Financial settlement refers to the process of dividing both liabilities and assets of a couple who have separated. This can include deciding on regular payments such as maintenance and lump sum orders such as the transfer of property or pension attachment.
A divorce settlement should incorporate a financial agreement so any concerns regarding finances that can't be solved can be dealt with. Also, this will ensure there is no remarriage or any new claims against one another.
Matrimonial assets
Marital financial settlement assets and the value they carry are a major factor in settling the financial aspects of a divorce. The court is required to distribute marital assets in a fair way between the spouses. It includes all the property and assets earned or acquired in the course of marriage, which includes profits such as commissions and incentives, as well as contractual rights. This includes all passive income like dividends and interest, along with any obligations incurred by the couple.
To divide assets, the most important thing to do is determine what belongs in the marital estate and which doesn't. The vast majority of property that is acquired through either spouse is marital. This doesn't include inheritances and compensation for personal injury or workers' comp awards or third-party gifts. If a prenuptial or postnuptial agreement is in place, then the parties may define what constitutes marital property and which is not. If there's not a prenuptial or postnuptial arrangement, then it is the decision of the state whether the property is owned by a couple.
Separate property is typically comprised of assets bought by one party prior to the marriage. These can be property, cash or other liquid assets (such like savings and checking accounts) and art, furniture or jewelry as well as vehicles. However, separate property could be a marital asset when it is commingled and marital assets. It is most likely to happen when one spouse adds the name of their husband or wife to a bank account that only contained their separate money or they use their separate funds for the purpose of improving their marital home. Also, it can occur when distinct assets are traded to buy a new house, or if debt is made payment with marital cash.
A different issue is that distinct property can be considered marital assets when they grow in value during the wedding. For example, if you were the owner of a house prior to getting married, but then added significant changes that improved its value, this may give rise to an award for the house.
Beyond these aspects A court also has to take into consideration the other pertinent facts in deciding what is fair in terms sharing property. The length of the marriage, the age and health of each spouse could be considered. The contribution of each spouse as wage earners, parents or housewives could be considered. This can include the demands of both spouses in terms of home and household necessities.
In valuing marital assets courts must take into consideration its fair market value of the asset, which can be defined as "the value that a willing buyer would pay for a willing seller on the market in an open manner, with neither of the parties under any obligation to complete the sale." To determine an equitable division the court will subtract the debt balance outstanding from the amount of marital assets.
If the assets are not divided in a manner that is fair, the court will have to issue a distributive award that is a financial payments to a particular party. This may be given as either a lump-sum amount or monthly installments depending on the situation. The same can be the case for certain types of property, like the home of the family. In many cases, this will not be the case.