Your Divorce Agreement: How to Negotiate Your Best Outcome

I'm Jamie Lima, your resident finance expert for My Next Chapter, and I'll be joined by Renee Bauer, who will share her legal perspectives as we discuss negotiating your divorce settlement. Remember, the goal is a fair agreement for both parties. Let's start with the financial aspects.

Many of our clients spend a lot of time worrying about who's going to get the house and the retirement accounts. Those are key assets, yes, but what about things like the family medical plan, fringe benefits from your spouse's employment, and often forgotten benefits like airline miles and timeshares? All of these things come into play and you need to be sure to factor them into your negotiations. It's also important to understand the after-tax value of them, as we've discussed in our video on prepping and understanding your finances. We work with all of our clients to determine the real value of their assets and how to divide them equitably.

Along those lines, many of our clients have a business that they want to ensure that they can maintain after the divorce. That's understandable. So for them, it's important to assess the business's value and consider its role in the settlement. We also need to discuss debts, like the mortgage and credit card balances, and of course, there's always the possibility of spousal support or alimony. Factors like incomes, earning potential, and length of the marriage will need to be considered here. If you have kids in the mix, you'll also have child support and child-related expenses. The good news is child support is less of a negotiation, as that's determined by state guidelines, considering your incomes and the children's needs. We have more on My Next Chapter on this topic.

Hi, I'm Renee Bauer, legal expert for My Next Chapter. To help get you started, we created a worksheet for you with details on topics covered in a typical marriage settlement agreement, including key questions and areas to write out your best-case scenarios. We also have a video and resources on custody arrangements and creating a parenting plan that prioritizes the children's well-being, including a visitation schedule.

Remember, this is a negotiation. You both have priorities, and to reach a settlement you'll have to find common ground. Sometimes you'll need to give up something to hold onto something else that is more important to you. One of the keys to successful negotiation is to refer back to your priorities and goals. What are the most important issues for you in the settlement? What are you willing to compromise on? Once you know what you want, you can start to develop a strategy for negotiating.

It's also important to be realistic about what you can expect to achieve. The goal is to achieve an agreement that is fair and equitable for both parties, not to win at all costs. Be prepared to compromise and find creative solutions that meet the needs of both of you.

Let's talk about some tips. Communicate early and often. The sooner you start talking about the terms of your settlement, the better. This will help to avoid misunderstandings and resentment down the road. Be honest and transparent. Share your financial information and other relevant documents with your spouse. This will help to build trust and make it easier to reach an agreement.

Focus on the future. Don't dwell on the past or blame each other for the breakdown of your marriage. Instead, focus on creating a new future for yourself and your family. Be willing to compromise. No one is going to get everything they want in a divorce settlement. Be prepared to give and take in order to reach an agreement. I tell clients that if both of you are unhappy, the agreement is probably fair.

Consider mediation or the collaborative divorce process. If you and your spouse are struggling to reach an agreement on your own, you may want to consider mediation or collaborative. These processes can help you to resolve the differences and reach a settlement that is fair to both of you.

For example, a couple with two young children may negotiate over who will have primary custody. They may agree to a shared parenting arrangement where the children spend equal time with each parent. Another example might be a couple who owns a house who may negotiate over who will keep the house. They may agree to sell the house and split the proceeds, or one spouse might agree to buy out the other spouse's share of the house. Or there might be a couple who has significant amount of debt, who may negotiate over who will be responsible for paying it off. They might agree to split the debt equally, or one spouse may agree to take on more of the debt in exchange for other assets.

Negotiating a divorce settlement can be a difficult process, but it is important to remember that you're not alone. There are many resources available to help you, such as divorce lawyers, mediators, and financial advisors. With careful planning and communication, you can reach an agreement that is fair to both parties and allows you to move on with your life. And remember, we're here to guide you every step of the way. Thank you for watching.