The majority of dissolution of marriage actions are resolved through settlement rather than litigation.

Settlement is often encouraged and favored, provided the parties are fully informed and have received the requisite financial disclosures from each other or have opted to waive those disclosures, again, voluntarily and with full knowledge.

Settlement can be reached at any time during the pendency of a divorce action. It is not unusual for some parties to have an agreement in place on all the outstanding issues even before a divorce action is ever filed. It is quite common for the parties to work with a mediator or other mutually agreed-upon third party to assist the parties in reaching a fair and reasonable agreement.

Quite often the uncertainty that comes with litigation along with the emotional and financial cost of litigation tends to drive the parties to a negotiating table either on the eve of or on the day of trial.  However, even such “11th hour” agreements are typically more beneficial to the parties than having a Judge decide their fate in terms of equitable distribution of the parties’ assets and debts, the parties’ support obligation to each other and as to the parties’ rights and obligations as to any minor children they may have in common.

An agreement provides the parties with a peace of mind and certainty. This applies equally to a divorce action with property and one with property and/or minor children. When minor children are involved, the Court will evaluate the parties’ agreement as to time-sharing, child support and related matters contained in the parties’ parenting plan based on the best interest of the child standard. The Courts favor settlement agreements and hence the agreements are typically ratified and incorporated into a Court order or a Final Judgment of Dissolution of Marriage.

Regardless of when and how an agreement is reached, whether informally between the parties with or without the assistance of counselor and/or mediator or otherwise, a marital settlement agreement should always contain certain universal provisions to ensure that the end product is sufficiently comprehensive for any future enforcement action.

Even when the parties have not only agreed to settle their divorce action but have also agreed on the terms of their settlement, it is not unusual for each of the parties to insist on a different level of specificity as to both the essential terms and the nonessential and ancillary settlement terms. It is not uncommon for the payor party to insist on loose, vague and ambiguous language to frame his or her obligation to perhaps make it more difficult to enforce that certain support obligation he or she would owe the other party, wherein the other party, the payee party, the recipient of spousal support, would typically want all the terms laid out with sufficient specificity so that the support obligation can be easily enforced in court.

Marital settlement agreements are contracts and are enforced under contract law. Although vague and ambiguous agreements can be enforced, when there is an agreement on a major, contentious issue, it is best to flesh out all the pertinent terms with sufficient clarity so as to reduce any possibility of a challenge, including a proceeding for clarification of the terms of the parties’ divorce decree.

For example, if the parties agree that the wife will remain in the marital home until it sells and that when it sells, the parties will split the proceeds 50/50 or otherwise, the Agreement should include each parties’ responsibilities regarding the home prior to sale as to recurring costs, which often include the mortgage, taxes, utilities, as well as to nonrecurring costs, which typically include any necessary repair costs, “curb appeal” improvement costs and such. The parties should also elaborate on the logistics of the listing process, the distribution of the sale proceeds and should also include appropriate timeframes, conditions precedent and such. The Court is unable to enforce that which is not there and so if the Agreement is silent on all this and a dispute arises sometime in the future, the party seeking enforcement will have an uphill battle on his or her hands to have the Court enforce an obligation that was either never reduced to a writing or that is simply too ambiguous.

Therefore, it would serve both parties’ interests to take time and negotiate a well-drafted, comprehensive settlement agreement as it is that detail that often discourages the payor party from violating the Agreement in the first place and, alternatively, makes the Agreement easier to enforce by the payee party.

Consequently, each marital settlement agreement should address the following (as applicable):

  • Future treatment of overlooked assets (at the time of agreement)
  • Health insurance / COBRA
  • Temporary support
  • Equalizer payment
  • Past tax returns / audits
  • Personal property disposition (including property removal, timeframes for the removal, storage costs, etc.)
  • Pets/pet care
  • Disposition of the marital home/exclusive use and possession of the home
  • Deed preparation and recording
  • Title transfers
  • Distribution of retirement accounts
  • QDRO preparation and costs, as appropriate
  • Distribution of brokerage accounts
  • Tax treatment of alimony/spousal support
  • Business interest distribution
  • Treatment of joint accounts (including but not limited to bank accounts, insurance accounts, cell phone accounts, etc.)
  • Disposition of custodial accounts
  • Attorney fees/attorney fees in the event of a default

Also, it is important to keep in mind that once an agreement is reached, certain matters are not subject to future modification. For example, a complete waiver of alimony or an agreement on a non-modifiable alimony as to amount and duration is obviously not modifiable. Child support, on the other hand, is modifiable.

Once an agreement is fully executed by the parties and the Court ratifies it and incorporates it into the parties’ Final Judgment of Dissolution of Marriage, it becomes an Order of the Court and, as such, the Court may invoke its contempt power to compel compliance with all of its provisions.

Now, there are circumstances under which a marital settlement agreement can be set aside. However, you do not want to enter into agreement to then have it set aside, unless circumstances truly warrant a challenge to an agreement.

The Florida Supreme Court in Casto v. Casto has held that there are two separate grounds by which either spouse may challenge an agreement and have it vacated or modified. The first ground is “fraud, deceit, duress, coercion, misrepresentation, or overreaching.” Casto v. Casto, 508 So. 2d 330, 333 (Fla. 1987) (internal citations omitted). The second ground to vacate a settlement agreement is where “the agreement makes an unfair or unreasonable provision for the challenging spouse, given the circumstances of the parties.” Id.

However, “a bad bargain is not a sufficient ground, by itself, to vacate or modify a settlement agreement.” Id. at 334. The Florida Supreme Court went on to explain how “[a] bad fiscal bargain that appears unreasonable can be knowledgeably entered into for reasons other than insufficient knowledge of assets and income. There may be a desire to leave the marriage for reasons unrelated to the parties’ fiscal position. If an agreement that is unreasonable is freely entered into, it is enforceable. … The critical test in determining the validity of marital agreements is whether there was fraud or overreaching on one side, or, assuming unreasonableness, whether the challenging spouse did not have adequate knowledge of the marital property and income of the parties at the time the agreement was reached.” Id.

It is important to note that the Casto analysis applies only to agreements entered into prior to litigation and discovery. Macar v. Macar, 803 So. 2d 707, 713 (Fla. 2001). The Florida Supreme Court in Macar went on to state how this is the case “because before spouses file for dissolution, they engage each other as fiduciaries and as such, fraudulent behavior may be perpetrated more easily. After a legal action has been initiated, however, both parties may employ counsel to engage in the discovery process to disclose all assets and relevant factors. Given the benefits available in contested legal actions, an [ex-spouse] should not be permitted to challenge settlement agreements in final judgments under an umbrella as broadly based as those expressed in Casto.Id.

The Macar Court went to state that it is Rule 1.540 of the Florida Rules of Civil Procedure and not Casto that provides the framework for challenging settlement agreements entered into after the commencement of litigation and utilization of discovery procedures. Id.

Ultimately, when negotiating a settlement agreement, you do not want to overlook anything that is important to you and when you are ready to memorialize your agreement in writing, clear, unambiguous language should be used to reduce the likelihood of any post-dissolution litigation.

Finally, it is worth emphasizing that whenever possible an agreement should always include specific timeframes for the property transfers, for a party to vacate the marital home, for the title transfers, for the vacating party to remove his or her personal property from the marital home, for the joint accounts to be closed or transferred, for the deeds to be recorded, etc. Such specific timeframes not only make it easier in case an obligation must be enforced in Court but also increase the likelihood of party compliance with the provisions of their Agreement.