A cat-state is formed as the steady-state solution for the signal mode of an ideal, degenerate parametric oscillator, in the limit of negligible single-photon signal loss. In the presence of the signal loss, this is no longer true over timescales much longer than the damping time. However, for sufficient parametric nonlinearity, a cat-state can exist as a transient state. In this paper, we study the dynamics of the creation and decoherence of cat-states in degenerate parametric oscillation, both with and without the effect of a Kerr nonlinearity that applies to recent superconductingcircuit experiments generating cat-states in microwave cavities. We determine the time of formation and the lifetime of a cat-state in terms of three dimensionless parameters λ, g and χ. These relate to the driving strength, the parametric nonlinearity relative to signal damping, and the Kerr nonlinearity, respectively. We find that the Kerr nonlinearity has little effect on the threshold parametric nonlinearity (g > 1) required for the formation of cat-states, and does not significantly alter the decoherence time of the cat-state, but can reduce the time of formation. The quality of the cat-state increases with the value g, and can also improved by the Kerr nonlinearity. To verify the existence and quality of the cat-state, we consider several signatures, including interference fringes and negativity, and show how they can be computed. We simulate a superconducting-circuit experiment using published experimental parameters and found good agreement with experimental results, indicating that a nonclassical cat-like state with a small Wigner negativity is generated in the experiment. A stronger nonlinearity would lead to a cat-state with convincing cat-state signatures. Finally, we explore the feasibility of creating large cat-states with a coherent amplitude of 20, corresponding to 400 photons.