What Is a Marital Settlement Agreement
A marital settlement agreement is a binding legal contract between both spouses regarding the terms of the marriage dissolution. This contract is in effect until a judge approves it and finalizes it as a divorce decree. The main purpose of an agreement is to ensure an amicable parting without having to set foot in a courtroom.
Generally speaking , a marital settlement agreement outlines the provisions of the divorce, from child custody and child support to property division, alimony and any other issues that may require dispute resolution. A marital settlement agreement is not a divorce decree. The agreement is executed by both parties and will be signed by a judge, at which point it becomes part of the divorce decree.
What Is a Divorce Decree
A divorce decree is the final adjudication that the court makes in your action for a divorce. It memorializes in writing the judicial determination an entry by the court of the termination of your marriage and incorporates within it, upon request, the terms of your marital settlement agreement (MSA) as an appendage to your decree. A divorce decree is conclusive of the entire marital relationship, meaning that all issues relating to the marriage are settled and either determined by the divorce decree itself or the judgment incorporating your MSA.
The law also requires the court to incorporate the terms of the equitable distribution of property (whether by way of an MSA or specifically adjudicated by the court) into your final divorce decree of divorce. The equitable distribution of property that is ordered by the court or by agreement of the parties, together with other monetary obligations such as child support, alimony, and the like, becomes enforceable as a judgment by the court and enforceable if necessary by the sheriff in the county where the defendant (or obligor) resides. In other words, if you fail to pay the rent/ mortgage on the property that is the subject of an equitable distribution order within the allotted time period under the applicable court order or your MSA, the Sheriff can immediately be called upon to enforce the court order and compel a sale of the property to satisfy the underlying monetary obligation.
The finest point you need to understand about the difference between the two terms is that a divorce decree terminates your marriage and incorporates the material terms of your MSA while the MSA only governs the terms of your agreement for settlement purposes.
Key Distinctions Between The Two Documents
As a predicate, let’s agree that a marital settlement agreement approved and incorporated into a judgment of divorce is not yet a final or complete divorce judgment. Technically it is a stipulation which has yet to be converted into a final uncontested judgment of divorce. That said, here are the major distinctions between a marital settlement agreement and a judgment of divorce:
1. A marital settlement agreement is a contract negotiated between the parties with each party having had the opportunity to be represented by independent counsel during the negotiations and prior to executing the agreement. A judge, sometimes referred to as the divorce judge or trial judge never sees the agreement (or if he or she does, it is sometime at the end of the case when, for example, the parties need the judge to review and approve the agreement or an issue arises regarding the enforcement of the agreement). In contrast, a divorce decree or judgment of divorce is an accurate reflection of what a judge has decided was the proper disposition of the action and every dispute/adversarial issue that has been tried or settled. It contains the orders, findings, directions, dispositive issues and in many instances recitations of facts as found by the court.
2. A marital settlement agreement is not a not judgment or order of the court and thus there is no contempt of court to enforce the agreement in the absence of a final judgment of divorce and even then, it is rare. A divorce decree and judgment of divorce is an order of the court that is enforceable through the courts as an order including through its contempt powers.
3. A marital settlement agreement albeit approved by the judge and incorporated into a judgment of divorce, is not subject to attack under the summary judgment standard and may only be set aside under the equitable standard of fraud, mistake, dirty tricks, lack of capacity etc. A divorce decree and judgment of divorce is subject to attack under the summary judgment standard for rectification, modification, reformation and the like.
4. An appeal from a marital settlement agreement is effectively not available and is limited to an attack under the various equitable standards of fraud, mistake, dirty tricks, lack of capacity etc.. A judgment of divorce can be appealed similar to an appeal of a lawsuit with fact based findings being final unless "unconscionable" or having been made without supporting credible evidence or an abuse of discretion having been demonstrated by the appellant.
When Each Is Used and Why
Marital Settlement Agreements are typically used in all situations where the divorcing couple is able to reach an agreement with respect to division of assets and debts, custody, parenting time, and support. They are particularly useful where the parties can agree but do not want to go through a long drawn out litigated divorce. They are also often used in personal injury cases where there is a pending injury case and a divorce is pending. The settlement is usually on the basis that the personal injury proceeds will be divided in the same fashion as marital assets (50-50) or in some other proportion depending upon the equities of the situation. These agreements are also often used when the parties have already resolved their issues but need a written agreement to memorialize their agreement and/or for the purposes of equitable distribution.
A divorce decree , generally speaking, is something that is entered by a Judge after trial if the parties are not able to reach a settlement of their case and everything must be decided by a Judge. They are also part of a consensual divorce post judgment if there is a mutual agreement but it is necessary that the Agreement be presented to a Judge.
Legal Implications and Enforceability
In terms of enforceability, both the marital settlement agreement and divorce decree, once entered into with the court, are enforceable by contempt. A party found in contempt of either can be ordered by the court to comply with the previous order or to suffer specific consequences such as jail or fines. A marital settlement agreement is, however, less formal than a divorce decree in that it is not entered into with the court until it is merged into the divorce decree.
The main difference between a marital settlement agreement and a divorce decree though is the ability to modify. Parties cannot modify what is contained in a divorce decree by agreement. Rather, if the parties wish to modify a divorce decree, they must seek a modification from the court. A marital settlement agreement, on the other hand, is modifiable by agreement of the parties unless the marital settlement agreement states otherwise. In drafting a marital settlement agreement, the parties should consider including language that prohibits modification of the terms as well as sufficiently laying out the terms so as to prevent disputes over what was intended to be agreed to.
Common Misunderstandings and FAQs
There are several misconceptions about marital settlement agreements and divorce decrees that are important to clarify.
Myth: You don’t need a marital settlement agreement to finalize your divorce.
This is not true; while few states require you to enter into a marital settlement agreement, doing so is very much in your best interest because it’s the most controlled and comprehensive way of resolving your divorce issues.
Myth: Your divorce decree is a permanent order.
This is not entirely true. A divorce decree is permanent until the right circumstances present themselves to seek a modification of an order or you qualify to have your divorce decree vacated. In Missouri, for example , you can request to modify a divorce decree two years after your divorce is finalized if the request is related to the child custody arrangement. The modification requests go through the courts and needs to show a substantial and continuing change in the circumstances.
Myth: A divorce decree cannot be overturned.
Although difficult to achieve, there are specific circumstances under which your divorce decree may be overturned. For example, people convicted of bigamy face having their marriages (with two spouses) vacated. Likewise, divorce decree vacated can occur when fraud was used in obtaining the order or if the court lacked jurisdiction to make certain decisions.
Myth: A divorce decree can vacate a marital settlement agreement.
If your divorce is finalized by the judge approving your marital settlement agreement. However, if the divorce decree overturns the marital settlement agreement altogether and it is vacated then there will be no enforceable marital settlement agreement.