Read the fine print

Personal finance expert Jen Smith was roughly five weeks away from giving birth when she found out she was one of about 45 people her company was laying off. She would receive a severance package that included five weeks of pay and one month of health insurance coverage, then she would be eligible to continue her coverage through the Consolidated Omnibus Budget Reconciliation Act, or COBRA.

“(Getting laid off ) was an absolute surprise to everyone. We didn’t see it coming. And it was people in all different departments,” she said. “They made (the severance packages) look pretty similar.”

A severance package is typically a combination of pay and benefits offered upon termination. Not all employers offer severance packages, and the laws governing them vary by state, said employment attorney Scott Behren. (Some states, such as New Jersey, Massachusetts and Idaho, do require severance packages when a firm is conducting a large layoff.)

But when your employer does offer one, you need to be careful to read the fine print before signing, Behren said. “Sometimes, if the employee refers the agreement over to me, we can negotiate larger sums. There might be other things in the agreement that are negotiable.”

Here are four things to keep in mind before accepting the initial agreement you’re offered:

Don’t rush

Companies typically want you to sign the severance as quickly as possible, especially if there are provisions that limit you from taking action against them. However, it’s typically a good idea to resist that pressure, said Cameron Burskey, partner and managing director at Cornerstone Financial Services.

You may be worried about getting the money as soon as possible to cover expenses, but signing the document could mean giving up important rights without considering the ramifications, Burskey said. “At least sleep on it, read through, and definitely contact a professional.” Depending on your state, your employer may need to give you a period of time — perhaps 21 days — to decide whether to sign the document, so be sure to check your rights, especially when it comes to looking for a new job.

Check for red flags

Smith recalls being emotional when she first received the news of her layoff. By giving herself time to calm down and think through her options, she said she was able to make more clear-headed decisions, such as moving her family to her husband’s health insurance plan instead of accepting COBRA. She realized that, while she had signed a noncompete with the company, there was no noncompete in her severance document. She doublechecked that with her employer and found that she would be free to work for whomever she wished.

In addition to noncompete clauses, severance packages may limit your ability to take action against the company for wrongful termination or other issues, or place other restrictions on your rights, Behren said. In other cases, the employer may want you to agree to assist the company through its transition. That may include being available to answer questions or provide information or assistance, he said. It’s a good idea to contact an attorney before you sign, especially if you’re being asked to give up rights or if something is being asked of you in return for receiving