The Better Chancery Practice Blog

Every lawyer has his or her own idea about what needs to be included or not included in a property settlement agreement (PSA) for an irreconcilable differences (ID) divorce. Here are some provisions I have seen in PSA’s through the years that you might find helpful in specific instances.

Protection from debts incurred by the other party:

Debts. If either party has made any debt in the name of or against the credit of the other, the party making such debt shall be solely responsible to pay it promptly and in due course, and to indemnify the other. There are no other joint debts of the parties. Each party shall be solely responsible to pay the debts incurred by him or her in their own name. From and after the date of this agreement, neither will incur any debt in the name of or against the credit of the other, and neither will do any act or thing to impair the credit of the other. Each will indemnify and hold the other harmless for his or her obligation to pay any debt provided for in this Agreement.

Attorney’s fees:

Attorney’s Fees and Costs. Husband and Wife each agree to pay his or her own separate attorney’s fees incurred in obtaining a divorce on the sole ground of irreconcilable differences.

Where other documents will be necessary to finalize the entire settlement:

Execution of Documents. Husband and Wife each agree to execute and deliver promptly any and all documents, papers, agreements, assignments, titles, bills of sale, contracts, deeds, Qualified Domestic Relations Orders (QDRO’s), and other papers of every kind and nature whatsoever deemed necessary by the other to effect the spirit and intent of this Agreement.

To confirm and ensure that there are no unwritten or side agreements:

Entire Agreement. This Agreement constitutes the entire agreement between the parties, and each acknowledges that there are no other or further agreements not expressly included herein. This Agreement is contractual, and not merely a recital. The parties agree that no part of the consideration for this Agreement is any promise, inducement, representation, or agreement to obtain or maintain any divorce action in any Court. Each party acknowledges that this Agreement is entered into freely and voluntarily, without force, duress or influence by any person.

Release of all claims:

Final Settlement and Release of all Claims. Husband and Wife acknowledge that they have read this Agreement and carefully considered the same, and do further acknowledge that this Agreement permanently and finally resolves all marital and personal disputes between them, including, but not limited to, any and all claims for alimony, personal injury, defamation, invasion of privacy, torts of every kind and nature, and division of property rights between the parties hereto, and they do hereby mutually release each other from all claims that each has against the other, other than as specifically set forth in this Agreement, .

Where the parties want the agreement to be enforceable whether or not approved by the court*:

Approval by Court. The parties agree and stipulate that their Agreement shall be made a part of, and shall be incorporated into the Court’s Judgment of Divorce on the ground of irreconcilable differences. The parties understand and acknowledge that, although this Agreement is subject to approval by a court of competent jurisdiction in order for it to be incorporated into and made a part of any Judgment of Divorce between them, it shall nonetheless be a binding and lawful contract between them, and that its enforceability shall not be affected in any way by its approval or non-approval by any court in connection with any divorce action between them. If either party files any contest to a divorce between them, this Agreement shall nonetheless be enforced in all of its terms.

A useful provision to ensure that there are no open-ended obligations:

Date of the Agreement and Time to Perform. The date of this agreement shall be the date when it has been executed by both parties. If no specific time limit is stated for taking any action prescribed in this agreement, then the parties agree that all such actions will be accomplished in a reasonable time, but not later than thirty (30) days from the date of entry of any judgment of divorce between the parties on the sole ground of irreconcilable differences.

Where one party is not represented:

Representation. Husband is represented by [attorney]. Wife is not represented by an attorney, and she is representing herself, in connection with the execution of this agreement and in connection with any divorce proceeding between the parties. Wife is fully competent to do so, and she is under no legal or other disability. Wife understands that the law firm of [attorney] represents Husband alone, and Wife further acknowledges that she has relied on her own best judgment in connection with the execution of this agreement and in connection with any divorce proceeding between the parties, and that she has neither received, nor expects to receive, any counsel or advice from Husband’s attorney. Wife understands that she is and has been free to consult with any attorney at any time in connection with the execution of this agreement and in connection with any divorce proceeding between the parties. Wife understands that she should not sign this Agreement unless and until she understands all of its provisions in full.

Clarification that tax advice has not been rendered:

Tax Advice. The parties acknowledge and understand that there may be certain tax consequences pertaining to this Agreement, and that each of them should obtain independent tax advice from qualified tax accountants or tax counsel prior to signing. Husband acknowledges that he has not received tax advice from his attorney in connection with this Agreement and a divorce.

Closing the door on a party claiming later that the property should have been appraised:

Fair Division. The parties agree that this Agreement is a fair division of their assets and a fair allocation of debt between them. They acknowledge that the most accurate method of determining values of assets would be to have them appraised, but they agree to save time and money as to values by relying on their own best judgment.

If a former name is to be restored, it is a good idea to include that agreement in the PSA:

Name Change. Wife may, at her sole election, have her name changed to a name of her choosing in any final Judgment of Divorce between the parties.

There is no guarantee that any of these provisions will be effective in any given court. I am offering them as a suggestion for points you might want to cover in your own PSA’s. There are certainly better or other ways to state the same points.

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* “Today we hold that a property settlement agreement executed in contemplation of a divorce based upon irreconcilable differences is unenforceable when one party withdraws from the irreconcilable differences proceeding and seeks a divorce on grounds other than irreconcilable differences. Much confusion may be avoided by inserting appropriate language within the property settlement agreement which specifically addresses this contingency … the contract should specify, with particularity, within its four corners, whether it is to be limited to an irreconcilable differences divorce or whether it is intended to be binding in a divorce granted on any other grounds.” Grier v. Grier, 616 So.2d 337, 341 (Miss. 1993) [Emphasis added]. The unmodifiable (i.e. property settlement) provisions of the PSA  may be enforced by the court sans a divorce, but the modifiable (i.e. child support and custody and periodic alimony) issues may not.