Divorce Settlement

A divorce settlement is the best way to go, if the husband and wife can come to an agreement—either on their own or with the help of a mediator. This way, the parties are sure to get what they want as far as custody, visitation and assets are concerned. If an issue such as visitation is decided by the court, the parties may not like the schedule the court mandates—but the court is going to do what is in the best interest of the minor children.

Visitation Schedules

Sometimes, because of different work schedules, standard visitation of every other weekend and rotating holidays does not work for the parents. Some parents prefer to have every weekend for visitations—or even have 50 percent shared custody where the child or children live with one parent for a week or two, then live with the other parent for a week or two. If the parents are fighting over custody, but not visitation, the court will generally create a visitation schedule when it rules on custody.

Retaining Assets

A divorce settlement can also help the husband and wife keep certain assets. For example, the husband and wife know that the wife keeps the house, but in return, the husband gets one of two of the wife’s retirement accounts. The husband’s retirement account is at issue. The court may rule on all assets, leaving the couple with assets they did not want. The wife may still end up with the house, but the wife may also get the husband’s retirement account and the husband would get the wife’s two retirement accounts so as to balance out the assets equitably between the two parties.

With a divorce settlement, the parties can keep the assets and liabilities each one wants, and offset the inequitable distribution with another asset or an assets that can be easily divided between the two parties (such as a savings account, which is much easier to divide than a retirement account).

Tax Consequences

Also, tax consequences must be taken into consideration when working up a settlement. It is possible that one party is in a better position to pay taxes on a certain asset, and would therefore take that asset. If the case should go to litigation instead, the court may award the other party that particular asset, and that party may end up losing the asset because of tax ramifications.

In a divorce settlement, because the parties created the agreement, they are more likely to abide by the agreement, rather than a court order awarding issues to the person that did not want certain issues. This in turn keeps the parties out of court to litigate a noncompliance after the entry of the final judgment.