Property Settlement Agreement: How a Divorce Deal Divides Property and Debt
Reference Guide
A property settlement agreement is a written contract between spouses who are separating. It says who keeps the house, the cars, the accounts and the retirement money, who pays which debts, and whether anyone pays alimony. It is not a class action and nobody files a claim. Once a judge approves it, its terms usually become part of the divorce decree. If you searched this term because of the Jackson County property tax settlement, that is a separate case, covered below.
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What a Property Settlement Agreement Is
Spouses use a property settlement agreement (also called a marital or divorce settlement agreement) to resolve the money side of a divorce themselves instead of asking a judge to do it after a trial.
The free Georgia court form from the Fulton County Superior Court states the purpose plainly: the parties want to settle “all questions of alimony, division of property, debts and all other rights and obligations arising out of their marital relationship.”
A typical agreement covers:
The marital home — who gets the deed and who pays the mortgage and taxes from what date. The Fulton form also lets you set a refinance deadline. If the refinance does not happen by then, the home is listed for sale.
Vehicles — listed by VIN, with the new owner responsible for the loan, taxes, registration and insurance.
Debts — each creditor, the amount and the responsible spouse.
Alimony — a monthly amount and when it ends, or a written waiver by both sides.
Retirement accounts — usually divided by a separate court order, explained below.
Case details
Each state decides how a property settlement agreement becomes binding. Three examples, from the statutes themselves:
Texas (Family Code § 7.006): spouses may sign a written agreement dividing property and liabilities. It can be revised or repudiated before the divorce is rendered. If the court finds the terms “just and right,” they are binding on the court. If not, the court can ask for a revised agreement or set a contested hearing.
Virginia (Code § 20-109.1): a court may affirm, ratify and incorporate the agreement into the decree. Once it does, the agreement is “deemed for all purposes to be a term of the decree” and is enforceable like the rest of the decree.
California (Family Code § 2550): without a written agreement or an oral stipulation in open court, the judge divides the community estate equally. A signed agreement lets spouses choose a different split.
Why This Is in the News: Jackson County, Missouri
In Wheeler v. Beatty, Case No. 2416-CV25478 in the Circuit Court of Jackson County, homeowners challenged 2023 assessments that rose more than 15%. A settlement announced July 23, 2026 is estimated by class counsel at around $250 million, paid mostly as credits on the 2026, 2027 and 2028 tax bills. Local outlets KCTV5 and KSHB reported on October 8, 2026 that a judge had given preliminary approval. Notices are due to more than 207,000 taxpayers by October 19, 2026; Analytics Consulting LLC is the appointed notice and settlement administrator. Requests to opt out must be sent by November 18, 2026. Former owners and people who paid for an appraisal or a lawyer must file by December 3, 2026. The fairness hearing is set for November 23, 2026.
Our Jackson County settlement report has the lookup websites and the 45-day issue for people who moved. Note that it was written on October 1, before that order was reported.
Who Needs a Property Settlement Agreement
Any couple ending a marriage who can agree on how to divide what they own and owe. An agreement is not required: without one, a judge decides after hearing both sides.
Know what is marital and what is separate. California's Family Code § 770 lists separate property: anything owned before the marriage, anything received during it by gift, bequest, devise or descent, and the rents and profits from those assets. The labels and rules vary by state.
Know what you are giving up. The Georgia Northeastern Judicial Circuit form makes each spouse acknowledge a right to trial and a right to discovery that “may reveal other income or assets of the other party.” If you sign without seeing the other side's finances, you lose that check.
Watch for reconciliation. In Virginia, under Code § 20-155, getting back together after signing a separation or property settlement agreement cancels it unless the agreement says otherwise.
Money and Taxes: What the Agreement Changes
Property transfers: under IRS Publication 504 (Internal Revenue Code section 1041), generally no gain or loss is recognized on a transfer to a spouse or to a former spouse when the transfer is incident to the divorce. That means within 1 year after the marriage ends or related to its end. A transfer made under the divorce instrument within 6 years is treated as related. The catch is that the receiver takes over the original tax basis. A house or stock with a large built-in gain is worth less after tax than its price suggests.
Alimony: for agreements executed after 2018, alimony is not deductible by the payer and not taxable to the recipient. Older instruments, executed before 2019, follow the old rules unless they were modified to adopt the new ones. Try the alimony calculator for a rough figure.
Retirement plans: an employer retirement plan or pension covered by ERISA generally needs a qualified domestic relations order (QDRO), which recognizes the former spouse as an “alternate payee.” The agreement alone does not move the money.
How a Property Settlement Agreement Moves Through a Divorce
Step 1 — List Everything
Each spouse lists assets and debts: home, vehicles by VIN, accounts, retirement plans, and creditors with amounts. Official forms warn not to write complete account numbers.
Step 2 — Sort Marital From Separate
State law decides what is divisible. In California, property owned before marriage or inherited is separate property under Family Code § 770.
Step 3 — Draft and Sign
Spouses fill in a court form or have a lawyer draft the agreement. Georgia's circuit forms are signed before a notary, with each spouse stating they signed voluntarily.
Step 4 — Submit to the Court
The agreement is filed with the divorce. In Texas, the court checks whether the terms are just and right. If they are not, it can ask for a revised agreement or set a contested hearing.
Step 5 — Incorporated Into the Decree
Once approved, the terms usually become part of the final decree. In Virginia they are then enforceable like any other provision of the decree.
Step 6 — Carry Out the Transfers
Deeds, titles and refinancing follow by the dates in the agreement. Retirement shares need a separate QDRO before the plan will pay the former spouse.
Three Things to Watch For
Two very different searches share these words, and both attract opportunists:
“Free template” sites that want your data
Free official forms exist, such as those from the Fulton County Superior Court and the Northeastern Judicial Circuit in Georgia. A form from another state may not fit your court. Be wary of sites that ask for Social Security or full account numbers before a download.
Jackson County “refund processing” offers
Current owners get bill credits without applying. Former owners and special-circumstances applicants must submit claims by December 3, 2026. Analytics Consulting LLC is the notice and settlement administrator and retired Judge Dale Youngs runs the Special Circumstances Fund. Use only the contact details in the official court notice.
Signing before you see the numbers
An agreement drafted by one side and pushed for a quick signature is the costliest trap. Once a court incorporates it into the decree, it is hard to undo. Check what the other spouse owns, and the tax basis of each asset, before signing.
Property Settlement Agreement — Questions People Actually Ask
Short answers to the questions people ask most about this case.
How do you write a settlement agreement?
Many courts publish fill-in forms. The Georgia forms from Fulton County and the Northeastern Judicial Circuit work through it section by section: separation, alimony, property division (home, vehicles, other property), debts, a voluntariness statement and notarized signatures. Use your own state's form or have a lawyer draft it, because the rules for approval differ by state.
Is a divorce decree the same as a settlement agreement?
No. The agreement is a contract between the spouses, while the decree is the court's order. Courts commonly incorporate the agreement into the decree. Virginia's Code § 20-109.1 says the incorporated terms are then a term of the decree, enforceable like any other part of it. The Georgia form adds that the agreement also survives as a separate, enforceable contract.
What assets are untouchable during divorce?
Nothing is automatically untouchable everywhere. State law decides. In California, Family Code § 770 makes property owned before marriage, and property received by gift or inheritance, separate property, along with its rents and profits. Mixing separate money into joint accounts can blur that line. Ask a lawyer in your state.
Can I change my mind after signing?
It depends on the state and the timing. In Texas, under Family Code § 7.006, the agreement can be revised or repudiated before the divorce is rendered unless another rule of law makes it binding. In Virginia, reconciling after signing cancels the agreement unless it says otherwise.
Do I pay tax on the property I receive?
Generally not at the time of the transfer, if it is incident to the divorce (IRC section 1041). But you take over your former spouse's tax basis, so you may owe tax when you later sell. See our page on taxes on settlements for other types of payments.
How is a workplace retirement plan or pension split?
Usually through a qualified domestic relations order (QDRO). Under the federal definition, it is an order that recognizes a former spouse's right, as alternate payee, to all or part of the plan benefits. The plan administrator decides whether the order qualifies.
Is the Jackson County property tax settlement a property settlement agreement?
No. It is a class action settlement over 2023 property tax assessments in Jackson County, Missouri. Preliminary approval was reported on October 8, 2026. Former-owner claims are due by December 3, 2026, and the fairness hearing is November 23, 2026. Details are in our Jackson County report.
Do I need a lawyer for a property settlement agreement?
No law requires one, and courts publish forms for simple cases. A lawyer is most useful when there is a house, a retirement plan, a business or debt in both names, because those carry tax and enforcement consequences. Our divorce lawyer cost page covers typical fees.
About This Information
- Editorially Reviewed — Content reviewed for accuracy using published legal research, government data, and verified court records. See our methodology. Reviewed by Leonard Goldberg, Editor · Last updated
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