Key Considerations Before Signing a Divorce or Custody Settlement Agreement
Navigating a divorce or custody battle is challenging, and reaching a settlement agreement can bring a sense of relief. However, it's crucial to thoroughly evaluate the terms before signing to ensure your rights and interests are protected. Below are essential factors to consider:
- Understand the Binding Nature of the Agreement
Once signed, a settlement agreement becomes a legally binding contract. Modifying its terms later can be difficult, often requiring proof of significant changes in circumstances. The recent unpublished New Jersey Appellate Division decision in Reyes v. Lewis (Docket No. A-3969-22) decided on March 10, 2025, underscores this point. In that case, the court denied the defendant's motion to modify the 2018 Judgment of Divorce concerning parenting time and child support, emphasizing that modifications require demonstrating changed circumstances. The Defendant’s decision to enter into the settlement agreement out of guilt due to an affair, was insufficient to warrant a modification. Therefore, it is very important to understand the potentially permanent impact a settlement agreement may have on your life.
- Assess the Fairness of Asset Division
Ensure you have a comprehensive understanding of all marital assets and debts. Consider consulting a financial expert to evaluate the proposed division's fairness. Overlooking assets or agreeing to an inequitable division can adversely affect your financial future.
- Consider Future Financial Stability
Evaluate the long-term financial implications of the settlement. Will you maintain your standard of living? Do you have access to health insurance, retirement funds, or adequate financial support? Ensure that any spousal or child support arrangements are fair and sustainable. Are you getting a fair deal or are you giving something up that you shouldn’t?
- Evaluate Custody and Parenting Arrangements
If children are involved, their well-being should be the top priority. Carefully review custody arrangements, parenting schedules, decision-making responsibilities, and any relocation clauses. Ensure the agreement provides a stable and fair co-parenting plan that serves the children's best interests. Though custody and parenting time arrangements can be changed, this is only after a party can show that circumstances have changed which warrant a modification.
- Understand Tax Implications
Divorce settlements can have significant tax consequences. Issues like property transfers, alimony payments, and child tax credits can impact your financial situation. Consulting with a tax professional can help you understand how the settlement will affect your tax liabilities. Failing to consider tax implications may result in a disproportionate split of the assets.
- Ensure Clarity and Enforceability
A well-drafted settlement agreement should be clear and specific to prevent future disputes. Vague or ambiguous terms can lead to misinterpretations and legal battles down the road. Ensure that the agreement clearly outlines responsibilities, payment amounts, timelines, and enforcement mechanisms.
- Avoid Signing Under Pressure
Divorce proceedings can be stressful, and you may feel pressure from your ex-spouse, attorneys, or even family members to finalize the agreement quickly. Take your time to review the terms thoroughly. If you feel uncertain or uneasy about any part of the agreement, seek legal advice before signing.
- Consider the Impact on Your Emotional Well-Being
While the legal and financial aspects are critical, do not overlook the emotional impact of the settlement. Ensure that the agreement allows you to move forward with peace of mind and stability. A rushed or unfair settlement can lead to regrets and prolonged emotional distress.
Conclusion
A divorce or custody settlement is a legally binding document that can shape your future and your children’s future in significant ways. Taking the time to review it carefully, seek professional advice, and consider its long-term implications can save you from potential regrets. Protect yourself and your future by ensuring that your agreement is fair, clear, and in your best interest before signing. The family law department at Hoagland Longo is comprised of experienced attorneys who have the knowledge to properly guide you through this process. If you are contemplating hiring an attorney, or have any questions, please do not hesitate to contact us.
Jessica N. Mazur at jmazur@hoaglandlongo.com or 732-200-4626