A financial settlement is the process of dividing the liabilities and assets between the couple that have parted. It also includes choices on periodic payments, such as maintenance, and the granting of lump sums like transfers of property or pensions.
The divorce settlement should include the financial settlement so that concerns regarding finances that can't be addressed can be thrown out. Also, this will ensure the spouse is not remarried or creates any new claims against the other.
Matrimonial assets
Marital assets and their value can play an important role in settling the financial aspects of divorce. The court is required to fairly divide the marital estate between the spouses. This is inclusive of all property and other assets acquired during the marriage, including profits such as commissions and bonus payments, and rights under contracts. It also includes other income streams, like dividends or interest in addition to any debts incurred in the course of marriage.
When dividing assets, the very first thing to determine is what is part of the marital estate and which isn't. The vast majority of property that is acquired by either spouse is marital. This doesn't include inheritances, compensation for personal injuries or workers' comp awards, nor third party gifts. If there's a prenuptial/postnuptial contract that the couple has signed, they may stipulate what is marital and not. If there's no prenuptial or postnuptial arrangement, then the state will determine whether the property is owned by the couple.
The term "separate property" refers to an asset that was acquired by one spouse prior the union. The real estate market, investments and liquid assets such savings or checking accounts and jewellery cars, furniture, and other items could all be classified as separately owned property. However, separate property can become a marital asset if it's mixed together with property belonging to the marital. It is usually the case when spouses add the new spouse's or husband's name to a bank account which contained only their separate money or when they are using distinct funds to construct changes to their marital residence. This may happen when separate properties are traded for different property or for debts which are to be paid by marital funds.
The asset may also be considered an asset that is marital in value grows during the marriage. If you had a house before your wedding, however you made improvements to it that increased its worth, you could be eligible for a payout.
A judge will also take into account the duration of marriage, age and health of the spouses in determining the fairness of a marriage. The length of marriage and the health and age of each spouse may be considered. Additionally, it could take into consideration the contributions and the contributions made by each spouse as a parent, wage earner or homemaker. Then, it can financial settlement consider the requirements of both spouses for the household and housing needs.
For the purpose of valuing marital assets courts must take into consideration its fair market value of the property. This is defined as "the amount a willing buyer would pay to a willing seller on the market without either party under any compulsion to conclude the sale." In order to arrive at fair division the court will subtract the debt balance outstanding from the amount of marital assets.
If the assets aren't divided through a process of division, a court can award distribution. It is typically an amount of money paid to a party. It can be made as an all-in lump sum payment or as periodic payments depending on the circumstance. It could be applicable to specific types of houses for example, such as the home of a family. In most cases there is no need to worry about it.