4 Reasons (although there are MANY more other reasons) to Draft a Marital Separation Agreement

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Talking to an attorney about the issues that can be addressed in a Separation Agreement is so important. Many of my clients are so grateful for our discussions regarding the Separation Agreement, because we were able to pinpoint issues that they had never even considered before our conversation.

Just because you’re filing for an uncontested divorce doesn’t mean there aren’t important matters to discuss with your spouse about the split. When it comes to retirement accounts, child support, property matters, etc., it’s best to have a separation agreement in place before the Judgment of Divorce has been finalized to resolve potential issues before they start.

Even if you are simply separating with no current plans for divorce, a separation agreement is a good idea. The agreement will protect you so you and your spouse don’t have to argue over every issue that comes up during the separation. Instead, you can move on with your life without continuous disagreements.

While some agreements simply provide for separate bank accounts, debts, and retirement accounts, others can be more complex. A separation agreement can cover many otherwise tricky issues to help you and your spouse ease into separate lives.

Dividing Marital Home and Property

If you are in a better financial position than your spouse to pay the mortgage on a house or property, it may be awarded to you. However, you may be required to buy out your spouse’s portion or pay them a marital cash settlement in exchange for their interest in the property. Marital cash settlements can be accepted as installment payments or one large lump sum. On the plus side, this transfer of funds can be tax-free as long as your separation agreement places it under the correct IRS Code provision.

Foreseeing Income Tax Issues

Will you file separate or joint tax returns during the separation? If you file separately, who will claim the dependency exemption for your children? If there’s an audit, who will pay the interest and penalties? How will tax refunds be split between you and your spouse? These are all important questions that can lead to a major headache without a separation agreement. By agreeing to terms before you split, you can prevent trouble down the line.

Dividing Marital Debt

Most separating couples have some kind of joint debt. This can include student loans or everyday bills such as cell phone bills, credit card bills, mortgage loans, and other debt you’ve built together during the marriage. A separation agreement will determine who is responsible for the debt and how it will be repaid. By doing this, you can ensure that you and your spouse maintain good credit.

Determining Custody and Child Support

There’s nothing more important than making sure your children are provided for. By creating a separation agreement, you can agree on how to divide your time with and parent your children. An agreement will spell out the issues of custody, child support, and visitation/parenting plans, so you can care for your children without bickering over how it should be done.

Separation can bring out the worst in people when it comes to difficult issues. By resolving these issues before your split with a separation agreement, you can protect yourself both financially and emotionally.

To draft an agreement that benefits all parties, it’s best to talk to a divorce lawyer to help you determine the issues for your particular situation and create a clear document that helps both you and your spouse to move forward. The compassionate and supportive attorneys at Easterling Law, PLLC, are here to guide you through the process. Call us today at 980-272-1365 or contact us online.