What Are Marriage Settlement Agreements?
Marriage Settlement Agreements are part and parcel of any divorce that is not filed as a Joint Simplified Dissolution of Marriage. Something has to provide the court with an idea of what the parties agreed to do. But it doesn’t end at the divorce. The Marriage Settlement Agreement or MSA, can be used to resolve issues of property and children while the divorce is pending (i.e., during the pendency of the divorce). In fact, many times that’s just what the parties do – they include in it the agreement reached while the case has been pending.
Generally speaking, your divorce begins when one person – the Petitioner – prepares and files a Petition for Dissolution of Marriage. Unless it’s filed as a Joint Simplified Dissolution of Marriage, the parties may agree about many issues, but still fight about others . A Marriage Settlement Agreement is there to help the parties reach agreement on these issues, including the division of property, maintenance (formerly known as alimony), custody of the children (though for many reasons, this is often done in a separate Agreed Allocation Judgment), and child support. Maintaining the status quo – continuing to do things as they’ve been done for all these years – probably won’t happen either.
The Marriage Settlement Agreement may also spell out in detail the process for addressing any of these issues if there is a problem in the performance of the MSA, or will remind the parties of their respective rights, as there are no less than seven different bases in Illinois law for modifying future maintenance awards.
What an Illinois Marriage Settlement Agreement Should Include
While every case is a little different, certain key elements make up the majority of Illinois marriage settlement agreements. We will look at the three main areas: property division, spousal support, and child custody.
Property Division
One of the major disputes in a divorce proceeding is the division of marital property. The court’s job is to divide the property in a manner that is fair and equitable to both spouses. While some property may be distributed 50-50, the court may seek other alternatives. Usually, the court wants to even out the property in order to provide both spouses with a fresh start. Spouses are executed to include a list of all marital and non-marital property, including a description and an estimate of value for everything.
In addition to a list of property, a spouse should offer an amended list at the time of the court hearing. A reasonable alternative may be for a spouse to occupy the home until it is sold. If after 90 days it is not sold, both spouses may be required to contribute to the selling fees.
Spousal Support
Illinois allows the court to award spousal support to a spouse. The situations for spousal support are different from state to state, but Illinois uses factors that are taken into consideration when making this decision. The determining factors include: the income and property of each spouse, which spouse has the ability to support themselves, whether maintenance is needed for a short or long duration, and if there is any impairment to earning capacity.
The duration of the spousal support payment is determined using an equation based on the duration of the marriage and the amount of the net assets. The duration of support may increase if there are any children under the age of 18. Consideration is also given to whether additional education is needed to help the spouse become self-sufficient.
Child Custody
Both parents have the right, per the law, to access to and receive information from the other about the health, education and welfare of a minor child. The court may award co-parenting decisions jointly to both parents, or allocate significant decision-making to one parent. A schedule for parenting time between the minor children and each parent is usually offered as well. Each situation is unique and the court will do what is best for the child in each case.
Requirements Under Illinois Law
In the state of Illinois, the law requires that a marriage settlement agreement be in writing and signed by both parties. It must adequately cover all of the key aspects of the divorce settlement so that it clearly defines the expectations of both parties. The terms and conditions agreed upon are incorporated into the final judgment for divorce. The judge overseeing the case will generally review the agreement to ensure that it is fair to both parties and that there was full disclosure and detailed communication of the primary issues. Once it is determined that all issues related to the settlement have been addressed, the judge then has both parties sign the document right in the courtroom.
The only real judicial intervention that occurs with marriage settlement agreements is during the review stage. Only then does the judge review the settlement for approval or requests amendments if he/she feels that any additional information is needed before the agreement can be approved. No other judicial intervention is permitted. Since judges view these agreements as the final resolution between the two parties to a divorce, they want to ensure that the final review has been completed before signing off on the agreement. Normal court procedure applies to the entry of the Judgment for Dissolution of Marriage; however, there is only the one review of the agreement.
Instructions for Drafting a Marriage Settlement Agreement
A written, signed and notarized agreement is required under the Illinois Marriage and Dissolution of Marriage Act in order to be enforceable by the court. The agreement must be clear, concise, specific and fully cover all issues of custody, parenting time, child support and maintenance.
It is advisable to have counsel review the agreement prior to signing it.
•Identify yourself: Full name and address of both parties to the agreement.
•Identify the children of the marriage: Full names and birthdates. If there are no minor children, explain on the first line of the agreement that there are no children to be addressed.
•List all assets and debts of the parties, including the value of each. It is not necessary to attach bank statements and current account balances, but it is a good idea to review the statements before entering into an agreement.
•How will the assets be divided? For example, you might say, "Husband will keep his 401(k) plan and Wife will keep her retirement plan." It’s best to keep your retirement assets separate during the time the divorce is pending because if there is a court order to divide the assets, and one party withdraws assets without the consent of the other prior to a court order, it can become a contentious process. The court may even issue a temporary restraining order to prevent either party from withdrawing retirement assets until there is a determination.
•How will the debts be paid and who is responsible for each debt? It is also important to identify what debt will be attributed to which spouse. If you have refinanced a credit card and added your spouse’s name to the credit card, then we consider that debt jointly. The credit card company might look to both of you to pay the debt, even though the agreement says the debt is in your name alone.
•How does maintenance work? In a divorce, maintenance (known as spousal support or alimony in other states), is a complicated issue. You should consult with an attorney before agreeing to an amount, even if you are sure of the amount. There is a formula for determining the basic amount of maintenance, and if you are not eligible for that, you have to prove that you need maintenance above the threshold. Your spouse could use your agreement against you later if you are not eligible for maintenance. It is important to talk with a lawyer before agreeing to a number.
•What does child support mean in Illinois? Illinois law establishes the amount of child support based on the combined net income of the parents. The formula is complicated, but your attorney should be able to run the numbers to give you a range of what the minimum amount of support should be.
•Costs of the divorce: The agreement should contain a provision addressing how the costs of the divorce will be paid, i.e., attorneys’ fees, filing fees and court costs. The default position of the law is that each party pays his or her own attorney’s fees.
•Sole custody vs. joint custody: In Illinois, we prefer the term "allocation of parental rights and responsibilities" to "custody." The court determines custody at the time of the divorce, and the decision is final unless there is a substantial change in circumstances that would support a modification. An allocation judgment is modifiable with notice to the other party. Both parties have the right to attend a custody evaluation with a psychologist when there is a dispute regarding parenting time with the children. However, both parties must agree to submit to the evaluation. You cannot force the other person to attend an evaluation, nor can they force you to attend. A court can order the evaluation if a judge finds there is a reason to do so. The cost of the evaluation is split between the parties, and an average evaluation costs about $3,500.
Enforcement of an Agreement
When entered into voluntarily, a marriage settlement agreement will be incorporated into a court order and will have the same effect as if it were a judgment of the court. Any provision in the agreement that may encourage or promote the following activities is unenforceable: In order to enforce the terms of a settlement agreement, the court must find that the terms are reasonable and fair. Given that the state does not want to interfere in family matters , as long as matters between the parties are kept within reason, the court will enforce the agreement. When enforcing the agreement, the court will look for a willful violation of the agreement and not an unintentional failure to follow it. If violations are found that were deliberate, the court may award reasonable attorney’s fees to the winning party.
Modifying a Marriage Settlement Agreement
If any portion of a marriage settlement agreement that is incorporated into a Judgment for Dissolution of Marriage under the Illinois Marriage and Dissolution of Marriage Act is to be modified, it can only be done on the Agreement of the parties or based upon a showing of "substantial change in the circumstances of the parties" or the "best interest and welfare of the child". The standard that must be met in these cases is a difficult one to meet. As to the child’s support, it does not matter if the child reaches a certain age and leaves home and is no longer a minor. A court will only reduce the obligation once it has been shown there has been a "substantial change in circumstances" or the "best interest and welfare of the child".
Once a court has entered an Agreed Judgment for Dissolution of Marriage the parties may not have subsequent Agreed Orders that provide that they now have agreed to do something different than the Judgment provides. In other words, the parties may not enter into a new Agreement that changes the Judgment for Dissolution of Marriage without further approval of the Court. When such an Agreement is presented to the Court, the court typically states that it needs to find the changes are in the "best interest of the child".
A new filing must be made in order to make the change and a judge can approve or disapprove such new Agreement. A new filing is also usually made for a post-decree agreement that does not involve any children. In these cases too, the Court can approve or disapprove the Agreement.
The old financial affidavits are typically attached to any petition to modify support as filed. The petition or motion is filed with the Court, all the previous pleadings in the case are noted and a Court date is obtained. For the most part the party who is seeking the modification of the Judgment for Dissolution of Marriage is the one who files the paperwork.
If the parties agree, they can waive the temporary Rule to Show Cause Hearing and directly go to the end of the case. The parties may pay the fees if approved by the Court, and the important part is that the parties have to go to Court again in a few months if the payment is not made as agreed. In those instances, a Rule to Show Cause Order can be obtained. An entire other petition would have to be filed if an agreement could not be reached or there are new issues to be dealt with in getting too the end of the case.
Common Pitfalls and Mistakes
All too often, clients come to us after they visited with one of those "cheap and easy" pastoral services that will perform a marriage settlement agreement for $79.99. The cost may be low, but the results can be extremely high in terms of emotions and errors. We have seen it all, from missing pages, to wrong amounts, to missing real estate titles, to not listing heirs, to completely omitting state mandated language that makes the family safe. The problem here is that most people who perform these agreements have no idea what’s required by law, so they come up with their own ideas of what a marriage settlement agreement should be. If you’ve heard someone say that your attorney is just making it complicated, obnoxious or expensive, ask them if you should have your dentist perform surgery just because he or she is a good people person. Wouldn’t you want a surgeon? We often see clients that try to do their own agreements after they’re in the process. This can lead to many problems, including false confidence. We frequently have clients that walk in and they think that because they have done a print-out off the internet, they are absolutely certain that it’s legally binding. What is often really happening is they’re sincere , good-hearted people that just want to get it over with. They have no idea that they’re doing something incorrectly until it’s way too late. You have to understand that a divorce is much simpler than a marriage settlement agreement (which, simply put, is the final terms of your divorce). While a divorce can take 90 days to 6 months to finalize after the Court case has been filed, the marriage settlement agreement has to be finished on the day you are at court for the final hearing (if you even get to the final hearing). For that reason, it’s a much larger mess if something is wrong with your agreement. Undoubtedly some of the most common pitfalls include: You want to be safe, smart and insured in a marriage settlement agreement. That’s how to approach it. That means that you don’t write up your own agreement. Certainly, you should review your agreement to make sure you understand it. In the end, you should trust your lawyer, but you should also trust yourself. The idea is to set goals with your lawyer and to know that you can be open about them. You want that security because this agreement is the rest of your life.