Divorce Settlement Checklist: Everything You Need to Prepare

A divorce settlement is an agreement that helps two people split their assets, debts, and childcare arrangements after their divorce. There’s a lot at stake as you’re drafting these documents. Pulling together plenty of information can help you avoid common mistakes. 

Compiling your divorce settlement checklist 

Know that you’ll need a lot of documents to help you craft the perfect divorce settlement. But the more information you have, the easier your negotiations will be and the fewer mistakes you’ll make. 

These are the pieces you need before you head into negotiations with your ex:What to Include in Your Settlement Agreement

Financial information and documentation 

To split your assets, you must truly understand what you own. Most states recognize this fact, and they require that people trade financial documents several times as part of the divorce process. These same records can help you draft a divorce settlement. 

In California, for example, you’re required to gather and share the following financial documents:

  • Two years of tax returns
  • Two months of pay stubs
  • Bank account statements 

With all that data, you know just what you own. All of these documents should be part of your divorce settlement process. 

You must determine how to split your holdings, especially the amounts in shared accounts. You could separate them into two parts, right down the middle, or trade them for other assets, such as cars or homes. 

Property and assets 

In most states, people must decide if the items they own belong in one of two categories — marital or separate property

Marital property is anything people acquire during their marriage. If you buy houses, furniture, computer products, bicycles, and other items while you’re married, they’re part of your marital estate. 

Separate property represents things you owned before the marriage and assets you acquired through bequests or gifts while married. If you brought furniture, computers, bicycles, and other items from your single life into the marriage, and if you got an inheritance while married that you kept in a separate account, it’s yours alone. 

Gray areas exist, and they can lead to fights. Develop a list of items you think belong to you alone, and be prepared to discuss them during the settlement process. 

Retirement accounts 

Statements from IRAs, pension plans, and other retirement vehicles should be part of your research process. You must also determine when those accounts were opened and how much was placed inside them during the marriage. 

The math can get tricky, and you may need help to collect some of the information. Scheduling a meeting with your plan administrator can help you collect all of the pieces you need. 

If you choose to split an account with your partner, you’ll need specialized paperwork filed with the retirement company. It’s a time-consuming process, and you’ll typically need someone like a lawyer to help you get started. 

You could also trade the retirement benefits for something else, like complete control of the family boat or vacation home. It may be quicker and more efficient to do so, but you’d need to know how much each item is worth to ensure the trade is equitable. 

Child custody and support 

People with children must answer core questions about the future. Where will the child live? Who makes decisions about their lives, such as where they go to school? How much does each party pay to keep the kids fed, clothed, insured, and educated? 

In most states, courts either work up or approve parental plans. In Oregon, for example, courts can help assign placement based on factors like the following:

  • The child’s religion
  • Where the child goes to school 
  • Where the child lives now 

Courts try to preserve parental relationships and avoid taking a child away from one parent. But clear negotiations can make the difference in maintaining a successful co-parenting partnership in the future. 

Consider drawing up potential visitation schedules, including weekends and holidays. If one parent will maintain sole custody, determine how much the other should pay to support the child. 

Earning potential 

Income disparities can make life after divorce difficult. If one spouse gave up career opportunities to support the other or was injured during the marriage and now can’t work, spousal support payments should be both fair and compassionate. 

In states like Texas, alimony or spousal support isn’t required for all divorces. Instead, courts look at factors like the following when determining if they are appropriate:

  • Duration of the marriage
  • Age of both parties
  • Signs of abuse or neglect 

Think hard about the cost and impact of setting up two households. If one party won’t have enough after divorce, determine how long payments might last. Would a year or two help the person get a better job? Would longer make sense? 

Spousal support discussions can be contentious. The more proof you have to support your position, the more likely it is that you’ll get your spouse’s agreement. 

Debts and liabilities

The average American household has about $128,824 in debt. During your divorce, you must split the payback responsibilities fairly. 

Statements from the following organizations may help:

  • Credit card companies 
  • Mortgage organizations 
  • Home improvement loan creditors
  • Business loan companies 
  • Car loan companies 
  • Student loan providers 

You could split each loan in half, or you could trade them. For example, one party might pay the credit card bill while the other tackles the car loan. You can’t make these trades without a clear picture of what you owe.

Financial infidelity can complicate the process. If one person racked up the debts without the approval of the other, you’ll need to discuss those issues. The more proof you have of the deception, the easier those conversations will be.

Tax consequences

Some decisions made during a divorce settlement come with tax consequences. For example, the IRS won’t bill you for capital gains stemming from property transfers conducted during a divorce, but you may need to report these items as gifts with a completely separate form. 

Similarly, if an IRA is transferred due to a divorce, it isn’t considered taxable. But if your spouse writes you a check for your share, the case might be different.

It’s smart to consult with an expert before you make final decisions about any part of your estate. A financial planner or accountant could help you determine the right approach. 

Insurance coverage

Some marriages consist of one party who works and one who does not. During divorce, the uninsured person must get some kind of insurance. And children need policies, too. Life insurance policies can come with the same questions. 

Gather your current policy documents. Look for terms about coverage ending and cash value. You’ll need to decide what to do with these plans. 

You could ask one party to pay for health insurance for the children. You could also ask to remain on a life insurance policy. Trading something else in response could be smart. Prioritize the items that are most important to you, and be willing to give up some of the items that aren’t as significant to you. 

What should you do with this information?

Once you’ve gathered all of the relevant documents and spreadsheets, you must begin negotiations with your partner. Several approaches exist.

People who can communicate clearly despite an impending divorce can sort out matters in one or two private meetings. Schedule a time and place to talk, and work out the details as calmly as possible. 

If you get stuck on a tricky item (like life insurance plan benefits), a mediator could help. A mediator is an impartial third party trained to help people resolve conflicts and come to a fair understanding. You could schedule a short meeting to discuss just one or two pieces and then fill out a settlement accordingly. 

If you can’t work with your spouse, a mediator can help in this situation, too. This professional can guide your conversation from the beginning so you discuss everything clearly and carefully. 

Mediation is a cheaper and easier solution than going to court, but both people must be willing to work through the process.

If you can’t come to an independent divorce settlement, you will be forced to split your assets through a divorce case in court. The process is long, expensive, and often traumatizing. Most people decide to do all they can to stay out of court, which includes negotiating with their spouse.

At Hello Divorce, we offer a wealth of mediation resources as well as hourly sessions with certified mediators who can help you and your spouse work out your marital settlement agreement. To learn more, schedule a free 15-minute call.


Gather and Share Financial Information. Judicial Branch of California. 
Marital Property. (March 2022). Cornell Law School. 
Custody and Parenting Time. State of Oregon Judicial Department. 
Spousal Maintenance (Alimony). (January 2023). Texas Law Help. 
The State of Household Debt in the U.S. (June 2023). USA Facts. 
New Study Shows Interest in Life Insurance at All-Time High in 2023. (April 2023). LIMRA. 
Publication 504 (2022), Divorced or Separating Individuals. IRS.

Divorce Specialists
After spending years in toxic and broken family law courts, and seeing that no one wins when “lawyer up,” we knew there was an opportunity to do and be better. We created Hello Divorce to the divorce process easier, affordable, and completely online. Our guiding principles are to make sure both spouses feel heard, supported, and set up for success as they move into their next chapter in life.