How to Write a Property Settlement Agreement in Pennsylvania

A Property Settlement Agreement (PSA) — sometimes called a Marital Settlement Agreement — is the contract that divides everything you built during your marriage. In a mutual consent divorce under Section 3301(c)(1), it is the document that replaces a judge's decision. Get it right and you finalize the divorce in weeks. Leave gaps and you invite years of enforcement disputes.

What a Pennsylvania PSA Must Cover

A complete property settlement agreement addresses every financial element of the marriage. Missing even one category creates an opening for your ex-spouse to petition the court for additional relief later.

Real Estate

Specify exactly what happens to every property:

• Is the home being sold, bought out, or subject to a deferred sale?
• Who occupies the property until disposition?
• Who pays the mortgage, taxes, insurance, and maintenance during the interim?
• If a buyout: the appraised value, the equity calculation, the buyout payment amount, and the deadline for refinancing
• The deadline for executing a quitclaim deed to transfer title

Retirement Accounts and Pensions

• Which accounts are being divided and what percentage each spouse receives
• Whether a QDRO is required (for 401(k), 403(b), and employer plans) or a transfer incident to divorce (for IRAs)
• For Pennsylvania state pensions (SERS, PSERS): specify that an Approved Domestic Relations Order (ADRO) will be drafted using the system-specific template
• The coverture fraction methodology if using Berrington v. Berrington for defined-benefit pensions
• Who drafts the QDRO/ADRO and who pays the drafting costs

Financial Accounts and Investments

• The division of bank accounts, brokerage accounts, stock options, RSUs, and any cryptocurrency holdings
• Whether accounts are divided by balance transfer or by closing the account and splitting proceeds
• The date used for valuation (date of separation is standard)

Debt Allocation

• Which spouse is responsible for each debt
• A requirement to close all joint credit accounts and transfer balances to individual accounts
• Indemnification clauses: if one spouse defaults on an assigned debt, they must reimburse the other for any collection, legal fees, or credit damage

Personal Property

• Division of furniture, vehicles, jewelry, electronics, and other tangible assets
• A catch-all clause specifying that each spouse retains possession of items already in their control as of a specified date

Support

• Whether spousal support or alimony is being waived or awarded
• If awarded: the amount, duration, and termination triggers (remarriage, cohabitation, death)
• Whether the waiver is mutual and irrevocable

Insurance and Benefits

• Health insurance: who maintains coverage and for how long (COBRA coverage is available for up to 36 months after divorce)
• Life insurance: whether either spouse must maintain a policy naming the other as beneficiary to secure support or buyout obligations

Common Drafting Mistakes

Vague buyout timelines. "Spouse A will refinance the mortgage within a reasonable time" is unenforceable. Use specific deadlines: "within 180 days of the date of the final decree."

Missing indemnification clauses. Without indemnification, creditors can pursue you for debts the court assigned to your ex. The clause should specify that the responsible spouse will hold the other harmless from all claims, including attorney's fees.

Forgetting the tax basis. When one spouse keeps the house, they inherit the original cost basis. If the PSA does not account for this, one spouse gets an asset worth less than the paper value due to future capital gains tax exposure.

Omitting retirement order deadlines. QDROs and ADROs should be drafted and submitted within 60-90 days of the final decree. Without a deadline, the non-participant spouse risks indefinite delays — and if the participant spouse dies before the order is entered, the account may pass to a new beneficiary.

No default provisions. Specify what happens if either party breaches the agreement: attorney's fees, interest on unpaid obligations, and the right to seek enforcement through the Court of Common Pleas.

Making the PSA Enforceable

For a PSA to be incorporated into the final divorce decree in Pennsylvania:

1. Both spouses must sign voluntarily, without coercion
2. Both spouses should have had the opportunity to consult with independent legal counsel
3. Full financial disclosure must have occurred — hiding assets can void the entire agreement
4. The agreement must be fair at the time of execution (unconscionable agreements can be set aside)

Once the judge incorporates the PSA into the divorce decree, it becomes a court order. Violations can be enforced through contempt proceedings.

Building Your Settlement Proposal

The Pennsylvania Divorce Financial Split Guide includes a settlement proposal framework that walks through every PSA category with calculation worksheets for home equity buyouts, retirement division, and debt allocation — so you can draft a complete proposal before sitting down with your spouse or a mediator.

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