Divorce Property Settlement Worksheet: How to Draft Your Agreement

A divorce settlement agreement divides everything you built during the marriage: the house, the retirement accounts, the debts, the cars, even the pets. Most agreements fail or get challenged because one or both spouses rushed through the financial inventory.

A worksheet approach — listing every asset and debt with its current value, ownership, and proposed division before you negotiate — prevents the costly mistakes that come from working off estimates and memory.

What Goes Into a Property Settlement

Every settlement agreement covers the same core categories, regardless of your state or country:

Real estate. The family home, rental properties, vacant land, timeshares. For each property: current fair market value, outstanding mortgage balance, whose name is on the title, and the equity position (value minus mortgage).

Financial accounts. Checking, savings, money market, CDs, brokerage accounts, cryptocurrency. Current balance and account holder for each.

Retirement accounts. 401(k), 403(b), IRA, Roth IRA, pension plans, deferred compensation. Current balance, account type, and whether a QDRO will be needed for division.

Vehicles and personal property. Cars, boats, motorcycles, RVs. Current market value (use Kelley Blue Book or equivalent) minus any loan balance. High-value personal property: jewelry, art, collectibles, electronics.

Business interests. Ownership stakes in businesses, professional practices, partnerships, LLCs. These often require professional valuation.

Debts. Credit cards, student loans, auto loans, personal loans, medical debt, tax obligations. Current balance, minimum payment, and whose name is on each account.

Insurance policies. Life insurance cash value (not just death benefit), long-term care policies, annuities.

Building Your Worksheet

For each asset and debt, record these data points:

The classification column is critical. Assets acquired during the marriage are generally marital property. Assets owned before the marriage, gifts, and inheritances are typically separate property — but they can become commingled if mixed with marital funds.

Marital vs. Separate Property

Community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin) divide marital assets 50/50 by default.

Equitable distribution states (all other US states) divide based on fairness, which doesn't necessarily mean equal. Factors include marriage length, each spouse's income and earning potential, contributions to the marriage (including homemaking), and each spouse's financial needs.

The commingling trap: A house bought before the marriage with a separate-property down payment becomes partially marital if mortgage payments were made with joint income during the marriage. Both spouses have a claim — the separate-property portion is the original down payment plus its proportional share of appreciation, while the marital portion includes principal payments and the remaining appreciation.

Calculating commingled equity correctly requires the original purchase price, the separate-property down payment amount, total mortgage principal paid during the marriage, and the current fair market value. Getting these numbers wrong is one of the most common settlement mistakes.

Writing Your Settlement Proposal

Before mediation or attorney negotiation, draft a written proposal showing your preferred division. This doesn't need to be a legal document — it's a negotiation starting point.

Structure it by category:

Proposal for real estate: "Spouse A keeps the family home (123 Main St.) and assumes the remaining mortgage. Spouse B receives an equalization payment of [half the net equity] within 90 days of the decree, secured by a lien on the property until paid."

Proposal for retirement: "Each spouse retains their own 401(k) account. The difference in marital-period contributions [calculated amount] is equalized through a QDRO transferring [amount] from the larger account to the smaller."

Proposal for debts: "Each spouse assumes the debts in their individual name. Joint credit card balances are split equally — Spouse A pays Chase card, Spouse B pays Discover card. Both spouses refinance joint debts into individual accounts within 120 days."

Common Mistakes to Avoid

Comparing pre-tax and post-tax assets as equal. A $200,000 traditional 401(k) is worth less in real terms than a $200,000 savings account because the 401(k) hasn't been taxed yet. Factor in tax implications when proposing "equal" splits.

Forgetting to value pension benefits. A defined benefit pension doesn't have a simple account balance. Its present value depends on the monthly benefit amount, the start date, and life expectancy. An actuary or CDFA can calculate this.

Leaving joint debts on both names. A settlement saying "Spouse A will pay the joint Visa card" doesn't protect Spouse B if Spouse A stops paying. Creditors can still pursue the joint account holder. The settlement should require refinancing joint debts into individual accounts within a specified timeframe.

Not including a deadline for transfers. "Spouse A gets the house" means nothing without a timeline for executing the deed transfer. Specify deadlines for every asset transfer, QDRO filing, and debt refinancing.

What the Final Agreement Looks Like

The mediator or attorney will convert your negotiated terms into a formal document — called a Marital Settlement Agreement, Property Settlement Agreement, or Consent Order depending on your jurisdiction. It will include:

• A complete inventory of all marital property
• The division of each asset and debt
• Spousal support terms (if any)
• Provisions for the family home
• QDRO requirements for retirement accounts
• Deadlines for all transfers and refinancing
• What happens if either party fails to comply

Both spouses should have independent attorneys review this document before signing. The cost ($500 to $2,000 per spouse) is insurance against terms that seem fair on paper but create problems in practice.

The Divorce Mediation Preparation Kit includes a marital estate tracker with all the fields above, a commingled equity calculator, and a post-divorce budget planner — so your property division proposal is built on actual numbers, not estimates.