Benefits of Marital Settlement Agreements
How Marital Settlement Agreements can Make Divorce Work
Premarital Agreements and Marital Settlement Agreements are both contracts that govern how property will be divided and debts paid in the event of a separation or divorce. In many respects the difference between each type of agreement is timing. Premarital Agreements are contracts that are entered into prior to marriage. Marital Settlement Agreements are contracts that are entered into when a couple separates or divorces. Both types of agreements require full and fair disclosure of both parties’ assets and debts.
Premarital Agreements allow the couple to pre-plan for what will happen to the couple’s property and debts should they divorce at some later time. Premarital Agreements can be limited or be more inclusive. The Agreement may address property and debts that the couple had at the time before they are married or property accumulated after the marriage, future support, inheritance that each may receive after marriage, and divisions of a spouse’s estate in the event of death. If the parties do not sign a premarital agreement or if their premarital agreement only covers certain types of property or situations, then once married, the couple’s decisions about their financial situation and financial future are subject to the divorce law.
Advantages of Premarital Agreements
- Costs – If agreement is comprehensive and well planned and negotiated it can avoid future litigation costs if the marriage fails.
- Predictability of the Future- The future disbursements of assets and support are determined ahead of time.
- Financial impact of divorce is removed as a stressor of divorce -If each spouse is represented or can advocate for themselves they can plan their financial future even if the marriage dissolves.
Disadvantages of Premarital Agreements
- Costs- If one spouse is the poorer they may not have the funds to hire an attorney to review the agreement and advocate for their best interests.
- Predictability of the Future- No one has a crystal ball to determine what the future will actually be. Depending on how finances change and how each spouse’s health unfolds this may put one spouse at a huge disadvantage if the future was not what they expected.
- Financial impact of divorce is removed as stressor of divorce- If the financial future of divorce is predetermined a spouse may feel stuck in the marriage.
Marital Settlement Agreements
Marital Settlement Agreements are contracts that resolve all of the property, debt, and support issues that a couple faces at the time of separation or divorce. Rather than having the court decide the couple’s financial situation and financial future according to the law, the divorcing couple makes these decisions between themselves with the assistance of an attorney or mediator, and the attorney drafts the contract based on the couple’s agreed-upon terms and conditions for the agreement.
Advantages of Marital Settlement Agreements
- Clear Outline- Marital settlement agreements clearly outline all the terms and conditions in a comprehensive document that has been reviewed and signed by the parties and the attorneys. This allows everyone to have time to think through the terms and negotiate all aspects of the terms of settlement in a calm and methodical fashion. This is better than having a settlement read onto the court record after a heated court appearance where points may be forgotten or parties are not clear about all the nuances of the terms to which they are actually agreeing.
- Costs – Attorney costs are lessened if the parties come to terms in a written agreement rather than wasting time just waiting to have their cases heard in court in order to find resolution.
- Long term- Parties may feel more satisfied and secure in the decisions they have made in negotiating a written agreement. They will have had more time to discuss the terms with their attorney in a calm fashion and have more time to reflect on the long term effects of their agreement.
Disadvantages of Marital Settlement Agreements
- Time to change their mind- Parties may agree to terms on the court house steps but upon reflection change their minds as pen goes to paper. Therefore sometimes it is best to have the key points agreed upon be put on the record to secure the main points of agreement.
- Costs- Attorneys still can spend a lot of time going back and forth on the finer points of an agreement without finding resolution like they would if their feet were put to the fire in the courthouse.
- Long term- Some parties may feel that they caved to the pressures of making a written agreement rather than having the court hear their side in order to vindicate their position.
Want to Know More?
If you are interested in a consultation to discuss the options available to resolve your divorce, custody issues, support, or equitable distribution issues, please contact me and I can help you investigate your options. Call me, Lenore M.J. Myers, at 215-470-3121 or email me at email@example.com.