A separation agreement (sometimes called a Pendente Lite Order) is a official agreement between you and your spouse. It provides for support and other financial conditions until the divorce becomes final. This should be in the form of a court order. Without a court order your agreement is not binding. This should be easy if you and your spouse can agree on the terms. Your separation agreement is something you and your spouse should negotiate because like all other aspects of a divorce the more decisions made out of court the better off you are. Unfortunately, getting your divorce may take longer than you think (or would like). That is why it is so important to have a concise separation agreement.
What the agreement should include:
- Child Support: This should include how much child support is to be paid; how often it is to be paid and the way it will be paid. If possible you may want to have it as a payroll deduction through your local child support agency.
- Visitation: Set visitation schedule, being as specific as possible. Make sure the times set aside are reasonable for the children as well as the adults. Often adults forget that children have lives of their own when setting up the visitation schedule.
- Alimony: How much alimony if any is to be paid. Alimony is taxable to the recipient and deductible for the payer only if the alimony is in the form of a Court Order, or a written agreement signed by both parties. Additionally, if there are alimony payments you may not be able file a joint return. Discuss this with an accountant. Depending upon the situation, it may be better to not allocate the funds as alimony.
- Debts: Determine who will be responsible for the joint bills.
- The House: Specify who will remain in the marital residence (formally known as your home), who will pay for the upkeep of it, if one party is paying all the bills will the expenses for upkeep be allocated at the time of the divorce, or if the house is sold. Click here for more information on selling you home. If you own a home, who will take the tax deduction for the mortgage interest and real estate taxes if you file separately. Usually it is the person who is paying the mortgage; however, if one person needs the deduction and the other doesn't need it, this could be a good negotiating point. Click here for more information on selling you home.
- Taxes: If you are due any type of joint refund such as tax refund, determine how they will be split. If you can't reach an agreement often times those funds end up in an escrow account until the issue is settled. If you have children, who will take the tax deduction for the children if you file separately. Usually the spouse paying the support would be allowed to claim one or more of the children Depending on the amount of support being paid. However once again if one person can use the deduction and the other doesn't need it, this could be a good negotiating point.