Divorce Settlements - Assets And Debts

Divorce settlements may be defined as an order made by the court, affirming the terms of an agreement between the couple in a divorce. From a legal point of view, divorce settlements include child custody and support, property and debt, spousal support, pensions and retirement accounts.

In United States, each state has its own laws to determine the division of property. Division of property is done based on two different systems, community property and equitable distribution. Community property is property owned equally by the couple and is divided equally at divorce. The states that follow a community property system are California, Louisiana, Nevada, New Mexico, Washington, Arizona, Idaho, Wisconsin and Texas. States that follow equitable distribution system consider assets as marital property and each spouse is awarded a percentage of the total value of the assets.

Alimony is court-ordered support paid by one spouse to another, after they are separated. In United States, alimony is often referred to as maintenance or spousal support. In Colorado it's called "maintenance." Each state has different laws and this determines the amount and time of alimony. Any alimony order for a wife will come to an end when she remarries. When it comes to child custody, each state has rules or "statutes" that govern child custody, and they are always in the best interests of the children. The law demands that parents should support their children. Child support laws throughout the United States ensure every child's economic support so that the standard of living is preserved.

In case of debt, the court will instruct both the individuals to pay a part of the debt. The wife often loses her entitlement to death-while-in-service benefits from her husband's job or widow's pension in the final phase of divorce. These factors should be considered before thinking of a settlement, because pensions are the most valuable assets and future benefits. Careful consideration must be given to tax implications at the time of divorce. Professional help can be obtained in terms of these benefits as part of the overall settlement plan.

Next article: Divorce And Your Real Estate

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