Why is the marital settlement agreement so important?

The marital settlement agreement is a legal contract between you and your soon-to-be ex-spouse regarding property division and other divorce related issues like spousal support and child support obligations, custody and visitation arrangements. This agreement is also known as a stipulation of settlement. It needs to be filed with the court and will become part of your divorce judgment.

Why is the marital settlement agreement so important?

Going through the divorce is always a stressful experience. If you are lucky to be on the same page with your spouse about ending your marriage though, you can limit it quite a bit. The way to do it is by agreeing on all the terms of the divorce and then signing a carefully written marital settlement agreement ahead of time. This way you can avoid the need of appearances in front of the court.
If the court sees that you and your spouse agreed on all the issues related to your specific situation it might decide that no trial is necessary and this way you will save time and money.
It’s important to remember that a signed marital settlement agreement is a valid and enforceable contract. Therefore, after court issues a judgment of divorce that includes a marital settlement agreement, the matter is usually final, and the divorce may not be challenged

The necessary parts of the marital settlement agreement

What needs to be encompassed by the settlement agreement depends on your particular situation. If you, for example, have no minor children, the marital settlement agreement will consist of fewer provisions than if you have such children. Preliminary information and division of property will always have to be a part of it. Provisions related to support of minor children cannot be omitted either because the issues of child custody, visitation and support must be considered by the court and the court is obligated by the New York law to consider what is in the best interest of such minor child.

Preliminary information
While writing the settlement agreement you should start with stating all preliminary information – the names of the parties, residential address, date of the marriage, date of separation (if already occurred), and information about children to the marriage.
Provisions about the good faith of both parties and complete disclosure of financial and property matters are important as well.

Distribution of property
In some cases in which property and debts might not exist or be insignificant you can omit this part and write a statement to that effect (e.g. Both parties agree that their marital property and debts are minimal/non-existent and that they have already divided it to their satisfaction.)

However, most likely during your marriage, you have accumulated property or debts. If so, in this section write down how they should be divided. You might want to categorize all your assets and debts in the following groups:

  1. Distribution of real property
    In this section provide information about your and your spouse’s place of residence, what should happen to your family residence (house, apartment that you both own), how the rights, responsibilities, and expenses as to the family residence should be divided (who should own it, who will cover mortgage, maintenance and other expenses).
  2. Distribution of personal assets
    Here you may include household goods, automobiles, and other personal property.
  3. Distribution of funds on the bank accounts
    List of all the funds, bank accounts and the way you want to divide them should be included in this section.
  4. Distribution of debts
    Listing of all the debts is as important as a listing of all the assets. Division of the debts might be a difficult task but is worth doing very precisely. It is a good idea to finish this section with a statement that from the date of signing of this settlement agreement neither party shall assume any joint debt or liability and both parties will be individually responsible for all debts acquired after signing this agreement.
  5. Distribution of life insurance benefits
    If you and your spouse acquired life insurance policies, then besides listing them, it is important to decide who should be named as the beneficiary of particular life insurance policy.

You may also consider adding following categories:

  • Distribution of tax liabilities
  • Distribution of medical insurance and health expenses
  • Distribution of retirement accounts

Maintenance (spousal support)
Maintenance, which is also called spousal support or alimony, is money that one spouse pays the other during and/or after a divorce. Maintenance is paid to ensure that supported spouses continue to live the same or a similar lifestyle as they did while they were married. It is also a way to give time to gain skills or training necessary to become “self-sufficient” (meaning that they can support themselves financially).
If you pay such spousal support to each other, it is a good idea to put it in writing in the marital settlement agreement as well.

Signed and dated
As all legally binding contracts, the marital settlement agreement must be dated and signed by both parties.

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Timeframe and costs in an uncontested divorce

An uncontested divorce will definitely save you time and money. Attorney’s fees are always lower for an uncontested divorce than for a contested one (starting as low as $99 to as high as $1,200). Simple reason is that there is much less paperwork and time commitment for this proceeding.

As to the timeframe, on average an uncontested divorce in New York State lasts about 3 months, whereas a contested one lasts about 9 months to a year. Of course, different cases can differ in duration for a variety of reasons.

When can a marital settlement agreement be challenged?

As mentioned before, after the court issues a judgment of divorce that includes a marital settlement agreement, the matter is usually final and the divorce may not be easily challenged.

There are limited circumstances under which you could challenge the validity of a divorce judgment that includes a marital settlement agreement. Generally, the court will not decide that a marital settlement agreement is invalid when such agreement has been negotiated and both parties are represented by counsel.

Fraud and mutual mistake are the reasons that you may use to challenge the marital settlement agreement. You have to keep in mind that they are difficult to prove.

Fraud
When filing for divorce, both spouses must fill out a Sworn Statement of Net Worth, which is a financial disclosure statement. If there are any hidden or not entirely disclosed property or assets the judge might refuse to enforce a marital settlement agreement.

Mutual mistake
The judge might also choose not to enforce a settlement agreement if you and your spouse believed you had signed a document that dealt will all of your assets, but you both did not know that some property or assets were not listed in the agreement. If you wish, you can also correct your mistake by signing an amendment to your marital settlement agreement.

Best way to start constructing a marital settlement agreement

Marital settlement agreement is a legal document that should meet formal requirements and should either be prepared by a lawyer or follow a good template. Before you create this formal document however, you should think about the main contents first.
The most important items in your marital settlement agreement are property division and agreement on the spousal support, if necessary. You need to find the way to agree on the details with your soon-to-be ex-spouse.
If you find it emotionally challenging or otherwise difficult to meet and talk about these things, you may want to try the online method of communication. The specialized service for such negotiations is Agreemount.com. You should start with collecting property items, mark them as separate or marital property, and propose to the other side a method of their division. At Agreemount.com you can have a complete on-line negotiation, at the time convenient for you, without meeting each other even calling each other. At any moment, you have clear summary of the financial consequences of your decisions.
After the negotiation, the agreed property division can be automatically put into the legal form