A marital settlement agreements, often referred to an MSA, is a preferred method for couples to resolve their issues in a action for dissolution of marriage or termination of a domestic partnership. Marital settlement agreements allow parties to customize an agreement that resolves all legal issues involved in the case. Generally, once a marital settlement agreement is completed, it will be incorporated into the judgment for dissolution or domestic partnership termination.
Benefit of a Marital Settlement Agreement
In arriving at a marital settlement agreement, parties are able to conclude their case in a manner chosen by them. Rather than having the Court decide the ultimate resolution of an issue or issues, the parties, instead, decide what is best for them. Furthermore, parties are able to arrive at agreements that would not be ordered by the Court absent an agreement. For example, among other agreements, parties may agree to:
- Divide property in a manner where one party keeps the family residence, while the other spouse retains stock, retirement, or another asset
- Divide property where one spouse receives more than 50% of the total estate
- Divide debt where the parties select which debt each party will take
- Supporting spouse pays a lump sum to a supported spouse at the time of the agreement so that no future support must be paid on a monthly basis
- Child support may be ordered above or below the statutory guideline
- Release to the noncustodial parent the tax deduction for a child
- Custody agreements that you and the other parent believe is best for your child; not the Court
The key aspect of a marital settlement agreement is choice
In addition to being able to customize an agreement that you and your spouse/domestic partner find mutually advantageous and agreeable, settling a case through a marital settlement agreement can significantly reduce the costs of litigation. If a party must hire an attorney to go to hearings on interim issues and ultimately to trial, the cost to each party can range from thousands of dollars to tens of thousands of dollars, depending on the number of issues of disagreement, the complexity of those issues and the number of times that the parties must appear in Court.
Not only may litigation lead to unnecessary costs, but the time that must be devoted to a contentious case is significant.
At Aeschleman Law, we will discuss with you in detail your proposal for settlement and how your goals line up with California law and what the Court may order if your case proceeded to a trial. We will also work with your spouse, your domestic partner, or other parent in the case to propose and try to reach a resolution without the need for litigation.
Another utilized method for reaching a marital settlement agreement is mediation. At Aeschleman Law, we can help direct you to well-respected mediators, as well as prepare you for mediation, and advise you during the mediation process.
If we are unable to resolve your case, the family lawyers at Aeschleman Law will be prepared to guide you through the process of litigation.
Interspousal Fiduciary Duties and Requirements of Full Disclosure
It is critical that parties entering into a marital settlement agreement understand that they owe a fiduciary duty to one another under Family Code §721. Under Family Code §721, spouses have a duty to act in the “highest good faith and fair dealing” and neither party “shall take any unfair advantage of the other.”
Following separation, the duties to the other spouse remain. Family Code §2102 outlines those duties owed, including: accounting of all assets and liabilities in which the party may have an interest or obligation, and income and expenses; accurate and complete written disclosure regarding any investment opportunity, business opportunity or income producing opportunity that presents after separation, but results from investment, significant business activity (not from ordinary course of business), or other income producing opportunity from during the marriage; and the operation or management of a business or an interest in which a business in which the community may have an interest. The obligations remain ongoing post-separation and until Judgment, or until distribution of the asset in question.
Moreover, under Family Code §1000, parties are required to make a full disclosure of all “material facts and information regarding the existence, characterization, and valuation of all assets in which the community has or may have an interest and debts for which the community is or may be liable, and to provide equal access to all information, records, and books that pertain to the value and character of those assets and debts, upon request.” See Family Code §1100(e).
The foregoing is only a short summary of the fiduciary duty laws. The body of law is complex and essential to every family law case.
Breaches of fiduciary duty are taken seriously, and consequently, there may be substantial penalties associated with these provisions. In some circumstances, the breaching party will be penalized 50% of the undisclosed or misappropriated asset. And, in situations where the breaching party acted with “fraud, oppression, or malice” the non-breaching party may be awarded 100% of the asset.
In the case where an agreement is reached and later discovered that there was a breach of fiduciary duty, the Court can set aside the marital settlement agreement and related Judgment, and thereafter assess the appropriate penalties. It is important to make sure that any agreement reached, is memorialized only after there has been full disclosure as required under the Family Code.
Marital Settlement Agreements and Child Support
While marital settlement agreements provide parties with significant latitude in resolving their family law related issues, parties should be aware that although they can arrive at an agreement that differs from the statutory guideline figure, the Court must approve that agreement. Parties are unable to limit the Court’s jurisdiction to resolve child support issues. If parties wish to deviate from the guideline support order, they should consult with counsel to prepare the agreement in such a way that maximizes the likelihood that the Court will approve the support order.
How Aeschleman Law Can Help
The divorce attorneys at Aeschleman Law have significant experience with drafting, enforcing, and setting-aside marital settlement agreements. While marital settlement agreements provide flexibility for parties to make agreements, it is critical to have an experienced divorce attorney to ensure that your objectives are effectuated and that the agreement would be upheld if challenged.
The lawyers at Aeschleman Law will make sure that the provisions of your agreement effectuate your desires, while also assuring the provisions are complaint with law and public policy. Additionally, if you are having difficulties enforcing the terms of your marital settlement agreement or if believe that you believe your rights were violated by your spouse or domestic partner, we will zealously advocate on your behalf to protect your interests.
Aeschleman Law is located in San Jose and serves Santa Clara, Alameda, and San Mateo Counties. Call us today for an initial consultation at (408) 724-8930. You may also contact us by filling out the form on the bottom of this site.