“I just want what’s fair – no more and no less.”
“How do I know if I’m getting a fair deal in my divorce settlement?”
Can you relate? Even if you and your spouse are aligned in the desire to keep lawyer fees down and your divorce out of court, a settlement agreement rarely comes easily. If you’ve been married a long time and have assets, kids, pets, etc., there is a lot to sort out. And wanting a fair divorce and actually figuring out what is fair in a divorce settlement are two entirely different matters. So, where do you start?
1. Give and take
First, remind yourself throughout your divorce that you need to balance two main interests. You should regularly evaluate what is fair (or not) with these two things in mind:
- The goal of an empowered divorce
- Your desire to avoid a long, messy, bitter divorce
It is possible to set yourself up for a better next chapter without having to fight it out in court and spend thousands of dollars on legal fees. It is possible to save money, time, and effort and get your needs met without being a total pushover. But you must balance getting the things you truly need while compromising on things that aren’t quite as important. “Fair” means all parties are treated justly. You can’t have it all – if you insist, you’ll end up in court. Give and take is key.
How do you negotiate fairly?
Start with our blog focused on strategies to get to a fair agreement to prepare yourself for negotiation. Once you have the information you need (i.e., your income, assets, and debts), you can discuss how things will get resolved.
2. Get aligned with your spouse
Next, see if you can come to an agreement that doesn’t necessarily comport with the law but feels fair to both of you. When you and your spouse negotiate directly with each other (or through a mediator), the divorce settlement you reach becomes your agreement. It’s not something forced down your throat by a well-intentioned (but uninformed) judge. It's also not something you're pushed to sign because you can’t afford to pay for your lawyer to bicker back and forth anymore.
Suggested reading: A Beginner's Guide to Divorce Mediation
As a result of defining what is fair to both of you, you both are much more likely to abide by the agreement (no fighting over it later in court). Ultimately, this gives you the power to shift the narrative. It awards you both with more control. And, determining what looks fair to both of you is especially important if you are co-parenting after divorce.
Here are a couple of examples of Hello Divorce clients who chose something different from the default marital law:
- Couple A: Married for a relatively short time, they each paid their own expenses the whole time. One chose to save more while the other chose to spend money. When divorced, they each took responsibility for their own assets and debts.
- Couple B: They were married for a long time. One spouse was risk-averse, and the other spouse liquidated their retirement account to try out a risky endeavor – and lost that money. During their divorce, they both agreed to something other than an equal 50/50 split.
In summary, these couples both came to “fair to us” agreements and stayed in control of their decisions as opposed to leaving it up to the court and probably not receiving a result they both felt was fair. Sounds simple, right? It can be, but these types of agreements only work when both spouses are aligned.
What if you and your spouse disagree on what’s fair?
What if you each have different ideas of what’s fair and aren’t making any progress in achieving a resolution? If both of you get familiar with basic divorce law, it’ll help you manage expectations. There’s nothing like learning that if you go to court, the judge is almost 100% certain to award your spouse 50% of your pension to get you to agree to your spouse’s request for 40%.
It might not be exactly what you want, but reaching fair decisions together vs. letting the court decide almost always gets you more of what you want.
In other words, understanding the basics of divorce law can help shape your negotiations. This knowledge can help you to come to an agreement because you will understand what will likely happen if you don't. Many Hello Divorce customers work out a marital settlement agreement that differs from actual divorce law. After all, divorce law is complicated (it’s not something we learn in school!), and it doesn’t always provide a result that makes sense for both parties.
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Example of unfair law vs. fair agreement
Unfair law: The court requires you to pay spousal support monthly.
Problem: If your income/cash flow is tight, it might make it impossible to support your household and your ex for some months.
Fair out-of-court agreement: A spousal support "buyout" might be a better solution for both of you. For example, instead of splitting proceeds from the sale of your house 50/50, consider assigning more than 50% to the supported spouse to help them pay for household expenses.
3. Understand basic divorce laws
Every state has different divorce laws, and almost every judge interprets those laws differently. That’s not helpful, is it? The good news is you don’t have to have an agreement that perfectly lines up with the law. In fact, sometimes the law is so rigid that agreeing to what the law says would be bad for both of you.
I always advise that you use the law as a guide only – especially if your ex’s expectations are totally out of whack. Don’t hold yourselves to a perfect interpretation, or you’ll find yourselves bickering back and forth for what feels like an eternity.
Below is a very general guide to divorce laws in the U.S. It’s not perfect, but it doesn’t have to be. It should help you with some parameters around an agreement.
If you want to know the specific divorce law in your state, schedule a meeting with a legal coach.
What to know about asset and debt division
Whether you are in a community property state like California or Texas or an equitable state like New York, generally, property is considered jointly owned if you purchased it during your marriage (except if you have a postnup or prenup).
Example: If one spouse used their employment income to buy a car during the marriage, that car is jointly owned. It doesn’t mean they have to sell it and split the proceeds; it means one spouse can keep it, and the other can keep something else of similar value. Or, one spouse could take on a credit card bill to offset half of the car value.
Example: A couple bought a home during their marriage using one spouse's inheritance as the down payment. It’s usually considered reasonable that the spouse who contributed their inheritance money should get that down payment back before the rest of the sale proceeds are split (assuming there’s enough equity in the home). Note: Different states have different rules about whether you get that inheritance back.
Equal property division and equitable property division
Basically, there is equal property division and equitable property division. "Equal" is a 50/50 division; "equitable" strives for a fair division of assets that is not always 50/50.
In divorce, some assets get special treatment (like student debt), but most will likely be divided equally.
Sometimes, other factors come into play that result in an unequal division. Here are some factors to consider:
- Age and health of the spouses
- Assets and debts
- Earning power and tax implications
- Income
- Marriage length
- Property and value
What to know about child support
Child support is meant to help cover food, shelter, and clothing expenses for children of divorce. While most judges will allow couples to make their own child support agreement, they tend to scrutinize proposed child support agreements more than other proposed agreements.
Most states have child support guideline formulas, and these are presumptively correct. You can use Hello Divorce's worksheets to calculate support, or we can do it for you.
If you don’t want to use your state's guidelines, think through as many expenses as possible to avoid disagreements later. Plan or budget now and going forward. When deciding what is fair, take into account the timeshare each of you has with the kids, your income, and your differences in parenting. Required expenses like medical, dental, and education are usually shared. Consider how you will each cover other necessary expenses such as school uniforms, food, bedroom essentials, and clothing.
Also think about more "optional" childcare expenses, such as private school tuition and extra-curricular activities. Since those are usually more discretionary, you might need to give up your request to get your spouse to pay for half of a new extracurricular you want your child to start.
What to know about spousal support
Support is usually awarded when there’s a longer-term marriage and a significant discrepancy in income. Spousal support is not ordered in every case. Instead, one party must request it and the parties either agree or the court can make a decision on whether to award it. Think through how much, and for how long. The goal is to get the spouse self-supporting.
Temporary spousal support vs. permanent spousal support
Sometimes, a spouse only needs temporary support during the marriage, before the divorce is finalized. Most Hello Divorce customers avoid this by sharing expenses until their divorce is finalized. But achieving that can be problematic when there is a lot of conflict.
Sometimes, spouses start nickel and diming, or they want a full account reconciliation of expenses before the divorce is final and assets are split. If you begin your divorce with conflict over expenses and cannot agree on how expenses will be paid, it’s a good idea to meet with a mediator or financial advisor – a neutral expert who can work with one or both of you.
More “permanent” support is more difficult to calculate. But a good certified divorce financial analyst (CDFA), mediator, or lawyer can give you a sense of what to expect. The court considers lots of factors when determining duration and amount – usually spouses’ age, physical health, emotional well-being, and financial condition. The length of the marriage is typically considered along with state laws.
Additionally, the court may consider the standard of living the couple enjoyed during the marriage, the separate property interests of each spouse, whether child support is awarded, the ability of the higher-earning spouse to provide support, and the amount of time it would take the recipient spouse to receive education or training to boost their skills and become self-sufficient.
When to seek expert help with divorce negotiations
Sometimes, you want to work out what’s fair but need an expert’s guidance in your negotiations. I always advise you to seek help from a mediator, CDFA, or lawyer in the following situations.
- You fear you’ll agree to something against your best interests. (lawyer)
- Your spouse’s expectations are completely unreasonable, and someone needs to tell them that. (mediator)
- You or your partner criticize or blame each other instead of tackling the issues that need resolution. (mediator)
- Your words or behaviors are hostile. (mediator)
- Your spouse won’t listen, or you are otherwise unable to get your point across. (mediator)
- You cannot see eye-to-eye. (mediator)
- One of you is extremely arrogant or manipulative. (mediator or lawyer)
- One or both of you lean toward all-or-nothing thinking. (mediator or lawyer)
You don’t need to have an agreement in place to get the divorce process started. Go into your divorce and your negotiations with positive intentions, and move step by step. Progress is progress, no matter how small. You’ve got this.
And if you need some help along the way, our team of experienced divorce finance experts, mediators, and legal coaches are available at affordable flat rates. If you want to learn more about our services, schedule a free 15-minute call with one of our friendly and knowledgeable account coordinators.
