Most New Jersey divorce cases ultimately resolve through settlement rather than a trial. When that happens, one of the most important documents in the entire divorce is usually the Matrimonial Settlement Agreement.
You may also hear it called an MSA, Property Settlement Agreement, PSA, Marital Settlement Agreement, or Interspousal Agreement. Different lawyers use different terminology, but the basic purpose is the same: to put the terms of your divorce settlement into writing. And the wording matters enormously.
A Matrimonial Settlement Agreement is a written agreement between divorcing spouses that spells out the terms they have agreed upon to resolve their case.
Depending upon the marriage, an MSA can address the marital home, bank and investment accounts, retirement assets, businesses, debts, alimony, insurance, taxes, personal property, and other financial issues. If the parties have children, it may also address custody, parenting time, child support, college expenses, and other responsibilities involving the children.
Some agreements are relatively straightforward. Others can be dozens of pages long because the family's finances or circumstances are complicated. The important thing is that the agreement should reflect the particular issues in your divorce.
I've always looked at drafting a Matrimonial Settlement Agreement a little like creating something from a blank piece of material. Before I start worrying about individual words and sentences, I need to understand what the finished agreement needs to accomplish for my client.
What assets need to be divided? What happens to the house? Is someone paying alimony? How are retirement accounts being handled? Are there unusual tax issues? If there are children, how will parenting time work? What happens when an unexpected situation arises several years from now?
That's why I don't think of an MSA as a document where you simply fill in a few blanks. Every family is different, and the agreement should be written with those differences in mind.
One of the most important parts of drafting an MSA is asking what could happen after the divorce.
Suppose the agreement says the house will eventually be sold. When does it have to be listed? Who chooses the real estate agent? Who pays the mortgage until then? Who pays for repairs? What happens if one person refuses to accept a reasonable offer?
Or suppose one spouse is keeping a retirement account while the other receives different assets in exchange. Is the agreement clear about exactly which accounts are being divided and which aren't?
The same issue arises with parenting provisions. Saying that parents will "reasonably agree" about something sounds perfectly fine when everybody is getting along. It can become a major problem several years later if they aren't.
Good drafting isn't just about describing the agreement you've reached today. It's about anticipating where confusion or disagreement could arise tomorrow.
When I'm reviewing a proposed agreement, I ask myself questions like these: Is the language clear? Could this sentence reasonably be interpreted two different ways? Does it actually accomplish what my client thinks it accomplishes? Are we leaving something important unanswered? Could this provision create an unnecessary problem several years from now?
That's where careful drafting becomes extremely important.
New Jersey courts generally place substantial weight on matrimonial settlement agreements that were entered into knowingly and voluntarily and are fair and equitable. Courts also look to the language of the agreement when determining what the parties intended.
In other words, you shouldn't sign an agreement assuming that you can simply fix unclear or unfavorable language later.
Usually, the first draft isn't the final agreement.
One attorney may prepare an initial draft based upon the settlement the parties have reached. The client reviews it carefully and discusses changes with the attorney. The draft then goes to the other attorney, who may propose revisions, additions, or different wording.
It can go back and forth several times. That's normal.
The purpose isn't simply to get signatures as quickly as possible. The goal is to end up with a document that accurately reflects the settlement and gives both parties a clear understanding of their rights and responsibilities after the divorce.
Once the agreement is finalized and signed, it can become part of the process of obtaining the Final Judgment of Divorce.
A Matrimonial Settlement Agreement may be one of the most important contracts you ever sign. Don't sign it because you're exhausted. Don't sign it because you want the divorce over tomorrow. And don't assume that a provision doesn't matter because you don't think it will ever become an issue.
Read it. Ask questions. Make sure you understand not only what you're receiving, but what you're giving up and what you'll be required to do in the future. A well-drafted agreement should reduce uncertainty after your divorce, not create more of it.
If you're considering divorce in New Jersey and want to understand settlement, property division, alimony, custody, and the other decisions that may eventually become part of your Matrimonial Settlement Agreement, my free Divorce Smarter Course explains the process in straightforward terms so you can make informed decisions before signing anything.
Until next time,
Steve