How to Negotiate the Best Possible Settlement Agreement

Want to negotiate a great divorce settlement agreement?

divorce judge with couple
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Maintaining your financial security will be one of your most important considerations when faced with divorce. Your main concern should be negotiating the best possible divorce settlement agreement. Before your separation and divorce, you, your spouse and your attorneys should get together and negotiate how marital assets are split.

Points to Consider When Negotiating a Divorce Settlement Agreement

Before your separation and divorce, you, your spouse and your attorneys should get together and negotiate how marital assets are split.

Retirement Plans

Due to the phased increase in normal Social Security, you may not be aware that you won’t be eligible for full benefits at age 64. You may actually be 67 before you receive your full Social Security benefits so if it is going to be a major source of your income this needs to be taken into consideration when negotiating a divorce settlement.

Also, if you will depend on drawing from your spouse's social security, you won't be able to do that until your spouse reaches full retirement age. If there is a great age difference this could also impact how much and when you will begin to draw social security.

In other words, when splitting retirement plans during divorce, don't view Social Security as a sure thing until you've reached the age of sixty-seven. 

Health Insurance

If you have children and access to health insurance courts will require you to carry coverage for your children. If neither party has health insurance the parent who is awarded custody should ask that the expense of insurance be factored into the amount of child support paid.

Also, under the Consolidated Omnibus Budget Reconciliation (COBRA), if your spouse’s employer has 20 or more employees they must allow the other spouse to have a policy with its health insurer for three years post-divorce.

College Tuition

If you have children most of their college expenses can be met by low-interest loans, financial aid, and part-time student jobs. There will, however, still be out of pocket expenses that need to be paid. It is in your best interest and your child’s best interest if these expenses are negotiated at the time of the initial settlement agreement.

You may think your child is too young to be concerned about college expenses but taking care of this issue, to begin with, will keep you from having to go back to court when the time comes for college. One other consideration, if one or the other parent has an income large enough to cover a child's college expenses, make sure that parent volunteers to pay those expenses. It will keep your child from one day graduating from college with a large amount of student debt. 

The Marital Home

Maintaining the lifestyle your children have become accustomed to is important. It’s one of the main considerations when trying to keep the marital home if you are the custodial parent. Not to mention that it can be a very valuable asset. It isn’t a liquid asset though and one should consider the expense of keeping the marital home.

Make sure you consider these expenses and whether or not you will be able to meet them before you take on the responsibility. You may be better off selling the home and walking away with a liquid asset that can be invested in a more affordable home.

Cost of Living Expenses

If you are the custodial parent, you will want to take into consideration the expenses of meeting your child’s daily needs. There are extracurricular activities at school that can become quite intense. If your child is in daycare, that expense should be considered. There is the cost of gas for transporting children to different activities. Some state courts allow these expenses to be negotiated into the amount of child support paid. When negotiating your divorce settlement think carefully about the effect such expenses will have on the lifestyle of you and your children.

Make sure any child support you receive is indicative of a fair split of these expenses between both parents. 

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