I often have clients ask me how they can lock in an agreement with their spouse regarding how to divide up their assets in an impending divorce. Most times these clients have not yet filed for divorce. In such cases, the answer is to execute a marital settlement agreement. Marital settlement agreements can also be used in the collaborative divorce process to formalize an agreement between spouses prior to finalizing their divorce.
A marital settlement agreement is a contractual agreement entered into by a husband and wife prior to their divorce. The settlement reached can be much more detailed and individualized than a judge’s ruling and can include provisions that a judge would not legally be allowed to include. The parties can work with their attorneys to make sure that their individual needs are accounted for while providing a fair division of the parties’ assets and debts.
A marital settlement agreement can also be used by parties who want to have a trial separation, but be insured of how a divorce will proceed if they are unable to save their marriage. Clients will often want to file for a legal separation in order to preserve their rights while still being able to stay on the other spouse’s health insurance. Rather than going thorough that process, they can sign a marital settlement agreement and wait to file for divorce until the health insurance issue can be rectified.
A court does not have to approve the agreement reached by the parties, but will almost always do so provided that it is a fair agreement and both parties knew what they were agreeing to. In order for the parties to be as secure as possible that the agreement will be approved by the court they must disclose truthfully all of their financial information to the other spouse, must actually abide by the terms of the agreement during the time between signing the agreement and filing for divorce, and they must actually get divorced in a reasonable period of time. If, for instance, the parties wait many years to divorce, a court would be less likely to approve the agreement.
With the passage of the new domestic partnership legislation in Oregon, marital settlement agreements may be able to be used by domestic partners to formalize issues prior to dissolving their domestic partnership.
In conclusion, martial settlement agreements provide a great way for clients to divorce in an amicable and mutually beneficial manner.