What to Include in the Marital Settlement Agreement
The Marital Settlement Agreement is a comprehensive, global agreement which accompanies the court forms submitted for final judgment. It should include all of the agreements regarding investment property, personal property, child and pet custody, support, business interests, and debts. The devil is in the details, and the MSA should be specific with timelines, dates and accountability to ensure that it can be executed and enforced.
A few items that should be included in the Settlement Agreement Checklist include:
Real Property: (real estate, residential/investment property, land, improvements, wells, buildings)
- Consider the following:
o Will one of you remain living in or keeping the property?
o How will you determine what the ‘buyout’ amount will be? How will it be paid?
- Will the property be sold? What will the timeline be?
- How will the equity in the property be divided?
Vehicles (cars, trucks, RVS, 4-wheelers, boats, trailers)
- Will the vehicle(s) be sold?
- Will either spouse keep the vehicle(s)?
o If so: is there a loan that will need to be refinanced
o Are there any documents that need to be completed to transfer the titled from one spouse to the other?
o Will there be an equalization payment (buyout amount)?
Business Interests (sole proprietorship, partnership, LLC, corporation_
- Will the business be sold?
- Will one spouse keep the business?
o How will the value of the business be divided?
o What paperwork is needed to transfer ownership of the business?
Personal Property (clothing, cookware, tools, furniture, collectibles, artwork)
- Who will keep the items?
Will There Be an Equalization Payment from one spouse to another to achieve the 50/50 division of the various assets?
Retirement Assets (401(k), 457(b), pension, traditional IRA, Roth IRA, ESPP
- Will either souse receive a portion of the other’s retirement account?
- Will a QDRO be required to transfer retirement assets from one spouse to the other without a tax penalty?
- Are there any loans against retirement accounts to consider?
Bank Accounts (checking, savings, money market, certificate of deposit)
- After division, who will keep the account?
- Is there any paperwork that will need to be completed to remove one spouse from the account?
- Do the funds in the account need to be divided?
- Will the accounts be closed?
Investments (vested, unvested stock, brokerage, bonds, mutual funds)
- After division, who will keep the account?
- Will the accounts be closed?
- Is there any paperwork that needs to be completed to remove one spouse from the account?
- Will one spouse be holding unvested stock in a constructive trust or will there be a lump sum offset?
Life Insurance
- Determine if the cash surrender value of any whole life policy
- Does a new life insurance policy need to be purchased to secure child support or spousal support?
- If there is a long-term care policy for both spouses jointly, determine how the insurance company will divide the policy
Debts (credit cards, student loans, personal loans)
- Who will retain the debt and continue paying for it?
- Will the debt need to be refinanced?
- Will the debt to be paid off by selling an asset?
Spousal Support
- How much will the monthly spousal support payment be?
- When will spousal support begin?
- How long will the term (length) of spousal support be?
- When will spousal support end (certain length of time, death of a party, remarriage of the spouse receiving support)?
- Will spousal support be modifiable and, if so, under what circumstances can it be modified?
- Will there be a lump sum payout of spousal support?
Child Support
- How much will the monthly child support payment be?
- When will child support begin?
- Should there be any credits/adjustments for health insurance premiums paid for the children, child care expenses, or extracurricular costs?
- How will child support be paid (check, direct transfer, income assignment, etc.)
- Who will receive the tax dependency exemption for the children each year?
Note: This article is for informational purposes only and is not intended to provide either tax or legal advice. Please contact your attorney or accountant and rely on their independent research and advice for these matters.
