A property settlement agreement, also known as a separation agreement, is a document which lays out the terms for the division of shared property in case of a separation or divorce between the parties to a de facto marriage, civil union, or relationship. This sort of agreement allows the two parties to settle the division of the property without recourse to the Court.
A property settlement agreement is drafted for the purpose of settling any differences that may have arisen on matters of property. The agreement must lay out, in clear terms, the status, ownership and division of the property in question. It is essential that the agreement be in writing, and it needs to be signed by both parties; however, before the agreement is signed, both parties must get independent legal advice. The lawyer who advised the couple must be present at the time the agreement is signed, to act as a witness, and s/he must also certify that s/he made their client fully aware of the agreement’s effects and implications.
While property settlement agreements are not a legal requirement, they can serve as an excellent way to prevent further disputes by serving as a record of the agreements and decisions made by the couple who has decided to separate. In addition, they are also useful when a couple wants a contract that cannot be overturned. If you are looking to draft a property settlement agreement, there is a certain method you need to follow:
- You need to begin by agreeing on terms with the other party in the case of the division of property, before you begin writing the property settlement agreement. This should generally involve lawyers or a court order, although it can also be done without counsel.
- The agreement should begin by setting one party out as the “petitioner” or “applicant”, and the other as the “responder”.
- The first section of the agreement is known as the “background”, or “preliminary matters”. This needs to contain the date and location of the marriage, the reasons behind why the couple has decided to separate (generally irreconcilable differences), and when and where the divorce agreement was reached. This section should also clarify that this agreement is final and binding as far as the division of property is concerned, and state that both parties have arrived at this decision mutually, with full awareness of their rights.
- Next, add a section which expounds on the agreements regarding all land property and homes. In this section, clarify who will retain the ownership of the land or home – the petitioner or the respondent. Clearly state the home’s value, and outline any payments that have yet to be made. If the home and land are to be sold, the agreement should state the date by which it will be sold, and the way the proceeds will be split.
- Add another section to lay out the terms for the division of the property – this should also deal with the division of items like household objects, vehicles, pets, etc. List all the objects, their value, and who will retain ownership of what (the petitioner or the respondent).
- The next section should be titled “investment and retirement accounts”. This section needs to list all the accounts, their value, and who will be retaining ownership of it. If an account is shared, indicate how it will be divided.
- If there are any children, the property settlement agreement also needs to contain a section on “property or accounts held on trust for children”. This should list all the accounts and properties, outline who will retain control of them for now, and when these will be passed onto the children.
- Finally, add a section titled “attestation”. Here, the agreement needs to be signed and dated by both the petitioner and the respondent, after which an attorney or notary needs to sign and date these signatures as a witness.