In a divorce settlement, you can ask for a share of marital property and debts, spousal support, custody and a parenting schedule, child support, part of your spouse’s retirement accounts, the family home or the proceeds from its sale, continued health coverage, the right to claim the children on your taxes, life insurance that protects future payments, help with your attorney’s fees, and restoration of your former name. The decree is a court order both of you must follow, so what gets written into it carries far more weight than any informal understanding you reach along the way.
A Share of Marital Property and Debts
The biggest piece of most settlements is splitting what the couple owns and owes. Assets fall into two buckets. Marital property generally includes everything acquired by either spouse during the marriage. Separate property covers what you owned before the wedding, along with inheritances or gifts received by one spouse alone. The line sounds simple, but it gets murky when, for example, one spouse uses an inheritance to renovate a jointly owned home.
How the marital pile gets divided depends on where you live. About 41 states follow equitable distribution, where a judge divides assets in a way the court considers fair, though not necessarily 50/50. The remaining nine states use community property rules, which generally treat everything earned during the marriage as jointly owned and split it equally.
Common items on the table include the family home, vehicles, bank and investment accounts, retirement funds, and business interests. Debts from the marriage, such as mortgages, car loans, and credit card balances, also get allocated. Both spouses must complete detailed financial disclosures listing everything they own and owe. If you suspect your spouse is hiding assets or understating a business’s value, you can ask the court to appoint a forensic accountant to look through bank records, tax returns, and business books.
The Joint Debt Trap
Here is something that catches people off guard: a divorce decree does not bind your creditors. Your settlement might say your ex is responsible for a joint credit card, but the credit card company can still come after you if your name is on the account. The Consumer Financial Protection Bureau is blunt about this. Sending creditors a copy of your divorce decree does not end your responsibility on a joint account, and taking your name off a home title does not remove your name from the mortgage.1Consumer Financial Protection Bureau. Can a Debt Collector Contact Me About a Debt After a Divorce? If you can, negotiate to have joint debts paid off or refinanced into one spouse’s name alone before the decree is finalized.
Tax-Free Property Transfers
Transferring property between spouses as part of a divorce does not trigger a taxable gain or loss. Federal law treats these transfers like a gift, meaning the receiving spouse takes the property at the same tax basis the other spouse had.2Office of the Law Revision Counsel. 26 USC 1041 – Transfers of Property Between Spouses or Incident to Divorce That basis matters when you later sell the asset, so keep records of what the property was worth when your spouse originally acquired it.
Spousal Support
You can request spousal support, often called alimony, if you earn less than your spouse or stepped away from the workforce during the marriage. The purpose is to help the lower-earning spouse maintain a reasonable standard of living, at least for a time. Support is not automatic and has to be justified based on your situation.
Several types exist. Temporary support covers expenses while the divorce is pending. Rehabilitative support lasts a set period so you can finish a degree or get job training. Permanent support, increasingly rare, may be awarded after long marriages where one spouse has limited ability to become self-supporting.
Courts weigh the length of the marriage, each spouse’s income and earning potential, age, health, and non-economic contributions such as raising children or running the household. A spouse who put a career on hold so the other could build a business will generally have a stronger case than someone who earned a comparable salary throughout the marriage.
How Alimony Is Taxed
For any divorce or separation agreement executed after 2018, the payer cannot deduct spousal support payments on their federal taxes, and the recipient does not include the payments in gross income. Older agreements signed before 2019 still follow the prior rules, where alimony was deductible for the payer and taxable to the recipient, unless both parties modify the agreement and explicitly adopt the new treatment.3Internal Revenue Service. Topic No. 452, Alimony and Separate Maintenance
Custody and a Parenting Plan
When children are involved, you can request specific terms covering two separate pieces: legal custody and physical custody. Legal custody is the authority to make major decisions about your child’s upbringing, including education, healthcare, and religious instruction. Physical custody determines where the child lives day to day. Either type can be awarded solely to one parent or shared.4Justia. Physical vs. Legal Custody
A parenting plan spells out the practical details: weekly schedules, holiday rotations, vacation time, and how parents will communicate about decisions. Clear language matters here, because vague terms breed future conflict.4Justia. Physical vs. Legal Custody You can also request a right-of-first-refusal clause, which requires the parent who has the child to offer the other parent a chance to take over before calling a babysitter or relative. Courts do not grant this automatically, and some judges will decline it when the parents cannot cooperate well enough to make it work.
Every custody decision is governed by the best interests of the child standard, which means a judge will prioritize your child’s safety, stability, and well-being over either parent’s preferences.5Justia. Physical vs. Legal Custody – Section: How Do Courts Make Custody Decisions? Courts look at each parent’s living situation, the child’s relationship with each parent, and any history of domestic violence.
Child Support
Child support is a recurring payment from one parent to the other to cover the costs of raising your children. It is the legal right of the child, not the parent, which means neither spouse can agree to waive it.
Every state uses a formula that factors in each parent’s income, the number of children, and how much time the child spends with each parent. Because the formulas vary by state, two families with identical incomes can end up with different support amounts depending on where they live. Beyond the base calculation, courts can order additional contributions for health insurance premiums, uncovered medical and dental expenses, childcare costs, and sometimes private school tuition or extracurricular activities.
Child support typically lasts until the child turns 18 or graduates from high school, though some states extend it through college.
A Share of Retirement Accounts
Retirement savings are often a couple’s most valuable asset after the family home, and dividing them involves separate rules for different account types.
Employer Plans: 401(k)s and Pensions
Dividing an employer-sponsored retirement plan such as a 401(k) or pension requires a Qualified Domestic Relations Order, or QDRO. The QDRO is a court order directing the plan administrator to pay a portion of the participant’s benefits to the other spouse.6Internal Revenue Service. Retirement Topics – QDRO: Qualified Domestic Relations Order Without one, the plan has no legal obligation to pay your ex anything, no matter what the decree says.
The QDRO must specify each person’s name and address and state the exact amount or percentage to be paid. It cannot award benefits the plan does not offer. Once the order is approved, the receiving spouse can roll the funds into their own retirement account tax-free or take a distribution, which would be taxable as income.6Internal Revenue Service. Retirement Topics – QDRO: Qualified Domestic Relations Order If a QDRO distribution is paid to a child or dependent rather than a spouse, the plan participant pays the taxes on it.
IRAs
Individual Retirement Accounts do not require a QDRO. Federal law allows a tax-free transfer of IRA funds between spouses as long as the transfer is required by the divorce decree or settlement agreement and the funds move directly from one spouse’s IRA to the other’s.7Office of the Law Revision Counsel. 26 U.S. Code 408 – Individual Retirement Accounts If you skip this step and simply withdraw the money to hand over, the account holder will owe income taxes plus a 10 percent early withdrawal penalty if under 59½.
The Family Home
You can ask to keep the marital home, request that it be sold and the proceeds split, or negotiate exclusive use of the home for a period, often until the youngest child finishes school. Each option has different financial consequences.
If the home is eventually sold, each spouse may be able to exclude up to $250,000 of capital gain from their taxes, provided they owned and used the home as a primary residence for at least two of the five years before the sale. A married couple filing jointly can exclude up to $500,000 if both spouses meet the use requirement. The two years of ownership and use do not need to be consecutive, but you cannot have claimed this exclusion on another home sale within the prior two years.8Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence
The spouse who moves out before the sale needs to watch the clock. If you leave and more than three years pass before the sale, you may no longer meet the two-out-of-five-year use requirement and could lose the exclusion entirely.
Health Insurance After Divorce
If you are covered under your spouse’s employer health plan, divorce is a qualifying event under COBRA that entitles you to continue that coverage for up to 36 months. You must notify the plan administrator within 60 days of the divorce to preserve this right.9U.S. Department of Labor. FAQs on COBRA Continuation Health Coverage for Workers COBRA premiums can be steep because you pay the full cost without an employer subsidy, so factor that into your negotiations.
You can also ask the court to order your spouse to maintain health coverage for you for a specific period or to cover the children’s premiums. For children specifically, a court can issue a Qualified Medical Child Support Order requiring the employer’s plan to cover the child. Your settlement should spell out who provides the children’s insurance, who pays the premiums, and how out-of-pocket medical costs get shared.
Who Claims the Children on Taxes
Only one parent can claim a child for the child tax credit and dependency exemption in any given year. By default, the custodial parent, meaning the one the child lives with for the greater number of nights, gets the claim.10Internal Revenue Service. Claiming a Child as a Dependent When Parents Are Divorced, Separated or Live Apart
The custodial parent can sign IRS Form 8332 to release the dependency claim to the noncustodial parent. That release transfers the child tax credit but does not transfer the earned income credit, dependent care credit, or head of household filing status, all of which stay with the custodial parent regardless.10Internal Revenue Service. Claiming a Child as a Dependent When Parents Are Divorced, Separated or Live Apart Many couples alternate years or split children so each parent gets some tax benefit. Writing this into the decree avoids an annual argument.
Life Insurance to Secure Support
You can ask the court to require your spouse to maintain or purchase a life insurance policy naming you or your children as beneficiaries. Courts frequently order this as a safety net to protect future child support or alimony payments. If the paying spouse dies, the insurance proceeds replace the income stream that would have continued. Your settlement should specify the minimum coverage amount, who pays the premiums, and a requirement that the policyholder provide periodic proof the policy is active.
Help With Attorney’s Fees
You can ask the court to order your spouse to cover some or all of your legal costs. Judges evaluate these requests by comparing each spouse’s financial resources. If one spouse controls most of the income or marital assets, a judge may order that spouse to contribute to the other’s legal fees so both sides can participate in the process on reasonably equal footing. This is not guaranteed, and many courts are selective about granting it, but the request is worth making when there is a genuine financial imbalance.
Restoration of Your Former Name
If you changed your last name when you married, you can ask the court to restore your former name as part of the divorce decree. This is one of the simplest requests in a divorce and is almost always granted. Having it in the decree gives you an official court order to present when updating your driver’s license, Social Security card, bank accounts, and passport.
Something You Cannot Request: Social Security
If your marriage lasted at least 10 years, you may be eligible to collect Social Security benefits based on your ex-spouse’s earnings record, and doing so does not reduce their benefit or affect their current spouse’s benefit.11Social Security Administration. Can Someone Get Social Security Benefits on Their Former Spouse’s Record? This is not something that goes into the divorce decree, because it is a federal entitlement rather than something a state court can award or deny. The 10-year threshold does matter when you are weighing whether to finalize a divorce just short of that mark.
Enforcement and Future Modifications
A divorce decree is a court order, and violating it carries real consequences. If your ex stops paying support, ignores the custody schedule, or fails to transfer property as ordered, you can file a motion for contempt of court. Penalties range from fines and wage garnishment to, in extreme cases, jail time. For unpaid child support specifically, enforcement agencies can intercept tax refunds, suspend driver’s or professional licenses, and place liens on property.
Life changes after the decree is signed, and the law accounts for that. Either parent can ask the court to modify child support or custody if circumstances change substantially, such as a major involuntary income loss, a serious health condition, or a significant change in the child’s needs. The bar for modifying spousal support is generally higher, particularly if the support terms were part of a negotiated settlement rather than imposed by a judge. In either case, you must file a formal petition. You cannot simply stop paying because your situation changed.