What is a Marriage Settlement Agreement?
A Marriage Settlement Agreement (MSA) is a contract between a husband and wife, or a wife and wife, or a husband and husband, reached in the course of their dissolution of marriage proceeding where the parties agree to the division of their property, debt and other issues in their case. A MSA will typically contain several parts which will address topics that include (but are not limited to): child custody, child support, alimony, health insurance, life insurance, tax exemptions and dependency exemptions, retirement accounts, and real property.
In most contested Florida divorce proceedings, the parties will never reach an agreement to settle their case in the course of a mediation. This means that the case will go to trial and the Court will determine the division of their assets, debts and any other issues in the case and then the parties will be ordered to comply with the Judge’s ruling. However, if you and your spouse can reach an agreement regarding your case, then there will not be a need for a trial and the terms of your agreement will be reduced to writing in the form of a MSA .
Federal and State law, along with the Rules of Civil Procedure, require that the terms of your agreement be in writing to be enforceable. This means that your oral agreement or day-of-disclosure of assets and liabilities would not be enforceable down the road. For example, if you reached an agreement with your spouse today, but then later on changed your mind about a specific part of it, your spouse would not be able to enforce it since the law requires that the agreement be in writing. Therefore, having a written agreement will ensure that you and your spouse are complying with the full extent of the agreement. A MSA is an enforceable contract which the Judges of this State honor and try to ensure the terms of are strictly followed unless there is a good reason otherwise.
A MSA is an integral part of your case and forms the basis for your Final Judgment of Dissolution of Marriage. Once the terms of your agreement are followed to the letter it is next incorporated into the Final Judgment by statement that the terms are incorporated herein by reference. There are many different types of MSA’s and every case is different. Your attorney will draft a MSA that fits the needs of you and your family.
Essential Elements of a Florida Marriage Settlement Agreement
An essential aspect of finalizing a divorce in Florida is the successful negotiation and drafting of a marriage settlement agreement. While no two agreements are identical, Florida marriage settlement agreements usually include the following key elements:
Property Division
One of the most important elements of any divorce settlement agreement involves the division of marital property. Florida divorce law requires that marital property be divided equitably, which requires spouses to carefully identify the property at issue and address how it should be divided. Whether spouses agree to divide property equally, or according to some other formula, including the disclaimer in the agreement can result in an enforceable contract that will secure the rights of each spouse on all present and future issues related to the property.
Spousal Support
Another common element in Florida marriage settlement agreements involves provisions for spousal support. Most divorcing couples either have a general understanding about whether alimony will be an issue, or they are in a position to discuss it. Like property division, spousal support can be included as a contractual provision. However, be aware that a spousal support provision often becomes part of a final judgment for dissolution of marriage. Where this occurs, a parties’ ability to modify or terminate alimony payments is limited.
Health Insurance
During the course of divorce negotiations, spouses may also consider including provisions that address health insurance issues. If one spouse was the only person covered by his or her spouse’s health insurance coverage prior to the divorce, his or her spouse may provide for continuation of coverage after the divorce. If there are children, a provision which details which spouse will remain responsible for health insurance coverage for the children may also be prudent.
Children
Any agreement involving the minor children will be contingent upon approval by the Court, after the filing of the agreement. In most situations, the Court will sign an order approving the agreement. The parties will submit their agreement to the Department of Revenue for review, and the agreement will be provided to the Clerk of Court with the Final Judgment.
Legal Aspects Under Florida Law
A marital settlement agreement will not be valid and enforceable unless it has been reduced to a writing that is signed by both parties. The law in Florida requires that the terms of the agreement be fully set forth in the written document; incorporation by reference or cross-reference to material outside the document will render a marital settlement agreement invalid. A final judgment must conform to the terms set forth in the marital settlement agreement and cannot incorporate material by reference from information or evidence contained outside the agreement itself. In practice, it is often easy to weave the terms of the agreement together and to avoid needlessly piecing them out into independent subparts.
As a general rule in Florida, agreements for the distribution of property between spouses signed within a year of a judgment of dissolution of marriage are enforceable. If the agreement is entered into after one year post-judgment, it is generally subject to review for unconscionability by the trial court.
While some lawyers will also insert a jurat, requiring a notary public to witness the signing of an agreement, this is not required by Florida law. That being said, the signing of the agreement without a jurat can lead to more review before the agreement is enforced, and does not hurt to have the notary public there to verify the legitimacy of the agreement.
Certain agreements entered into during previous litigation are not automatically enforceable. An agreement that contains the signature of attorneys for the parties, but not the signatures of both parties, will not be automatically enforceable unless the intent of the parties was clearly expressed. Oral statements made are not enforceable unless contemporaneously written into the agreement at the agreement of both parties.
Steps to Draft Your Own Marriage Settlement Agreement
Though this list is not authoritative, it can provide an overview of a good process:
- Discuss with your spouse what assets and liabilities you each have, and how they should be distributed. Make a list of all real estate, bank accounts, retirement accounts, vehicles, life insurance, collectibles, time shares, etc. that you each own alone, and what you own together (marital property). If possible, help each other collect statements and values for everything.
- Determine if any asset or liability should be awarded to one of you solely because of a legal document or family act (a premarital agreement, a trust agreement, a death, etc.). Also determine if any asset or liability should be valued as of a specific date (a premarital agreement or the date of your separation).
- Discuss what it would cost to fight over each of those items.
- Determine together what each piece of property is worth, and specifically how the property should be divided.
- Write down a list of the marital property together with the value of the property and how it should be divided.
- Discuss how any loans against property should be divided.
- Discuss any future income or careers, and how those should be divided.
- Discuss your needs for housing, clothing, food, and other necessary expenses.
- Discuss how any alimony will be paid, and for how long.
- Discuss how your child(ren)’s time with each of you will be divided, and how you will agree on your children’s school, college, and health care.
- Discuss how you will pay your children’s expenses, including health insurance, school costs, activities, and college.
Then, draft the agreement. If you want to call us, we can walk you through that process, or we can draft the entire agreement for you.
Common Pitfalls and Errors
Mistakes are often unintentional, ranging from the obvious, such as a simple typo, to those that have a far greater impact on quality of life. While even an error that is significant at the time of completion may prove inconsequential years later, others are frequently disastrous and difficult to resolve the further out from signing a marriage settlement agreement it occurs. The following are some common errors that can be avoided: An agreement that is not properly signed or executed is not enforceable as a contract. It must be one document with all pages signed by each party, with an original signature of each possibly witnessed and acknowledged before a notary public. The last two components are not always necessary, but insurance is always best. Each party should have independent counsel review the entire document. This includes not just the primary document, but any and all additional attachments, including the financial disclosure statement which details assets, income, debts, expenses and the breakdown of how property and debts are divided. When all three components – full disclosures, an agreement that is signed and properly executed, and independent reviews by separate attorneys – are completed, you will have a robust and enforceable marriage settlement agreement . An incomplete disclosure is one of the issues that can defeat the enforceability of a marriage settlement agreement at a later time. It becomes unenforceable even when the lacking information is provided after the completion of the agreement because the extent of it was and should have been relevant to the negotiations. Such an omission can also lead to increased litigation and costs. Therefore, honest and thorough disclosures are crucial. This principle is especially important in regard to minor children. Each child has his or her own best interests and a proper parenting plan includes schedules for time-sharing, transportation obligations, health care, financial support and more. The omission of any of these issues raises the likelihood that your arrangement will not work, and then the court has to make such determinations. Even after signing, it is not unusual for material changes in circumstances to result in the need for an update. However, in order to ensure your agreement is as valid, enforceable and current as possible, both parties should be committed to reviewing and updating it on a regular basis.
When to Consult an Attorney
Navigating the intricacies of a marriage settlement agreement can be a daunting task, especially for those unfamiliar with Florida family law. While some couples manage to negotiate amicably without professional assistance, there are several circumstances where consultation with an experienced family law attorney becomes essential. This section outlines such situations.
One primary circumstance in which legal help is crucial is when one or both spouses are uncertain about their legal rights and entitlements. A qualified attorney provides clarity on these matters, guiding each party through the process with an objective and informed perspective.
Another vital scenario for legal assistance involves complex financial matters such as determining the value of businesses or real estate holdings. In these instances, it is highly recommended to employ a team of professionals including attorneys, accountants, and possibly financial advisors to ensure a comprehensive and fair valuation and division of assets and debts.
If one spouse relinquishes their right to spousal support, such as alimony, during the settlement phase, it is critical for that individual to have legal guidance. Waiving the right to seek spousal maintenance later may be inadvisable, particularly if that spouse has been out of the workforce for an extended period or is unemployed. An attorney can evaluate the financial implications of such a decision and help make a more informed choice.
In cases involving potential spousal or child abuse, legal advice is indispensable in determining the best course of action both personally and legally. An attorney will be capped at filing the appropriate motions to protect you.
Finally, any situation wherein children’s welfare is at stake requires a seasoned family attorney’s insight and foresight. They will not only handle the legal intricacies but also assist in anticipating and planning for complex issues such as child support, custody, and visitation.
In summary, factors such as lack of knowledge, complicated financial portfolios, desire to waive alimony, abuse concerns, and child welfare considerations all necessitate hiring experienced legal counsel in the preparation or review of a Florida marriage settlement agreement.
Modifying a Marriage Settlement Agreement
There is a possibility that the parties in a Florida divorce action may be able to modify their agreement without going back to the court. In some situations, when the parties are feeling amicable toward each other, they may wish to modify their agreement. A plethora of reasons may exist for why the parties wish to modify their agreement post divorce. If both parties consent, they may either perform the modification and execute a new, signed document, or they may choose to go back to the Family Court and enter into a court-ordered modification. A family law attorney can work with both parties to assist them in the modification process.
Whether the agreement was ordered by the court or whether it was entered into voluntarily, the central question surrounding any modification is whether grounds exist to do so. The general rule for any type of post-decree change involves addressing whether there has been a substantial change of circumstance since the divorce order was entered. A family law attorney will assess what type of change may have occurred after the divorce case ended to assist in moving forward with the modification process.
FAQs
Q: Do you need to divide your assets and debts for the divorce to be finalized?
A: Not if you and your spouse agree on how to do it. The judge must approve all arrangements made by both parties to their mutual satisfaction.
Q: Are there many steps to going through the marriage settlement agreement process?
A: Compared to other legal proceedings, this is one of the most straightforward and least complicated. Minor modifications to the process can make it a little more confusing or cumbersome, but almost every time, the judge reluctantly agrees with the proposed arrangements.
Q: Can the judge change the arrangements decided upon in the marriage settlement agreement?
A: Only if both parties are not abiding by the agreement. The judge will listen to proposed amendments where both parties agree , but the judge’s job is to look out for the best interest of you, your spouse and your children.
Q: Are marriage settlement agreements always fair?
A: Not always. It is easy to get taken advantage of when negotiating over financial matters that involve housing, businesses, investments and more. It is highly suggested that you and your spouse consult with lawyers to finalize the agreement.
Q: Are you thinking of contesting your spouse’s agreements?
A: You should probably talk with an experienced attorney before proceeding, as it may not be what you think.