in a divorce, and it may not be financially feasible for either party. Some options you can choose from on how to handle your marital home include:
- Agreeing with your spouse to sell the house and sharing the proceeds equitably
- Buying out your spouse’s ownership and refinancing the mortgage
- One spouse moves out but continues to pay the mortgage
- Co-owning the house until a pre-determined date
What Makes Asset Division Complex?
It is common for most divorces to include a mortgage, checking and saving accounts, and other property. When couples can agree on dividing their assets and debts, reaching a settlement agreement can be reasonably quick. In other cases, divorce becomes more complex. Complex divorce cases often involve the division of:
- Multiple real estate holdings
- Vacation homes
- Pensions
- 401(k)s
- Royalties
- Deferred compensation plans
- Executive bonuses
- Co-mingled assets
- Professional degrees or licenses
- Businesses
- Recreational vehicles
- High-value art, jewelry, or other collections
No matter what type of assets you and your spouse each have or have acquired during your marriage, it is critical to hire a divorce attorney to help ensure that the equitable and fair division of assets occurs. You deserve to get the assets you are entitled to during the divorce process. An experienced divorce attorney can help guide you through the process and negotiate a settlement that protects your financial interests.
Call the Experts at Lecour Family Law Today
If you have been married for a significant length of time, asset and debt division can be complicated. The attorneys at Lecour Family Law can help you navigate complex and stressful family legal issues, including divorce, child custody, and child support. Call us today at 636-685-0440 to schedule a consultation. We pride ourselves on offering family legal services tailored to your specific needs.
Lecour Family Law is located at 1270 Jungermann Road in St. Peters, Missouri. We serve clients throughout St. Charles, O’Fallon, Troy, Warrenton, and St. Louis.