Financial Agreements for Divorce: Protecting your Assets
Divorce can be a stressful and emotional experience, especially when it comes to dividing assets. Deciding how to split finances and property can be one of the most contentious aspects of divorce, but it doesn`t have to be. By entering into a financial agreement, you can protect your assets and make the process smoother for everyone involved.
What is a Financial Agreement?
A financial agreement, sometimes called a separation agreement or a property settlement agreement, is a legally binding document that outlines the division of assets and liabilities between two parties in a divorce. This can include bank accounts, real estate, retirement accounts, and any other assets that may be subject to division. The agreement also includes a plan for how debts will be paid and how taxes will be handled.
Why Do You Need a Financial Agreement?
Divorce can be unpredictable, and emotions can run high. By entering into a financial agreement early on in the process, you can avoid prolonged legal battles and unexpected costs. A financial agreement also provides clarity and peace of mind, as both parties have a clear understanding of their financial obligations and rights.
What Should Be Included in a Financial Agreement?
The specifics of a financial agreement can vary depending on the individual circumstances of the divorce, but there are a few key elements that should be included:
1. Identification of Assets and Debts – All assets and debts that are subject to division should be identified in the agreement.
2. Property Division – The agreement should specify how property will be divided between the parties.
3. Spousal Support – If one party is entitled to spousal support, the agreement should outline the amount and duration of payments.
4. Child Support – If children are involved, the agreement should include provisions for child support payments.
5. Taxes – The agreement should specify how taxes will be handled, including who will be responsible for paying taxes on any assets that are sold or transferred.
6. Legal Fees – The agreement should outline how legal fees will be paid and by whom.
How to Create a Financial Agreement
A financial agreement should be drafted by a qualified attorney experienced in family law. Both parties should have their own attorney review the agreement and provide legal advice before signing. Once the agreement is signed, it becomes a legally binding contract.
Divorce can be a difficult and overwhelming experience, but entering into a financial agreement can help make the process smoother and more manageable. By outlining the division of assets and liabilities, you can protect your financial future and avoid prolonged legal battles. If you`re considering a divorce, talk to an attorney experienced in family law to learn more about financial agreements and how they can benefit you.