How Are Divorce Settlements Calculated?

Before dividing your assets, you must determine whether a property is marital or separate.

divorce settlement agreement is a document where divorcing couples agree on the terms of their divorce. The agreement may cover several issues, including:

  • How the couple will handle co-parenting (if they have children together)
  • Dividing property, debt, and other finances
  • Spousal support

These factors will contribute to calculating the divorce settlement between the separating couple.

This article provides a brief overview of the calculation of divorce settlements.

Marital and Separate Property

Marital property is items acquired during the marriage (the exact definition of marital property may vary depending on the state). Marital property can be either assets or liabilities.

Separate property includes property acquired before the marriage or after separation. Separate property can also include any gifts or inheritance a spouse may receive during the marriage.

State law determines how a judge could divide marital assets during divorce proceedings or what they will look at before agreeing to your separation agreement. In general, you will get to keep your separate property. But if that property was "commingled" during your marriage and is now considered marital property. Understanding what is marital or separate property can be difficult. A divorce lawyer can help you understand your ownership rights during the divorce process.

States usually follow one of two ways to divide the property:

To see how your state defines marital property in divorce cases and which approach your state follows in dividing marital property, please visit FindLaw's State Marital Property Laws article for more information.

Division of Assets in Divorce: Calculation

Some ex-spouses may already have a prenuptial agreement that shows how to divide their property post-divorce. If not, they must develop a fair settlement acceptable to both divorce parties. The parties can create a marital settlement agreement outside of the courts.

Divorcing spouses often choose divorce mediation to craft an agreement outside of court. The parties then file that settlement agreement with the family law court. Family law attorneys and mediators can help with the filing process. A judge will review the agreement for fairness and issue a divorce decree. This court order finalizes the divorce process and validates the settlement agreement.

Apart from the division of property, a divorce settlement will also cover the following:

Child Custody and Visitation

A fair settlement agreement will seek to involve both parents in the child's upbringing. Both parents will likely have equal custodial time unless there are specific reasons why one parent should have more time with the child. You must also agree on visiting/parenting time schedules, considering your schedules and your child's needs.

Child Support

Most states have a child support calculator that helps determine the amount of child support a parent gets. Usually, they take into account the following:

  • The spouses' income
  • Who has physical custody of the child
  • Child care costs
  • Other out-of-pocket costs for the child

A divorce settlement agreement will also consider the above and adjust the child support payments to be fair to both spouses.


Courts may award alimony (or “spousal support") if one spouse depends financially on the other. Courts look into different factors to determine eligibility for alimony. These include:

  • Financial resources of the spouses
  • Education and employment or the employability of the receiving spouse
  • Mental or physical issues that may prevent the spouse from getting a job or being self-supporting

Suppose the divorcing couple cannot agree to alimony or child support amounts. In that case, courts will consider the standard of living for the ex-spouse or child. The standard of living refers to the quality of life enjoyed by the couple or child during the marriage. The courts aim to lessen the financial impact on the dependent spouse or child due to the divorce.

Need Help With Your Divorce Settlement? Speak to an Attorney

There are a lot of complicated legal issues that come with a divorce. Drafting a divorce settlement covering custody, child support, property division, and the like can be very demanding, especially if you and your spouse disagree. Speaking to a divorce attorney is a great place to start to get proper guidance.

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Can I Solve This on My Own or Do I Need an Attorney?

  • You may not need an attorney for a simple divorce with uncontested issues
  • Legal advice is critical to protect your interests in a contested divorce
  • Divorce lawyers can help secure fair custody/visitation, support, and property division

An attorney is a skilled advocate during negotiations and court proceedings. Many attorneys offer free consultations.

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Don't Forget About Estate Planning

Divorce is an ideal time to review your beneficiary designations on life insurance, bank accounts, and retirement accounts. You need to change your estate planning forms to reflect any new choices about your personal representative and beneficiaries. You can change your power of attorney if you named your ex-spouse as your agent. Also, change your health care directive to remove them from making your health care decisions.

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