16: The Separation Agreement

Spousal Support (Maintenance)

• Is either spouse (or are both spouses) waiving the right to spousal support from the other spouse?
• If one spouse will be paying spousal support to the other spouse
  • How much will be paid (fixed amount, percentage, or other provision)?
  • On which date will it start being paid (should be on or after the date the agreement is signed, or the date of the final hearing)?
  • How should payments be scheduled? Include specific payment provisions (day of the month/frequency of payment).
  • How long will it be paid (a number of years, typically)?
  • What types of events will result in payment termination (remarriage, cohabitation, death of payee, or other appropriate conditions)?
  • What is the method of payment? Remember, in Wisconsin, except in certain circumstances payments must be made to the Wisconsin Support Collections Trust Fund through an income assignment from the payer’s employer – employer information may also be needed.
  • Do the parties desire the payer to have life insurance or other security for future payments?
• Modification of spousal support
  • Do the parties want to waive a future right to seek modification?
  • Do the parties want to limit the circumstances (beyond just a change in circumstances) under which a modification may be requested?
• If spousal support was previously ordered
  • Has the payor paid all spousal support as ordered?
  • If not, what arrangements are being made to bring the arrearage current?
• Income tax returns
  • What income tax returns will be filed after the separation but before the divorce?
  • Will a tax professional be hired, and if so, how will that person be selected?
  • If previous tax returns have not been filed, is a hold harmless clause necessary?
• Agreement by the parties to exchange financial information (state and federal income tax returns, W-2s, 1099 forms, paycheck stubs, etc.) by a specific date each year (this usually is tied to federal tax filing deadlines and is often May 1 of each year).

Property Division

• List all of the personal property owned by either spouse individually, indicating who is to receive possession of it.
  • Household furnishings, appliances, and other items (general categories are sufficient; each item does not need to be listed separately, unless it has an unusually high value).
  • Automobiles and other motor vehicles, including make, year, and model. Include VIN# as well.
  • Financial accounts, investments, and retirement assets, such as checking and savings accounts; securities such as mutual accounts, stocks, and bonds; pension/retirement accounts such as IRAs, 401k plans, profit sharing, and deferred compensation; life insurance (including name of financial institution/company and other details sufficient to identify particular items).
  • Other high-value items of personal property (antiques, collectibles, art, etc.).
• Do any items of personal property still need to be exchanged by the parties? If so, include details as to when and how the exchange will occur.
• List all of the real property owned by either spouse individually, indicating who is to receive possession of it and details of how the title will be transferred to that individual (if necessary).
• If real property is to be sold
  • Who will occupy or use it until the sale is completed?
  • How will the property be sold (by the owner or through a real estate agent)? If a real estate agent is to be hired, how will that agent be selected, and who will be responsible for decision-making and communication with the agent?
  • Who will be responsible for paying taxes, mortgage, and insurance until the sale is completed?
  • Who will be responsible for necessary repairs or other sale-related expenses?
  • How will the sale proceeds be divided?
• Business interests of each spouse
  • List business assets, including real property and personal property owned by the business
  • Who will make management decisions during the separation and after the divorce?
• Valuation of property other than “ordinary” household items and personal effects, including whether a professional appraiser should be used and how that person would be selected.
• Will any payments be required to equalize the marital property division between the parties?
  • If so, who is to make the payment, when, and how?
  • Will interest be incurred on any payment due but not paid as of the date the separation agreement is to be signed?

Debts and Liabilities

• List all individual and business debts and liabilities owed by either spouse or by both of them, including
  • Name of the creditor
  • Balance owed
  • When and why the debts were incurred
  • Whether the debts are secured (such as by a mortgage or a lien on property)
• Who will be responsible for paying each debt?
• Include hold harmless clauses stating
  • The parties agree that the party assigned a debt will be solely responsible for paying the debt and will not seek payment from the other party
  • The parties agree that if a creditor seeks payment from the party to whom the debt was not assigned, the party to whom the debt was assigned will reimburse and indemnify the other party (remember, creditors are not bound by the terms of a separation agreement or judgment assigning debts)
  • Any party who suffers a loss because of a failure of the other party to pay an assigned debt may enforce that obligation by a motion or an order to show cause for contempt of court.

Child Custody (If Applicable)

• Who will have legal custody (remember, Wisconsin presumes the parents will have joint legal custody)?
  • How will the parties communicate/consult regarding major decisions?
  • How will the parties resolve disagreements with respect to major decisions regarding the children?
• It can be helpful to refer to the parties’ proposed parenting plans, or even to include the final parenting plan agreed to by both parties as an attachment to the separation agreement. (See Chapter 13 and the forms linked in that chapter)

Child Physical Placement (If Applicable)

• Will physical placement be shared or primary/secondary (remember, Wisconsin presumes the parents will have shared physical placement)?
• If a parent receives less than 25% physical placement, what are the specific reasons that this is in the child(ren)’s best interest?
• Specify the schedule of physical placement for the children (or for each child, in the event of split physical placement) including
  • How and where will exchanges take place?
  • Who will pay transportation expenses, if any?
  • Who will have physical placement on “holidays” or “special days” (summer vacation, birthdays, Mother’s Day/Fathers’ Day, etc.)
  • Do the parties have agreements regarding moving the child to a different city or state temporarily or permanently?
  • Does anyone else have visitation with the child(ren), for example, grandparents?
  • How will the child’s communication with the parent, not having physical placement, occur/be facilitated?
• Do the children require regular daycare/child care? If so, how will the parties select a daycare provider, and how will the cost be divided between the parties?
• Again, it can be helpful to refer to the parties’ proposed parenting plans, or even to include the final parenting plan agreed to by both parties as an attachment to the separation agreement.

Child Support (If Applicable)

• What is the standard child support calculation applicable to the parties, based on income, number of children, and physical placement?
  • What is the result of applying this calculation to the parties (who will pay how much)?
  • Will there be a deviation from the standard? If so, how much, and what are the reasons supporting the deviation?
• Method of payment (remember, in Wisconsin, except in certain circumstances payments must be made to the Wisconsin Support Collections Trust Fund through an income assignment from the payer’s employer – employer information may also be needed).
• Do the parties desire the payor to have life insurance or other security for future payments? If so, do the beneficiaries of existing life insurance policies need to be changed?
• Children’s medical and health care expenses
  • Who is responsible for obtaining health care coverage (including medical, dental, vision, orthodontic, psychiatric, prescriptions and other coverages)?
  • Agreement by the parents to provide copies of insurance policy information and insurance cards to each other and to the child support agency.
  • Agreement by the parents to notify each other and the child support agency of any changes in employment and the availability of insurance.
  • If only one parent is providing health care coverage, will the other party reimburse that parent for the difference in cost between single and family coverage? If so, how much contribution shall be paid, and when?
  • If neither party has access to private health insurance for the child(ren) at a reasonable cost, who is responsible for enrolling/applying for public health insurance?
  • How will the parties divide uninsured health care expenses (including amounts applied to deductibles, copays, or other expenses not covered by insurance)?
  • What are the terms for reimbursement between the parties? What notification is required, and what is the deadline for reimbursement (usually requests for reimbursement must be made in writing, and the other party has a certain number of days after that request to make payment)
• How will the parties divide the children’s variable expenses (school supplies, extra-curricular activities, etc.)?
  • Include agreement as to how decisions will be made regarding extra-curricular activities, driver’s licenses, and how those decisions will relate to who pays the cost of those items.
  • What are the terms for reimbursement between the parties? What notification is required and what is the deadline for reimbursement (usually requests for reimbursement must be made in writing, and the other party has a certain number of days after that request to make payment)
• Do the parties agree to pay child support or other expenses after the child graduates high school or reaches the age of 19 (for example, college expenses, health care expenses)?
• If child support was previously ordered
  • Has the payor paid all child support as ordered?
  • If not, what arrangements are being made to bring the arrearage current?
• Income tax returns
  • Who will be allowed to claim the child(ren) as dependent for income tax purposes?
  • Include an agreement by the parties to cooperate in signing IRS Form 8332 or other appropriate state or federal forms necessary to effectuate their agreement
• Agreement by the parties to exchange financial information (state and federal income tax returns, W-2s, 1099 forms, paycheck stubs, etc.) by a specific date each year (this usually is tied to federal tax filing deadlines and is often May 1 of each year).
• Again, it can be helpful to refer to the parties’ proposed parenting plans, or even to include the final parenting plan agreed to by both parties as an attachment to the separation agreement. (See Chapter 13 and the forms linked in that chapter)

Attorney Fees and Court Costs

• Usually, each party is responsible for paying their own attorney fees relating to divorce proceedings.
• How will the parties divide other costs relating to the divorce (for example, psychological evaluations or other appraisal costs not already covered in the agreement, filing fees, deposition fees, etc.)?

Conflict Resolution

• What method(s) (mediation, arbitration, etc.) will be used to resolve disputes after the agreement is signed and approved by the court?
• If a third party is to be used for conflict resolution, how will that party be selected and paid?

Enforceability Clauses

• Similar to prenuptial agreements, separation agreements should contain clauses confirming it was signed voluntarily, after complete and accurate financial disclosure between the parties, and with the opportunity to seek independent legal counsel (see Chapter 4).
• Typically, the parties also agree that the separation agreement should be incorporated into and merged into the final divorce judgment

The above are just some of the clauses that the parties should consider including in their separation agreement. Below are links to some sample agreements

• Wisconsin marital settlement agreement with minor children
• Wisconsin marital settlement agreement without minor children
• Sample form from eForms.com