What is a Divorce Settlement Agreement?

The settlement agreement is a crucial part of your divorce case. Consider it's details carefully.

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Gavel and Scales

A divorce settlement agreement is a written document that goes by many names, depending on where you live. It can be referred to as any of the following:

    Divorce Settlement Agreement
    Separation Agreement or Separation and Property Settlement Agreement
    Custody, Support ,and Property Agreement
    Mediated Separation Agreement
    Collaborative Settlement Agreement
    Property Settlement Agreement (PSA), and
    Marital Settlement Agreement (MSA).

What you call it doesn’t really matter. The purpose of a divorce settlement agreement is to memorialize any agreements reached between divorcing (or separating) spouses as to child custody, child support, alimony (also referred to as “spousal support” or “maintenance”), and the division of property. For purposes of this article, we’ll refer to it as a “Divorce Agreement” or just plain “agreement.”

Do We Need to Enter into an Agreement Before We Separate?

No. You may enter into a divorce settlement agreement before or after you separate or file for divorce. Or, you may not be able to reach an agreement until the morning of your divorce trial – right “on the courthouse steps,” as the saying goes. However, the sooner you settle your case the better, especially if the goal is to avoid unnecessary turmoil and attorney’s fees.

Do I Need an Attorney to Prepare the Divorce Agreement?

It’s highly recommended that you hire a lawyer to prepare your Divorce Agreement. Or, if your spouse’s attorney has already prepared it, you should hire an attorney to review it (on your behalf) and make sure important legal provisions are added, deleted, or corrected in order to protect your rights.

Phrases such as “sole legal custody,” “exclusive possession,” “timely indemnify and hold harmless,” and “relinquish and waive all future claims” actually have very important meanings. You’re not a lawyer, so you may miss serious problems with the proposed agreement, or may not know what specific words must be included to protect your interests. If you fail to catch something, you may end up losing important rights. The smart thing to do is to pay someone in the beginning to make sure you don’t pay even more in the end.

What if We Settle Everything Before Going to Court?

If you settle everything before taking your divorce case to court, an attorney or mediator can draw up an agreement. Once signed, the Divorce Agreement becomes a binding contract, which means both spouses are obligated to follow its terms.

Depending on your state’s laws, the agreement may be submitted to a judge that can make sure the terms are fair. It will then be incorporated into your final divorce decree and become a binding court order; if either of you violates the order later on, you could be held in contempt of a court.

If you and your spouse can’t agree, you’ll probably end up in court, where you’ll have to put on your case and ask a judge to decide all issues for you. Because this process is unpredictable, and often very expensive, reaching an agreement outside of court is the preferable way to go.

What if I Don’t Like My Spouse’s Proposed Divorce Agreement?

Don’t sign it. Remember, it’s just a proposal – a starting point in the negotiation. Even if your spouse (or your spouse’s attorney) gave you a deadline to respond, you still don’t have to do anything. You can throw the proposal in the trash if you want to. No one can force you to settle until you’re ready.

But there is such a thing as waiting too long. If you refuse to negotiate in good faith, or you won’t sign anything because you want to keep milking your spouse’s generosity for as long as possible, your spouse will become frustrated, and may pull out of the settlement negotiations altogether. If you really want to settle, you need to be willing to move forward and compromise.

As stated above, it’s wise to ask an attorney to review your spouse’s proposed Divorce Agreement. If you don’t like it, an attorney can help you understand how far apart you are, and negotiate a better deal on your behalf.

If I Like My Spouse’s Proposed Divorce Agreement, Should I Just Sign it?

No. Even if you are completely ready to move forward with a settlement, if your spouse’s attorney prepared the first draft, it’s vital that you at least have the agreement reviewed by your own attorney – someone who’s working to protect your interests. You should do this no matter how much pressure is put on you to sign and no matter how much you want to “keep it simple” without “getting all the lawyers involved.”

It’s important to remember that your spouse’s attorney does not represent you and doesn’t care whether the agreement is fair or provides you with adequate financial resources.

If My Spouse and I Agree, Can We Write our own Agreement?

This is usually a bad idea. Most likely, the agreement will not be specific as to your state’s laws and may miss important legal provisions. It might be vague or unclear. If so, and you and your spouse disagree on a provision later, you may end up spending more money on attorneys, trying to fix or clarify the agreement.  It’s probably worth a few hours of an attorney’s time to get a good agreement in place.

If My Spouse and I Agree on Everything, Can We Just Hire One Attorney to Draft our Divorce Agreement?

You could do this, but it’s not recommended.  First of all, one attorney cannot represent both spouses. So, if you proceed without an attorney, you won’t have anyone looking out for your interests. If your spouse proceeds without an attorney, he or she may be able to claim later that the agreement is unfair, or that they didn’t know what they were signing because they didn’t have an attorney involved.

If you and your spouse truly agree on all issues in your divorce, your best bet is to participate in divorce mediation, which is a process involving a neutral, third-party mediator (usually a family law attorney trained in mediation). The mediator works with both spouses to help them form and finalize an agreement.  Often, the mediator will draft the Divorce Agreement, and then the spouses can ask their individual reviewing attorneys to take a second look.

What if We Both Decide not to Follow the Divorce Agreement We Signed?

The world won’t stop spinning, and you won’t be arrested.  For example, if you and your spouse both decide to follow a different alimony payment schedule, that’s completely up to you. But be very clear. If you decide to do anything other than what you agreed to do in writing, and then have a falling out with your ex-spouse, you each have the right to enforce the terms of the original Divorce Agreement. This is true regardless of any verbal agreement to do otherwise.

If you both agree to change some of the more substantial terms of your original Divorce Agreement, you should make it official by modifying (changing) the old agreement in writing.  

Can We Modify (Change) our Divorce Agreement?

Yes. Provisions regarding property, debt, and almost all other financial matters are usually considered to be carved in stone, unless you both agree to a change. If so, you can enter into a “Modification Agreement,” memorializing the agreed-upon changes. This modified Divorce Agreement should then be incorporated into a new court order.

Child support, custody, and visitation agreements are modifiable as long as you can show a significant change in circumstances occurred after entry of the original order, and/or that a new arrangement is in the best interests of the child.

Alimony provisions may or may not be modifiable, depending upon the wording of your original Divorce Agreement. Make sure the terms of your original agreement are very clear as to whether any spousal support obligation will be modifiable, or non-modifiable.

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