Is a Property Settlement Agreement Necessary in New Jersey?
Many clients come in asking if it’s possible to prepare what is called a separation agreement or property settlement agreement. Separation agreements are now referred to as property settlement agreements and will generally be a much less costly process than one in which you conduct discovery and then litigate, or have a trial in which the court determines how the assets are going to be split.
A property settlement agreement will generally be negotiated between the parties after either full or limited discovery. In some instances, the parties may be trying to avoid spending a lot of money on counsel fees and all of the other fees incurred in the process of pursuing adequate discovery of each of the parties’ assets. They may simply know. It may be that both parties are regular employees who don’t own businesses or receive outside income. In those instances, you can generally know what the real assets of the marriage are simply by looking at the tax returns, bank statements, checking account statements, and 401(k) or pension plans. If there’s a home, they can have the property appraised.
Having done that, the parties can then negotiate a property settlement agreement which would also include other items, such as – maybe most importantly – parenting time, custody, child support, and other items. Once that’s done, finalizing the divorce is a simple matter. The property settlement agreement is reviewed and signed off on by both parties. Then, when the actual divorce is put through, the court will question the parties on the agreement. If the court is satisfied that the agreement was entered into voluntarily and knowingly, the property settlement agreement will be made part of the final judgment of divorce.