EP 25: Three Important Questions Before Signing Your Divorce Settlement

Welcome to the twenty-fifth episode of the Divorce and Your Money Podcast. Your host, Shawn Leamon, MBA and a Certified Divorce Financial Analyst, will talk about the three questions you need to ask before signing your settlement proposal.

You need to consider three key points before signing the settlement proposal. If you fail to do so, you may face unfortunate circumstances.

1. Do you understand the settlement proposal?
2. Can you afford it?
3. What happens if your spouse refuses to honor a particular portion of the agreement?

First, you need to make sure you understand the whole document. If you have any questions, even about minor things, you need to make sure you clarify them with your attorney. Things are often confusing or incorrect the way you assumed. There is almost no coming back once you sign the papers, so make sure you are content with everything.

Second, can you afford the terms of your proposal? Regardless of whether you are paying or receiving alimony or child support, you need to consider other things, too, for example, the cost to maintain the house, value of an investment portfolio, or tax consequences of selling hedge funds. For spouses who will be paying alimony or child support, have you made a budget with those payments included? How will it affect your lifestyle? Your attorney will be taking care of legal matters, but you also need to have someone do the math for you.

Third, what happens if your spouse refuses to honor a particular portion of the agreement? For instance, an ex-spouse may not pay the child support they are obligated to do. What if your ex-spouse is incapacitated? Your attorney needs to have an outline of actions that need to be taken in such scenarios. You need to have the contingency planning done with your attorney, and some of this needs to be included in the settlement agreement.

Key Learning Points:

• Three things need to be taken into consideration before signing the settlement proposal.
• Do you understand the settlement proposal?
• Can you afford it?
• What happens if your spouse refuses to honor a particular portion of the agreement?