When separating from your spouse, questions surrounding how assets and liabilities will be divided can be decided in one of two ways. If you disagree, the Court can hold a hearing and issue a decision deciding division for you, or you and your spouse can come to your own agreement. If you and your spouse can agree on the majority of issues, then you and your spouse should enter into a Separation Agreement.
A Separation Agreement is a legally binding document between the separating spouses that establishes exactly how the spouses will separate out their assets and liabilities. Numerous provisions must be included in your Separation Agreement and you must be prepared to discuss all of these topics with your spouse.
Consider all of the following:
Real Estate
Real estate includes lands, mortgaged properties, buildings, fixtures attached to buildings, attached structures (for example, garage, in-ground pool), condominiums, time shares, mobile homes, natural condition stakes (for example, gas, oil, mineral rights, existing soil, including trees and landscape), and inheritance rights in real estate.
In many cases, the biggest real estate that needs to be dealt with in a Separation Agreement is the marital home. There are many issues that will need to be resolved, such as which spouse will receive the home or will it be sold? If the home will be sold, who will be entitled to live in the home until it is sold and who will be responsible for paying the expenses related to the home? If one spouse is going to keep the house, do they have the ability to refinance the home if it is in your joint names? Other issues to consider when it comes to the home, is how much the home is worth and how much the other spouse is entitled to receive for the marital equity of the home.
Titled vehicles include boats, trailers, automobiles, motorcycles, trucks, mobile homes, golf carts, motor scooters, sport utility vehicles (SUV), recreational vehicles (RV), all purpose vehicles (APV).
The model, make, year and serial number for all vehicles will need to be obtained. You will then need to be decide who will keep each vehicle. Do any vehicles need to be re-titled or does any refinancing need to occur? Also, how much is each vehicle worth and how much is the other spouse entitled to receive for their marital equity in the vehicle?
Vehicles
Household Goods
Household goods and personal property include appliances, tools, air conditioner window units, doghouses, lawn mowers, riding lawn mowers, above ground pools, safety deposit boxes, jewelry, furniture, refrigerators, silverware, collections, china, and books.
How will all of the household goods be divided? Are there any debts associated with any household goods? Will there be any exchange of money to offset any inequities in splitting the household goods? When should the household goods be picked up or delivered?
Financial Accounts
Financial accounts include checking, savings, certificates of deposit, money market accounts, medical or health savings accounts, education or college saving plans (for example, 529 Plan) and trusts.
You will need to disclose the institution where the account is held, the names on the account, and the type of account. To best divide these accounts, you will want to know the balance of all of the accounts as of your separation date. How will the funds in these accounts be divided and retained?
Retirement Accounts
Retirement accounts include pensions, profit-sharing plans, IRAs, 401(k)s, and other retirement plans.
You will need to know the type of account, which institute the account is held with, and whose name the account is in. What was the balance of each of these accounts prior to marriage and what is the balance as of separation date? Are each of you entitled to one-half of the account or was some of the account earned prior to your marriage? A Qualified Domestic Relations Order (QDRO) or Division of Property Order (DOPO) may be necessary to divide some of these accounts.
Life Insurance Policy
Many spouses have an interest in a life insurance policy. Who is the owner of the policy and what is the death benefit amount? Is the policy whole life or term? If a policy has cash value, how will the non-owner spouse receive his or her share of the cash value? Will either party be required to designate the other as a beneficiary (i.e. to secure child support or a full property settlement payment) and in what amount?
Business Interests
Business interests can vary and are complex. The biggest question to ask yourself is how the business interest will be equitably divided. A business appraisal will likely be needed in order to ensure the value of the business.
Debts
Debts can include items such as mortgages, automobile loans, and credit cards.
You will need to gather all of the creditors, the purpose of the debt, the spouse who holds the debt, and the current balance of the debt. Who will be responsible for paying each debt and, if jointly own, when will the debt be paid off?
Spousal Support
Spousal support is financial assistance provided to one spouse by the other spouse that is typically determined by the parties’ incomes and the duration of the marriage. Will either spouse be responsible for paying spousal support and for how long? Should the Court retain jurisdiction to modify spousal support in the future? When will spousal support terminate?
Property Settlement
In order to equalize the division of marital assets/debts, will one spouse owe the other spouse any money?
In drafting a Separation Agreement, it is critical that all assets and liabilities are properly considered and addressed in order to create a fair and equitable agreement. Once a Separation Agreement is signed, the agreement is binding. As such, it is extremely important that you consult with a family law attorney prior to signing a Separation Agreement to ensure that all of your needs and desires are properly addressed.
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At Kirkland & Sommers, Co. LPA., located in Dayton and West Chester, Ohio, divorce and family law is not just something we do…it is all we do! To learn more, go to our website www.KirklandSommers.com. Or, please contact us at (937) 223-0697 or (513) 563-3166 to schedule an appointment for an initial consultation.