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What You Didn’t Know About Divorce Settlements

What You Didn't Know About Divorce Settlements

There are many ways that couples can reach a divorce settlement agreement. In some cases, a court hearing is necessary in order for couples to reach a divorce settlement agreement. In fact, court intervention generally requires temporary orders on issues such as child support, because a final order can take years to come to a resolution. 
Court ordered divorce settlements, and even temporary court orders, are very difficult to amend, except in extreme circumstance such as long term illness for either a parent or a child. Many couples also enter into a divorce settlement agreement in the absence of court intervention. Couples sometimes handle the process entirely on their own, while others utilize the services of a collaborative divorce attorney. 
However, those couples are still generally required to have the courts approve their divorce settlements, especially when children are involved. In fact, all divorce settlements are legally binding and will be enforced equally by the courts and law enforcement should it become necessary.
Divorce settlements include a final court order for distribution of marital property and assets. In some cases, couples split the assets according to a percentage. In other cases, the judge will list specific ownership of all property and assets. In addition, the judge will determine which spouse is responsible for any shared debt.  Divorce settlements also contain clauses that pertain to an spousal support payments. 
Those requirements will include the amount of support awarded, on what day the payment is due and for what length of time payments must be made.  Divorce settlement agreements will also contain all rulings made on child related issues. Those issues include child support, child custody and visitation rights. In fact, those clauses will be extremely specific in order to avoid any confusion. It will in fact, state specific times for pick up of children, and exact times that they must be returned to the other parent. 
In addition, parents may only be allowed to travel a certain distance with their children unless they obtain court approval. For example, parents may not be able to leave the state with their children unless the courts have decided they are allowed to do so. 
Some couples are able to come to an agreement on all of these issues, in the absence of court intervention. While it appears overwhelming at first glance, many couples find that they can avoid litigation by taking part in collaborative family law. However, their divorce settlement agreement will still contain all of the same clauses and must be approved by the court.
Divorce agreements help individuals to be very clear about issues and court decisions that pertain to divorce. In fact, the agreements can help couples to avoid any questions as to distribution of property and assets. In fact, divorce settlement agreements are likely to remain unchanged and can be referenced if any questions should arise while the agreement remains valid.
In some cases, the agreement becomes null and void at a certain pint. For example, when children graduate high school, or on their 18th birthday, they may be allowed to visit either parent at will. In any case, divorce settlement agreements are legally binding and will be legally upheld should either spouse act in opposition of the agreement.

A Look Into Court’s Role In Divorce Settlement

A Look Into Court's Role In Divorce Settlement

Divorce are court ordered and court approved that come as a result of divorce. Included in those documents, is a divorce property settlement which makes allocations for distribution of all marital property between spouses and possibly their . State laws differ on the manner in which divorce property settlements are allocated and generally, settlements are very state specific in allocation and in language. 
Some states handle marital property as joint property and it is distributed equally between the two individuals getting divorced. Whereas, other states distribute property based on other factors, such as the grounds for divorce between the couple. Each state has its own laws regarding divorce and the appropriate distribution of property. Yet, in some cases, couples mutually choose the most fair manner in which to achieve a divorce property settlement. In that case, the courts simply approve the couples divorce settlement and helps to enforce it, should an individual be found in non compliance with the divorce settlement.
For couples that are unable to come to an agreement on their own, judges make all determinations for their divorce property settlement as to avoid continued conflict among the couple. Divorce property settlements may be utilized as a separate document from the settlement that makes determinations regarding any involved children. 
In fact, childless couples only require a divorce property settlement since their are no other issues at hand. Issues of spousal support can also be handled in those divorce property settlements, as assets and salary are considered marital property. For couples that require court intervention, judges will make all determinations as to the details contained within each clause. 
However, judges are likely to take testimony and evidence into consideration when making those determinations. While some state divorce laws are very specific, judges still generally have some discretion when making decisions. In cases where the for the involves a spouse being accused of violating the marriage contract, the judge may decide to allocate a higher percentage of the marital property to the ‘innocent spouse’. For example, a spouse that committed adultery, may be required to pay a higher percentage of spousal support, depending on the individual state’s divorce laws.
Divorce property settlements take many factors into account. In some cases, couples are able to make determinations on their own and divide all marital property in a mutually beneficial way. In other cases, a judge makes all determinations for each clause contained within the agreement. In either case, a judge approves the final divorce settlement before it goes into effect. Court approval is generally a speedy process. 
Whereas court intervention in divorces, generally drags out the process and it can also be much more costly to couples. In addition to the added costs of lawyers fees, the couple may find that they are unhappy with the judges determination. Ironically, couples that require court intervention often find that the cost of the divorce process dwarfs the actual value of marital property that was in dispute.

Divorce Settlement Inherent Difficulty

Divorce Settlement Inherent Difficulty

One major factor many individuals forget to consider when devising their divorce settlements is the liquidity of certain assets. For example a checking account with any amount of funds is extremely liquid, meaning it can be quickly converted to cash on hand as need be. On the other hand something like a house is generally non-liquid considering the conversion to cash would be a lengthy or expensive endeavor. 
Another major problem when considering a fair divorce settlement is the effect of capital gains. Capital gains refers to the positive change in value on certain possessions. After the divorce settlement is devised, the individual that receives an asset. For example, a house or a car, will be taxed on any capital gains; many will relinquish the possession of the house for this reason bringing the other to face taxes they did not expect when originally creating the divorce settlement. 
Among several other important situations to consider when making divorce settlements in the proper execution of an Independent Retirement Account (IRA). Oftentimes, this will need to be split in a divorce settlement. The transfer of these funds to a non-IRA or special account made for transfer to an ex-spouse the original transfer will be taxed heavily bringing the expected amount from the divorce settlement notably lower. 
A final consideration is the availability of hidden assets and many couples break up from mistrust and this fact does not end with the decision to divorce. If a settlement fails to recognize any hidden assets and they are discovered at a later date, the divorce settlement will not change.
Divorce settlements aim to split all assets and funds evenly between the two parties. Individuals engaged in a marriage generally fail to imagine the possibility of divorce and try to work hand in hand on things in non-recognition of future divorce settlements that will boil everything down into dollars and cents.