The Post-Divorce-Parenting Glossary

Divorced-Parenting Term

Settlement Agreement

What is a settlement agreement

A settlement agreement is a document created by divorcing or separating spouses that is used to define how certain terms of the divorce will be allocated.  A settlement agreement covers issues such as:

When does a settlement agreement in a divorce get created?

The settlement agreement is created during the divorce process.  It can be drawn before the divorcing spouses file for divorce or after.  Typically, a settlement agreement is created during the divorce process, and when the divorce decree is completed, the divorce decree will reference the settlement agreement, which makes the settlement agreement legally binding at that point.

The divorce decree is what actually divorces the people involved.  The settlement agreement does not divorce the parties, which means that merely having a settlement agreement does not allow either person to remarry.  They are legally married or separated until the divorce decree is competed in signed by the court.

Is a settlement agreement required in all divorces?

No.  A settlement agreement is not required in every divorce, but it is typically used in divorces where the spouses want to work out the issues of the divorce without divorce litigation.  This type of divorce is call an uncontested divorce.  In an uncontested divorce, the settlement agreement will usually end up being signed by both spouses, indicating they agree to the terms in the settlement agreement.  If approved by a family court, the judge will likely create a final divorce decree that references the settlement agreement.

In the case of a contested divorce, which sometimes occurs in toxic, high-conflict divorces, no settlement agreement is available.  In contested divorces, a judge will decide the details of the divorce decree.


What are important considerations when creating a settlement agreement?

One of the biggest reasons that divorcing people experience high-conflict divorces is because they faile to compromise during the settlement agreement.  If either person in a divorce is unwilling to yield on certain aspects of the settlement agreement, the divorce is likely to become more contentious and more expensive.  If children are involved, this conflict can affect how the children adjust to the divorce.

Here are some tips to avoiding a high-conflict divorce when creating the settlement agreement:

It is unrealistic to assume that you will get everything you want in the divorce without the other person resisting.  The first law of motion stated by Isaac Newton states that for every action there is an equal and opposite reaction.  The same principle holds true for divorce negotiation.  When one person does something to the other, it comes back — usually amplified in a very negative way.  Rather than squabbling for everything you want in the divorce, be willing to sacrifice some things to keep the peace if possible.  It will make life much easier post-divorce.

Put the kids' needs first
There is a myth among divorcing parents that assumes that if the custodial parent is happy, the kids will be happy, too.  It doesn't work that way, and often the happiness of the custodial parent comes at the expense of the children.

Children have two parents, and expecting them to accept one over the other is not only not realistic, it is cruel.  Many studies have shown that children fair better in life when both parents are maintaining an active role in their lives.  This might mean sacrificing sole custody and accepting joint custody.  It might mean not moving out-of-state, and instead, consenting to a relocation clause in the divorce decree.  While these factors might not be what one of the parents wants, it goes a long way to helping the children adjust to the new lifestyle being imposed on them.

Consider a mediation clause
A mediation clause is a form of dispute resolution that attempts to use a third-party to help divorced or separated people negotiate their differences.  The goal is to help each of them compromise on certain parts of their divorce so they are not having to go to court.  A mediation clause can help to prevent unnecessary conflict and litigation in some cases, however there are some things to consider when using a mediation clause.  One of the most important factors to understand about mediation is that it is not binding.  In other words, if two people come to an agreement during mediation, either person can change their mind if the agreement is not signed by a judge.

Consider and arbitration clause
An arbitration clause is often a great idea to incorporate into a settlement agreement and divorce decree because it can prevent expensive and time-consuming litigation if the people cannot come to a mutual agreement.  Often, an arbitration clause is used in conjunction with a mediation clause.  If the parents are unable to mediate an agreement in an allotted amount of time, then the arbitration clause forces them into binding arbitration to resolve the dispute.  This usually prevents the need to go to court, and it costs far less than divorce litigation.

Decide the appropriate parenting strategy
There are three types of divorce parenting styles that are common.  For worst to best, let’s define them.  These are:

High-conflict parenting.  When parents simply cannot get along, and they fight in front of the children, they are in a high-conflict parenting relationship.  The goal of divorced parents should be to avoid this awful lifestyle as much as possible.  It is hard on the children, and the stress on them can have lasting consequences long after the divorce is finalized.

Parallel parenting.  If divorced parents are likely to experience conflict when they communicate, they should simply avoid the communication triggers that lead to that conflict.  Parallel parenting is a strategy where divorced parents simply avoid contact and communication with the other parent in order to prevent unnecessary fighting.  Parallel parenting can be thought of as agreeing to disagree.  Each parent can have their own parenting style, but must respect the other parent's right to do the same.

Co-parenting.  If divorced parents get along amicably, they may be in a position to communicate effectively with one another about the children's needs.  Effective parents in nuclear families co-parent naturally in a married environment.  They naturally tell their spouse about issues as they come up and work out a strategy to address those issues together.  This is easier said than done for divorced parents.  While co-parenting is a great goal and is in vogue, it is not a good idea if the two parents are unable to communicate without stress.

The best strategy for most divorced parents is to default to parallel parenting, but move a little toward co-parenting if they are amicable. The thresholds that exist between each of these parenting styles are not solid.  Rather, they are blurred and it is common for parents to experience a parenting style that encompasses two at the same time.  Hopefully those two are a blend of parallel parenting an co-parenting.

What other names does a settlement agreement go by?

A settlement agreement may also be referred to as:

  • Separation Agreement
  • Mediated Separation Agreement 
  • Separation and Property Settlement Agreement 
  • Divorce Settlement Agreement
  • Collaborative Settlement Agreement 
  • Property Settlement Agreement or PSA
  • Marital Settlement Agreement or MSA
  • Custody, Support, and Property Agreement 

Because family law differs by state, the form we refer to here as a settlement agreement may go by any of the other form names mentioned above in the state or jurisdiction you live in.

What are the benefits of a settlement agreement?

The benefit of going through the process of creating a settlement agreement during a divorce or separation are that the major details of the divorce are negotiated between the divorcing parties, rather than being left up to a judge.  A settlement agreement results in a significant savings in money, time, and stress during the divorce.

Money savings
The more that divorcing parties can agree on during the divorce, the less the cost of the divorce.  If issues are left for a judge to decide, the divorce litigation process is extremely likely to involve a lot of unnecessary expense.  The overburdened family court system is known for long waits.  Attorneys get paid an hourly rate while waiting for hearings.  It is common for courts to schedule hearings at times that interfere with work schedules, costing even more money.  Contested divorces are far more expensive than uncontested divorces.

Because court schedules are so drawn out, the time to get disputes resolved in a contested divorce is much longer than it is for uncontested divorces.  If the people can work out a settlement agreement without court intervention, the time spent going through the process is significantly less.

There is no way to predict how a judge will decide an issue.  It is extremely common for an attorney to convince their client that their case is solid, only to find out later that it wasn't as solid as they thought.  Their are simply too many variables in family law, and attorneys — even good ones — aren't omnipotent.  And usually the stress associated with waiting to find out how a judge will decide a case is extremely high for both parties.


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