Whether one’s finances equate to a high-asset divorce or that of an average middle-class income and assets, various issues should be covered in the negotiated settlement agreement. One of the first considerations of a divorce negotiation, whether in Georgia or another state, will be the children and their financial care, if applicable. One thing to decide, for example, is the future college expenses of the children.
Generally, college expenses cannot be compelled from a former spouse in a later support proceeding. Instead, they are generally a contractual matter between the parents, and sometimes between the parents and the child. Therefore, if a spouse agrees to assist, this must be put in the final agreement.
Child support is generally an obligation until the child reaches 18. A child support order is entered in support court, but the initial amount can be negotiated and entered as a court order without contentious, time-consuming proceedings. Child support, along with all potential needs and obligations regarding the children, should be discussed thoroughly with one’s attorney prior to divorce negotiations.
Occasionally, the marital home will be turned over to the spouse who remains there with the children. They must negotiate who will pay the mortgage payments, how title will be held and any compensatory payments being made as a part of the transfer. Alternatively, the real estate may be sold and the net proceeds divided between the parties. Another way is for one spouse to buy out the other’s interest and, preferably, obtain new financing to eliminate completely the other spouse’s obligations. Additionally, taxes can be a concern in some negotiations.
For example, in Georgia and all jurisdictions, alimony is taxable as ordinary income to the payee and a deduction for the payor. Retirement accounts of the spouses must be evaluated and negotiations conducted, if appropriate. Provisions for various insurance coverages may need to be agreed upon. Other issues, such as joint accounts and jointly-held assets, must be finalized by agreement. One will work in tandem with his or her divorce attorney for a full and complete resolution of all issues prior to agreeing to a settlement.
Source: Chicago Tribune, “5 financial facts of divorce“, Terry Savage, March 15, 2015