To save time (and money), you and your soon-to-be-ex can work out your own property agreement and submit it to the court for approval.
In order for this to work, you’ll both have to agree to be honest and forthcoming with any and all assets, even separate bank accounts and other items of value. You’ll also need to agree to work out any disputes in a civilized and mature fashion – if you can’t do this, you’re agreement isn’t going to get very far.
To draft the property settlement, you’ll need to do the following things:
List Your Marital Assets
Start with the big and obvious stuff – i.e., thehouse, the cars and your various furnishings. Then start thinking about the smaller things or the items that might not be so obvious. Again, this includes that separate bank account, even if your spouse doesn’t know it exists, as well as retirement accounts and stocks that you may own. Full disclosure of all assets (jointly and individually titled) will be required by the court during the divorce process anyway. If assets are hidden by one spouse, the other spouse can ultimately claim fraud and have the entire property distribution set aside by the court.
List Your Separate Property
While separate property isn’t considered part of the marital estate, you’ll still need to disclose it. In some states, the court can consider what non-marital property each party has when determining an equitable distribution of the marital property. You should know how the court will consider your property before trying to come to an agreement. Your agreement should also list the separate property so that you are sure that the divorce decree ultimately designates it as separate.
Value Your Assets
As best you can, you and your spouse need to put a value on all of your marital assets (separate property excluded). You can consult a third party appraiser if need be, such as a realtor, CPA or other professional who has experience with the property in question. You’ll also want to include any amounts still owed on the items so that the value can be balanced with the debt.
Divide The Property
Once you’ve established the contents of your marital estate and its value, you’ll want to sit down and divide things up. Be as logical and as reasonable as possible – you won’t get to keep everything so let that idea go and do your best to be fair. Some items may be able to be split up – such as a CD collection or your various antiques. Other items however can’t physically be split so you’ll need to “trade-off” the value or liquidate the asset and divide the proceeds. For example, if one spouse gets to keep a piece of art worth $2,000 then find something (or some things) that are close in value for the other spouse to keep. You may find as you go through the list that you want to trade items as you go and that’s fine – remember, this is a negotiation and nothing’s final until the court signs off.
Follow The Same Procedure With Your Debts
Just as you did with your assets, list your debts and their values and then try to separate them out. Again, you may find that you want to trade items and/or debts as you go through the list and this is completely acceptable as long as the overall agreement is substantially fair. One spouse may want to keep the plasma television for example and the other spouse might agree as long as the unpaid balance for the television goes with it.
Submit Your Agreement to the Court
Courts will typically approve any agreement you come up with as long as it is fair and not overtly “lopsided”. In addition, the court will want to see that both you and your spouse have legal representation and/or that you both voluntarily agree to the contract you’ve drafted. This is to prevent one party from taking advantage of the other, specifically when that party has no legal representation to stand up for his or her interests.
In cases where the judge feels that the agreement is substantially biased, your property settlement may be modified by the court or denied completely so it is in your best interest to come up with something that’s fair for everyone involved.