The Better Chancery Practice Blog

Imagine having this nightmare:

You represent the husband. He has $376,000 in his securities account. You negotiate a property settlement agreement by which the wife will receive $203,200 from the account, and he will own the remaining $172,800. Couldn’t be plainer or more clear-cut. A few months drag by before you finally get the QDRO drafted and approved by the court. You ship it off to the plan manager, who calls you and tells you that the account is now only worth $204,000, and what exactly is it that you would like her to do. At this point in the nightmare, you wake up in a cold sweat.

Unfortunately for the parties in In re Dissolution of  Marriage of Wood, 35 So.3d 507 (Miss. 2010), the nightmare was all too real. The facts set out above are the facts in their case. The former Mrs. Wood sued to collect her entire amount due under the agreement, and Mr. Wood took the position that sticking with the numbers in the property settlement agreement was an impossibility, and to grant Mrs. Wood her relief would produce an unfair and inequitable result.

Chancellor Dorothy Colomb ruled that the parties had actually negotiated an agreement whereby Mrs. Wood would receive 54% of the account balance at the time of the divorce, and Mr. Wood would receive 46%.

In affirming the chancellor, the Supreme Court addressed valuation dates, impossibility of performance and canons of construction. You can read the decision to get an appreciation for the complexity of legal issues that the draftsmanship created in this case.

The cardinal point for practitioners, however, is best summed up in the court’s own language at page 515:

“As this case illustrates, incorporating an estimate of an asset’s value into a property settlement agreement can cause problems when the parties later try to divide the asset, and the estimate turns out to be incorrect or inaccurate. Therefore, we make the following recommendations for the benefit of the bar. Where the value of an asset must be estimated because of the inherently indefinite or fluctuating nature of the asset itself, we recommend the use of percentages when setting forth the asset’s intended distribution in a property settlement agreement. Where the value of an asset remains sufficiently concrete or static, however, we recommend the use of specific dollar amounts.”

Mrs. Wood expected to get $203,000, and that’s what she negotiated for.  Instead, she got $110,160, or $93,000 less than what she expected. The lesson is to think about what you’re doing and what could or might go wrong, and how you can guard against it.

My 8.05 financial statements stink.  How can I improve them?

Here are Ten Tips for More Effective Rule 8.05 Financial Statements.

Is my estate ready to close?

Check out this Checklist for Closing an Estate.

I think I need to file a habeas action.  Any tips?

This Habeas Corpus Step by Step should help.

One more time: what are those child custody factors I need to prove at an upcoming trial?

The Albright factors are what you’re looking for.

Help! We need to sell some real property in an estate, and I don’t know where to start?

How to Sell Real Property in an Estate may be just what you need.

I’ve been asked to handle a minor’s settlement for a Jackson firm, and I’ve never done it before.  What do I need to do?

This Outline for Handling a Minor’s Settlement will get you started.

My mail has an MRCP 41(d) notice in it this morning.  I remember you said something about it, but I don’t have time to look for it.  Can you remind me what I am supposed to do?

<Sigh>  Here’s a post on what to do When Rule 41(d) Comes Knocking at Your Door.

I need to prove the tax effects of alimony, but my client can’t afford to hire a CPA to come testify.  Any ideas on what I should do?

Try looking at Proving Tax Effects of Alimony.

My Chancery Judge is really nitpicky.  How can I draft my adoption Complaint to satisfy him?

Are you talking about me?  Whatever.  Here is a post on pleading Jurisdiction for Adoption.

Every time I go to court in Jackson, the lawyers there snicker about my countryfied attire.  Any suggestions?  I cannot afford another $100 contempt citation for punching out a lawyer in the courtroom.

You probably need to be charging more so that you can afford either a better wardrobe or more contempt fines.  Until you do, try reading “High Waters” and Burlap Suits.  It won’t change anything, but it may help you to feel better.