Tips for dividing property during a divorce
Every divorce has unique factors, but nearly all divorces involve issues concerning property division. Although division of assets is one of the biggest sources of disagreement in divorce property settlements, the vast majority of divorcing spouses are able to reach a compromise outside of court.
In general, parties are more likely to be satisfied with their property settlement if they can achieve resolution through negotiation rather than by litigation, but there are instances where litigation is necessary. If the parties cannot reach an agreement then a judge will decide how to divide the assets. However, no one knows their financial needs and how best to meet them better than the individuals involved, so it is important to see if an agreement can be reached before litigating. Here are some negotiation guidelines that can help divorcing spouses agree on a property settlement without litigation.
Preparing for negotiation
Understand the state's property laws. Each state has its own unique set of laws governing property division in divorce. Meeting with an attorney who is an expert in the field of family law can help you gain an understanding of the relevant law. Understanding the legal entitlement to property and obligations for debt, if any, will help to ensure that the division is fair when negotiating.
Comprehend the entirety of the marital estate.You can't begin negotiation until there is a full understanding of all the components of the marital estate. If the assets and values have not yet been identified, this information can be gained through discovery (a legal tool to procure information). Both parties will be compelled to provide all relevant financial information so that a complete picture of the marital estate is established. You and your spouse may need to hire professional appraisers to determine the value of certain assets such as real estate or a business. Once all assets are disclosed and valued then you are ready to start discussing possible divorce settlements.
Define the financial needs. Major components of financial need include: income, earning capacity, age, health, number of children, retirement plans, etc. You should also consider what your future needs, i.e. health insurance, housing, etc.
Traditional divorce negotiation.Negotiating a divorce settlement usually involves each spouse's attorney. This is the most effective way of reaching a settlement because the attorneys usually have the expertise to understand what each spouse could gain or lose if they were to litigate, and can give their clients proper guidance to reach the best outcome. The mechanics of the negotiation can include one or more face to face meetings. It can also include communication through correspondence or conversation between counsel. Each side presents their respective position and negotiates until an agreement is achieved.
Divorce mediation.This is a non-adversarial, non-binding process where a third party assists in helping a divorcing couple reach resolution. Mediation works best when the assets of the marital estate are relatively simple (i.e., a house and pension) and you and your spouse are able to communicate and work together. Often, each spouse hires their own attorney to consult and review any proposed agreement.
Collaborative divorce.This is a relatively new process where both parties sign an agreement with attorneys specializing in the collaborative process which commits them to reaching a settlement. As part of the collaborative team, the parties may use experts or specialists to help them reach a mutual agreement. If a settlement is not reached then the lawyers who are assisting with the collaborative process withdraw from the subsequent litigation, and the parties select new counsel to represent them.
If you are successful in using these tools to reach divorce settlement, the terms of this agreement should be documented in a written agreement which is a binding contract that each person must abide. It is important that you negotiate this agreement thoroughly and seriously because once it is done, for the most part, it cannot be reopened.