What Should a Divorce Agreement Address?
For couples considering a New Jersey Divorce, the ultimate goal is reaching a divorce agreement, commonly known as a Marital Settlement Agreement (“MSA”) or a Property Settlement Agreement (“PSA”).
It may take months or years to reach agreement. Throughout your divorce process, the divorce agreement will likely feel as though extended in space–just out of reach. Some couples can find common ground in a matter of hours, whereas others require extensive discovery, court motions and actions, and hundreds of hours of negotiation.
But one thing I find is that many clients are uncertain about just what can be addressed in a Marital Settlement Agreement. The purpose of this blog post is to briefly summarize some of the considerations in a standard Divorce Agreement. In future blog posts I will further define and explain the specific clauses and considerations.
The Standard Divorce Agreement Considerations
- Child Custody. If there are children from the marriage then this will be a major divorce consideration. New Jersey considers both legal custody (the ability to make important decisions on behalf of the child) and physical custody (who spends more time caring for the children on a day-to-day basis). Agreements veer toward joint legal custody, in recent years joint physical custody is becoming increasingly popular. To learn more please visit my blog post on New Jersey Child Custody.
- Parenting Time. Parenting time (previously referred to as child visitation) delves more deeply into the day-to-day technical details of sharing parenting. It will address drop-off and pick-up, daycare or school transportation, holiday parenting time, vacation/summer parenting time, and which days/hours per week each parent will exercise parenting time with their child(ren). To learn more please visit my blog post on New Jersey Parenting Time.
- Alimony. Alimony (also referred to as spousal support) involves payment due from one spouse to the other post-divorce in order to equitably preserve the marital lifestyle between the parties post-marriage. The standard type of alimony case initially considered by the court was the situation where one spouse put everything into their career and earned a large salary whereas the other stayed home to raise the children and now has a deflated earning potential. Alimony has now grown to be more prevalent than perhaps initially intended, but was recently scaled back some by alimony reform. To learn more please visit my blog post on New Jersey Alimony Reform.
- Child Support. Child support in New Jersey is essentially an algorithm that will take inputs (such as amount of overnights and incomes of parents) to produce a child support obligation. To learn more please visit my blog post on New Jersey Child Support.
- Equitable Distribution (the division of assets and debts). Equitable distribution is a very broad category of the New Jersey Divorce and may include everything from ownership of your pet (yes, even dogs are considered property in New Jersey) to credit card/personal debts, vehicles, the marital residence or other real property, stock options, retirement accounts, personal items, and much more. Cases where one or both parties own a business can further complicate equitable distribution in a Divorce Agreement. To learn more please visit my blog post on New Jersey Equitable Distribution for closely held businesses. Or click here to learn more about what assets or debts may not be considered “marital” for purposes of division.
- Counsel Fees. Divorces can sometimes be costly and time-consuming. One thing that should be considered is whether one party should be responsible for reimbursement of counsel fees to the other. To learn more please visit my blog post on which spouse pays New Jersey divorce counsel fees.
- Future Education Costs. Another consideration is how future college costs, private school costs, or even daycare costs will be paid and the obligation each party will have towards such payments in the present or future. To learn more please visit my blog post on divorce college costs in New Jersey.
- Life Insurance Requirements. The Divorce Agreement should also address using life insurance as a collateral to protect future child support, spousal support (alimony), educational costs, or other appropriate future costs. To learn more please visit my blog post on New Jersey divorce Life Insurance considerations.
- Health Insurance/Future Health Costs. A Divorce Agreement should also contain language regarding COBRA for the uninsured spouse (generally available at-cost to the uninsured spouse for 18 months), coverage for any children of the relationship, and to what extent each party will be responsible for the child(ren)’s future unreimbursed medical expenses. To learn more please visit my blog post on New Jersey Divorce medical/health insurance costs.
- Tax Treatment. Although most New Jersey divorce attorneys are not tax experts (and thus cannot provide tax advice), you should speak with a CPA/tax attorney (and collaborate with your divorce attorney) on issues of taxation and divorce. I have recently blogged about how under Tax Reform alimony will no longer be deductible and alimony received will no longer be treated as income commencing for divorces finalized January 1, 2019 or later. I have also blogged about other impacts the Tax Reform may have on New Jersey Divorces.
- Education/Child’s surname/Religious Upbringing. The Divorce Agreement should also address potential parenting issue such as religious upbringing, education (for instance: private school or public?), non-disparagement clauses regarding the other parent/their family, and other miscellaneous provisions. To learn more please visit my blog post on Choosing a Child’s Religion in a Divorce.
- Additional Clauses. The scope of this post is too brief and every case too fact-sensitive for this to serve as anything more to an introduction to the types of clauses that may be contained in a Divorce Agreement.
I hope the above assists you at the outset of a divorce (or even if you’re just considering a divorce) to better understand the types of issues that may be at play in your New Jersey divorce matter.
Your New Jersey Divorce Lawyer:
If you’re considering a New Jersey divorce or Family Law action contact me to discuss your options. You can schedule an initial consultation by calling my office at 908-237-3096 or by scheduling your own divorce consultation online by clicking here.