Getting a divorce is never an enjoyable experience. Even the most amicable separation leads to arguments about who gets what property, where the children will live, and who has to pay the bills.
Having a checklist of things you need is always a big help. Plan carefully and get your documents in order before sitting down with your spouse and your attorney, and you can minimize the pain for everyone.
So, what should this checklist include? Below you will find everything you need to know—including an infographic you can print and use at your convenience.
Key Takeaways
- Children are a separate part of your divorce agreement. Make your other discussions without the kids in mind.
- Finances include your business. Don’t forget your side hustle if you have one.
- Property division may mean buyouts.
What Is a Divorce Settlement?
Your divorce settlement is the agreement between you and your soon-to-be ex-spouse outlining how your property will be divided, visitation and custody arrangements, support agreements, and any other decisions you have made between you.
The key elements of a divorce settlement:
Having a divorce settlement helps outline everything that needs to be discussed and included in the divorce decree so that nothing gets overlooked or forgotten. The judge only knows what couples reveal in court filings, so the more detailed the settlement agreement, the more comprehensive the final decree can be.
With this basic blueprint, we can go deeper into what should be included in a divorce settlement checklist.
Divorce Checklist [INFOGRAPHIC]
What to Include in a Divorce Settlement Checklist
Whether you can sit down with your spouse or need to do this with your attorney, your best approach is to review your household and financial status logically. This is an emotional time, but you must take a thoughtful approach to the process.
Children
If you have minor children, they should always come first in your divorce checklist. Judges always consider “the best interest of the child” in making any divorce or separation decision, so all division of property and support decisions will be based on your child’s welfare.
Things to keep in mind for your checklist:
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Custody. Custody is determined by the amount of time generally, by the number of nights a child spends with each parent. There are two types of custody in a divorce, legal and physical.
- Legal refers to who can make the child’s education, medical, and legal decisions. Legal custody is usually joint (split equally between both parents).
- Physical means who the child spends the most time with. Even in a 50/50 custody situation, the parent who has even one more hour than the other will have “primary custody” for legal purposes and may receive child support payments to cover extracurricular activities or other childcare expenses.
- Visitation. This refers to the allocated time the children spend with the non-custodial parent. The most common visitation schedule is visitation with the non-custodial parent every other weekend and six weeks in the summer. Consider transportation from one place to another and where the custody exchanges will occur. Finding a midway point between both of the parent’s homes is a common approach.
- Holidays and vacations. In a standard custody agreement, parents alternate holidays every year. If either parent has a strong preference for a particular holiday (such as Christmas or summer vacation), it must be noted before the visitation schedule is put into the divorce decree. If the parents reside in different towns or states, travel plans need to be arranged and included in the decree.
Wise parents will make allowances for children growing up and growing apart from the family in the divorce decree. Teenagers often find it difficult to adhere to the visitation schedule, and traveling to court to modify visitation because a parent insists on their visitation rights almost guarantees family estrangement. Remember that your 8-year-old angel will be a 13-year-old tiger someday.
Our Parenting Plan template easily outlines expectations and responsibilities during a divorce settlement.
Real Property
Real property includes your marital home and any land or timeshares you may have purchased during your marriage. Depending on where you live, the property division may be community or equitable.
- In a community property state, all marital property (property acquired during the marriage or paid for with marital funds) is divided equally, 50-50. If your house was purchased by you and your spouse, either one of you can be awarded the real property and must take responsibility for any associated costs and refinance any mortgages.
There is not always a “buyout” where money is exchanged for one party to be awarded the home. Sometimes debts and assets can be allocated in certain ways for the spouse not getting the property to account for any equity, sweat equity or money, invested in the property by that spouse. The goal is that the spouses’ share is equal.
- In an equitable division state, marital property is shared out “equitably,” that is, rather than splitting everything 50/50, in an equitable division state, the court will look at each party’s current situation and future needs. In equitable division states, the court won’t just divide marital property equally. If the house is worth $150,000, but there is a truck and a boat with equal value or not, one party may opt to keep the house, and the other may keep the vehicles.
Deciding how to dispose of real property before the divorce hearing is important because the judge is otherwise bound by the law to make the disposition accordingly. If you and your spouse decide you will keep the marital home so the children can stay in their school district, that becomes an important part of your settlement agreement.
Other things to remember:
- In most states, real property is deeded to couples “as tenants in the entirety,” a somewhat old-fashioned term for a married couple. If one of you is to keep the property, it will need to be re-titled in that person’s name to formalize the transfer of ownership.
- Even if the property is held in one person’s name, improvements, remodels, and increases in value during the marriage become part of the marital property and can be considered in a divorce. It is important to have the house appraised before the divorce.
If you or your spouse have extensive property or property in another state, you should consider having an attorney handle your property division during your divorce.
Personal Property
Personal property is anything that is not real property. Like real property, anything acquired during the marriage, with some important exceptions, is considered marital property and subject to division according to your state’s rules.
Division of personal property can be even more acrimonious than the division of real estate or who has the kids on the weekends. People will argue for days over who gets Aunt Lydia’s silver tea service that she gave them at their anniversary party. When dividing personal property, consider the following listed points:
- Gifts, bequests, and inheritances are not considered marital property. A gift from your parent to your spouse is not marital property, it is your spouse’s property.
- In most cases, gifts between spouses are considered gifts to the person and are not marital property.
- Personal property acquired before the marriage but utilized during the marriage for the benefit of the marriage may lose its separate property designation and become marital property.
Personal items, items purchased with one’s own money, and items of sentimental value are usually not considered marital property.
Financial Information
Financial information includes joint and separate bank accounts. It also includes any income, retirement plans, pension plans, stock options or bonuses, 401(k) plans, and any other money you and your spouse may have through work.
Financial information may also include tax information, such as past taxes and deductions, future tax breaks, and other accounting information. Your financial information includes potential settlements from personal injury cases or class actions.
In contested divorces, there is a tendency to want to hide this data, thinking your spouse does not deserve any of your hard-earned money. It may be difficult even to account for all the money for high-end cases requiring forensic accountants and expert testimony. Nonetheless, full disclosure is required when it comes to your finances.
- According to your state’s child support division laws, child support is calculated based on the gross earnings of the parent or parents. Hiding funds only serves to cheat your child and makes the family law judge angry.
- Financial information calculates the division of other property, debts, and assets.
- Divorce settlement agreements are signed under penalty of perjury, and fraudulent statements can cause a party to be faced with a reprimand from the judge, that money is awarded to the non-offending spouse, or being found criminally guilty of perjury.
Credit Report
Some states may request a credit report. Others may be satisfied with your financial disclosures. If your credit report is pulled, you should include both your Experian and TransUnion reports.
Having your credit report available ensures that your asset and debt statement is complete and verified. You should be sure there are no red flags on your report before submitting it to the court.
Debt Information
In most states, debts are allocated to the party who acquired them. For instance, your credit card debt is given to you, and your spouse’s credit card debt is given to them. Student loans and most healthcare debt are the responsibility of the person who obtained them.
Only debts with both parties’ names or which were obtained to enrich the marital property must be apportioned during the divorce. If both of your names are on the home loan or mortgage, both of you will continue to be responsible for that debt.
Things to keep in mind when you’re assembling your debt documents:
- Digital credit card records usually go back a certain number of years, but they’re not eternal. Most companies have a 15 or 20-year cutoff. Long-term marriages may not be able to obtain records past that date.
- Courts want to see both sets of records. Just because your spouse has a copy of the joint Visa or Mastercard bank account does not relieve you of producing a copy.
- You must produce all debt records, no matter how much or how little you owe.
Business Records
This section only applies if you or your spouse have a separate business during the marriage. Business records are not employment records. If you have a business, you can ask your accountant to assemble the necessary records for your divorce. You should consider getting one for the divorce proceedings if you don’t have an accountant.
Business income and losses are usually considered the separate property of the business owner unless you and your spouse were active participants in the daily operation of the business. If you just owned the business and drew a passive income, that money may be your separate property.
However, if you went daily to your business, worked there regularly, managed your employees, and behaved as an employee, your income may be considered marital property.
Other things to consider:
- If any marital assets were spent on improving the business, then any profits related to those improvements may be considered marital property.
- If any part of the business was operated out of the home, then the house may be considered business property and subject to rent or division as marital property.
If you or your spouse own a business, you should consider having an attorney handle the divorce agreement. The crossover of family and business law is tricky and should be managed by an expert.
Estate Planning Documents
You may have already completed estate planning, including wills, trusts, and powers of attorney. However, it also includes:
- Retirement plans
- Pension plans
- Living will and end-of-life plans
- Health insurance
- Life insurance
Depending on the nature of the policy or plan, beneficiaries may not be changed by a divorce or cannot be changed at all. Spouses are entitled to the portion of the retirement funds that accrued during the marriage, even if it does not vest until after the employee retires or dies. Life insurance policies will only change the beneficiaries with written instructions from the payor to the policyholder.
If you have any of these policies, a specialized document called a Qualified Domestic Relations Order, or “QDRO” (pronounced “quadro”), may need to be appended to the divorce decree. In order to collect court-ordered benefits, sometimes employers require that their own forms be executed, rather than a QDRO, for policies or plans that the employer provides. This order allows the retirement or pension plan to pay out the benefit to the spouse or child as calculated by the court. If you need a QDRO, your attorney will probably recommend an attorney specializing in writing them since they’re very complicated.
Other things to think about:
- Powers of attorney, living wills, and healthcare directives must be changed as soon as you are divorced. Hospitals and courts will only contact the person on the document, even if it is your former spouse.
- Wills and trusts must have codicils or be amended to remove your spouse if that is your desire. Otherwise, your spouse will remain as a beneficiary of your estate if you have already appointed them in that capacity. If you do not have a will in place, your property will pass in accordance with the succession laws of your state.
Alimony or Spousal Support
Not all states have alimony or spousal support. Each state has its own requirements for the duration of the marriage, the status of the spouse, and the purpose of support.
In general, alimony is:
- Paid by the higher-earning spouse to the lower-earning spouse;
- When that spouse is unable to earn a reasonable wage due to lengthy unemployment in the marriage;
- Based on the marital standard of living;
- And additional factors such as property division, asset/debt ratio, custody agreements, earning capacity, length of the marriage, etc.
In addition, courts have the discretion to award alimony or support based on need or domestic violence or according to calculations required by their state. All states award alimony on a limited basis except in very rare instances of age or disability.
If you have agreed to a support payment outside the state’s alimony requirement, you should add all the necessary information in your divorce agreement and have your attorney review it for legality. The judge will probably accept it but bear in mind that if your state does not have alimony requirements, the judge can reject it.
Legal Issues
A divorce settlement is a legal document, so it should conform to your state’s legal requirements. At a minimum:
- It should be signed and dated by you and your spouse.
- Both signatures should be notarized.
- You and your spouse should have it independently reviewed by your own attorneys.
- You must provide copies to the judge and to the attorneys on the day of the hearing.
- If you and your spouse are not communicating, you should have the document served on the other attorney before the hearing.
In contested divorces where the parties are angry with each other, settlement agreements fall apart because after doing all the work, one side failed to send a copy to the other because “they signed it, they had it!” The best way to get a divorce finalized is to do everything by the legal book, even if it sometimes makes no sense.
Legal Documents to Prepare
What to have in front of you when assembling your divorce settlement agreement:
- A calendar with holiday and school schedules
- Deeds, mortgages, notes, and property transfers
- Auto titles, boat titles, bank loans, applications
- 12 months’ bank statements.
- 3 months’ paycheck stubs.
- IRA, pension plan, retirement plan, etc., most recent statements.
- Most recent credit card statements.
- 3 months’ utility bills.
- 3 years tax returns (5 years for businesses)
- Copies of wills, trusts, powers of attorney, living wills, healthcare directives, etc. (even if your spouse’s name is not on them)
- Paper and pencil
How Legal Templates Can Help You
This is not as terrifying as it seems. Once you have all your paperwork in place, filling out the documents can be a snap. Using a divorce agreement template can simplify at least some of the paperwork for you—all you need to do is fill in the blanks. Just follow our instructions, and you will be one step closer to finalizing your divorce.