During a divorce, spouses may decide to enter into a Property Settlement Agreement (PSA). A PSA is a legally binding contract that specifies the terms and conditions of the marriage dissolution as well as the property rights of each spouse once the divorce has been finalized. PSAs often include information regarding the division of assets, alimony payments, and child support and custody agreements. They may also explain the way in which certain assets may be liquidated in order to cover the couple’s joint debt or outstanding financial obligations.
Negotiating a PSA has several important benefits. First, rather than engaging in expensive, stressful, and time-consuming litigation, a PSA allows the parties in a divorce proceeding to negotiate and bargain for the things that are important to each of them. This often results in a fair agreement with which both parties can be happy. Furthermore, a PSA also provides each party with some level of certainty as to what he or she can expect following the conclusion of the divorce proceedings. Once a PSA is incorporated into a final judgment of divorce, the court recognizes that the divorcing spouses are legally bound by the terms enumerated in the PSA. A violation of these terms could lead to future legal consequences for the party in breach of the agreement.
Although it constitutes a legally binding contract, the terms of a PSA can be modified after the divorce has been finalized. Like child support modifications, however, PSAs require that there be a substantial change in circumstances warranting such modification. A substantial change in the circumstances is something that has an effect on either party’s ability or need with regard to one or more of the PSA terms. For instance, if a PSA requires one spouse to pay alimony, this requirement or the amount of the payment may be later modified if that spouse loses a job or earns a significantly different salary than what he or she was receiving at the time of the divorce.
A PSA can have a large impact on your life after a divorce. Because it is such an important document, it is critical that you are actively engaged in the creation of your PSA with an experienced family law attorney on your side. With a lawyer’s help, you can both preserve your current best interests and ensure that your PSA addresses future issues that may arise once the divorce has been finalized.