Preface

Introduction

This Second Edition carries on the mission of providing the “go-to” resource for practitioners to create comprehensive, clear and unambiguous agreements for divorcing couples and parents. With many new provisions, more options, expanded coverage on certain major issues, and more practice notes, this book should have it all covered from A to Z. It serves as a checklist of issues, an encyclopedia of options, as well as a master form template. And, it is all modifiable by you to suit your particular needs and style.

Instructions for Use

Create your own Master Agreement. Download this Master Agreement and make changes to suit your own personal preferences, e.g., change “Jane and John” to “Wife and Husband” or “Mother and Father” or “Plaintiff and Defendant,” etc. In same sex marriages the obvious name change works such as, “Jane and Sally” or “John and Sam” but the “Wife, Husband, Mother, Father” terminology will need substitution. Hopefully no one is still using, “Party of the First Part” and “Party of the Second Part.” Add, delete, or modify words, phrases, or entire provisions as you deem appropriate.

[Note: This book does contain gender stereotyping with “Jane” listed first and set up to receive alimony and custody of children, etc. It is not to be biased or insensitive but is done on purpose. This book is a tool and is carefully and logically organized into topics and issues. Knowing exactly where your Philips head screwdriver is in your toolbox saves you a lot of time and makes you efficient. Knowing exactly where all the “Janes” and “Johns” are, as well as where “alimony” “vehicles” “child support” “credit cards”, are in the Master Agreement, can be very helpful.]

[Note: This book does reference South Carolina for jurisdictional purposes but only for the convenience of the author. None of the provisions contained herein should be specific to or peculiar to South Carolina law but should be generic to all states and common law jurisdictions.]

Print a working copy. Print a working copy labeled for the case and use it in session as an outline, checking off the headings and paragraphs to be used and making changes and notes as needed.

Word processing. Open up your modified Master Agreement and save it as a new document under the name of the case you are working. Make global changes for the names and change “children” to “child” as needed. Delete all of the sections and paragraphs that you will not be using. Modify, add, subtract as needed for the remaining document. Create supplemental documents as needed – cover, table of contents, acknowledgments, certificates, exhibits, financial declarations, etc.

Draft. Print a working draft to review for any changes. Then print a draft for the clients. Mark it as “draft” and date. Review with clients and mediate further as necessary. “Draft” is important to show clients that the document is a work in progress and may need further discussion and development. Otherwise they may fear that it is their final decision on matters if they are still undecided. Having it dated keeps everybody on the same document if subsequent drafts are produced.

Final. Print the final agreement or memorandum of understanding for signature and attach the supplemental documents. Refer for legal action to take to court for approval and order.


NOTE: This Master Agreement form provides numerous alternative clauses for most of the topics and issues. Some provide certain rights and responsibilities and some waive certain rights and responsibilities. Make sure each paragraph is carefully read and drafted for the intended purpose!


 

Who Drafts the Agreement? Mediator vs. Attorney

First of all, non-attorney mediators probably should not prepare “Agreements.” It could be construed as the unauthorized practice of law in most jurisdictions. (See discussion on contract law below.) Non-attorney mediators probably should prepare a “Memorandum of Understanding” (MOU) or “Memorandum of Agreement” (MOA) instead. For non-attorney mediators using this form as a MOU or MOA, use the appropriate introductory paragraph, delete the “Recitals” section and begin with “Marital Rights & Obligations.” Then delete the “Administrative” section and use the appropriate “Signatures” section. Finally, do a global “Find & Replace” to substitute “MOU” or “MOA” for “Agreement.”

There is some debate as to whether mediators should prepare agreements (MOUs) or turn them over to an attorney for one of the parties. I believe that mediators should prepare the agreements (MOUs) for several reasons: (1) The mediator is a neutral third party. Language in an agreement potentially can be “spun” to favor one party or another which would be the natural inclination of an attorney representing either party. The mediator is ethically obligated to keep it neutral. (2) If an agreement (MOU) is drafted by one party’s attorney and the other party’s attorney has an objection then the mediator has to mediate that dispute – an unnecessary waste of time (and money). (3) The mediator was there when the parties discussed, negotiated and reached the agreement and, therefore, will remember the details, concerns and nuances of what was discussed and agreed to – all of which could get lost in translation if written by a third party trying to interpret someone else’s notes. Finally there is the “bias against the scrivener” doctrine – any ambiguity will be construed against the party (their attorney) that prepared the agreement unless both had a hand in it and that circumstance is set forth in the agreement. Better it be the neutral third-party mediator!

NOTE: This Master Agreement form provides numerous alternative clauses for most of the topics and issues. Some provide certain rights and responsibilities and some waive certain rights and responsibilities. Make sure each paragraph is carefully read and drafted for the intended purpose!

A Word About Words

First and foremost an agreement must be responsive to the needs of the parties and the children. To that end, it is most desirable to use language in an agreement that is user friendly while avoiding as much legalese as possible. However, an agreement must still pass court muster. While language in a legally binding contract or agreement must be clear and direct, in the context of divorce, language should also be positive, reinforcing, and encouraging for the future especially when children are involved. Cooperation should be emphasized and mechanisms should be put in place to encourage and provide for cooperation.

The level of detail in an agreement depends upon the level of cooperation of the parties. For example, a cooperative couple can live with something like, “Holiday time with the children shall be shared.” Whereas a non-cooperative couple will need the date, time, place and transportation details spelled out for the holidays even including what activities the children will or will not participate in.

In regards to children, the trend has been towards language that emphasizes the nurturing role of parents. For example, setting up a “Parenting Plan” as opposed to “Custody & Visitation.” The latter being more appropriate for prisoners or property. Unfortunately most courts still require the “custody” and “visitation” terminology in order to determine how to resolve a conflict by applying a hundred years of law. An agreement must still be legally enforceable. However, that does not mean that nurturing-focused language cannot be used. For example, one area that can and has been improved is how schedules have been established in agreements. Instead of parents “having” their children for certain specified times, the children will “be with” or “spend time with” or “share time with” each parent.

The choice of wording in a divorce and/or parenting agreement is much more dynamic than any other legal agreement. Therefore, drafting such an agreement takes on a whole new dimension in order to be responsive to the needs of the parties and the children.

Agreement as Contract

Marriage is interpreted as both a status and a contract. In the English Common Law tradition from which our legal doctrines and concepts have developed, a marriage was a contract based upon a voluntary private agreement by a man and a woman to become husband and wife. Today, the underlying concept that marriage is a legal contract still remains but due to changes in society, the legal obligations are not necessarily the same. Today marriage is still a legally sanctioned contract between a man and a woman and now includes same-sex couples. Entering into a marriage contract changes the legal status of both parties, giving them new rights and obligations.

The laws of divorce are also analogous to the laws of contracts. For example, commit a fault ground for divorce then the contract of marriage has been breached and can be terminated in a divorce action; or, if there was lack of capacity entering into marriage, then the contract of marriage is void and can be annulled in an annulment action.

Therefore, to write an enforceable agreement, basic contract law as well as the marital status of the parties should be addressed. The elements for drafting a marital agreement should include: (1) clear identification of the parties and the purpose to change marital status; (2) consideration – give and take on both sides; (3) full and fair disclosure of income, assets and liabilities (usually by attaching financial declarations); (4) clearly expressed terms and changes in status; and (5) free and voluntary execution by the parties.

In reviewing and approving an agreement, the family court, as a court of equity and the protector of children, will also consider whether it is fair and equitable to the parties under the circumstances, whether the parties entered into it freely and voluntarily and whether it is in the best interests of the children (if any) before making it an order of the court.

Enforcement

By the Court. Once an agreement has been reviewed and made an order of the court, it is then enforceable by the contempt powers of the court. Generally that could include: jail time, a fine, community service, and reimbursement of legal fees and costs. However, noncompliance must be found to be willful. The standard mechanism for bringing a violation of an agreement before the court is a “Rule to Show Cause.”

By Contract. Frequently, parties need to take care of financial and property matters before their agreement is made an order of the court. Financial institutions and other entities will want to see that the parties are legally bound by an agreement before loans and/or transfers are made. Another example would be in situations where one (or both) of the parties dies. Their estate(s) would be bound by a legally enforceable agreement that contains waivers regarding inheritance.

By Estoppel. Occasionally, as a party complies with their obligation under an agreement the other party may accept that benefit but then not comply with his or her reciprocal obligation and repudiate the agreement. For instance, the wife may sign over her interest in the marital residence to the husband but then he refuses to pay her share of the equity. If the agreement is not an order of the court or otherwise falls apart, equity – under the doctrine of estoppel – would require that the husband make payment or that the wife’s transfer be nullified and the matter would then have to be litigated or resolved in some other fashion.

Integration

It is imperative that all clauses in your agreement are in harmony and do not conflict. For example, if you provide for arbitration you must provide the statutorily required notice at the beginning of the document. Or, if you provide for a division of a qualified retirement account you should provide that it will be divided per a supplemental order known as a “qualified domestic relations order” and provide for the court to reserve jurisdiction for such. Or, if you provide for alimony, you shouldn’t provide for the filing of joint returns. Again, as to alimony, if you set up non-modifiable alimony, don’t provide conditions for modification. Of critical

importance is paying attention to the tax consequences of certain provisions in your agreement, particularly in regards to alimony and tax returns. Notes regarding basic tax tips are included throughout this book. Pay attention to them. There is nothing better than getting good, sound tax and financial advice from an expert! [Note: Alimony will no longer be deductible/includable beginning with orders and agreements entered after December 31, 2018, under the new “Tax Cuts and Jobs Act” signed into law on December 22, 2017, by President Donald Trump.]

Practice Notes

  • Keep Parties Out of Future Litigation!

Mediation. A provision for mediation of future disputes should be standard in every agreement except in cases involving domestic abuse or threats of such. Those should be handled on a case-by-case basis and if mediation is pursued, special protective provisions should be put in place. Also, in cases involving a dramatic imbalance of power, e.g., one party has an attorney and the other cannot afford one, special provision should be made for the latter to obtain legal advice since the mediator cannot provide such.

Arbitration can be used for all issues between the parties except issues of child custody and related matters. The family court has exclusive jurisdiction over those. Arbitration is particularly useful in situations involving the sale of real property such as the marital residence. Arbitration can be used for determining fair market value, selection of a realtor, setting the listing price, changes to the listing price, and accepting offers. Of course, arbitration can be used for the division of marital property in the first place. Note that any agreement containing an arbitration provision must contain notice of such on the first page for the provision to be enforceable. S.C. Code Ann. §15-48-10, et seq.

  • Use Experts!

Using a “Collaborative Law” practice approach to resolving complicated and/or difficult issues will assure both the parties, as well as the practitioners, that the best resolution is being achieved. For example: use appraisers for real property valuations and websites such as Kelly Blue Book (kbb.com) which work well for valuing vehicles; use financial experts – CPAs, particularly those that are a Certified Divorce Financial Analyst (CDFA) for property division, support, retirement accounts and QDROs, taxes, etc.; use mental health professionals to act as a divorce coach or a parenting coordinator. “Collaborative Law” is an alternative dispute resolution method that has two significant aspects. First, the attorneys sign a disqualification agreement that prevents them from taking the dispute to court (although the parties could hire other attorneys to go to court) and second, the parties utilize other professionals targeted to their specific needs as set forth in the foregoing examples.

  • Attach Exhibits for Explanation & Clarity!

For example: any report or document produced by an expert described above; the parties’ Financial Declarations; an Equitable Apportionment of Marital Property Worksheet; an amortization schedule for installment payments of equitable distribution; calculations for reduction of future payments to present value; etc.

  • Reserve Jurisdiction of the Court!

Enforcement. Once an agreement is approved and made an order of the court, that court has continuing jurisdiction for enforcement. No special provision is necessary. If an agreement is not made an order of the court, enforcement will have to made by other means. However, the family court will always have jurisdiction over matters concerning minor children. The court may or may not enforce provisions in an unapproved agreement. The court would have to review and approve it first.

QDROs. It is imperative that a court-approved agreement reserve jurisdiction to issue a supplemental order known as a Qualified Domestic Relations Order (QDRO). Once a court issues its final order in a case, it cannot issue another order in the case without a specific reservation of jurisdiction or another action being filed, served and brought before it. Also, jurisdiction should be reserved for amendments. Some financial institutions are notorious for sending back QDROs for amendments even though you meticulously followed their requirements and instructions.

Feedback

This work is not perfect (yet) so please give feedback – be it good, bad or ugly. All comments are welcome. This is a work in progress. If you should find and be kind enough to report a problem or defect with this document or would just like to comment or make a suggestion, please contact:

Bultz Law Offices
417 79th Ave N
Ste A
Myrtle Beach, SC 29572

(ph) 843-626-2006
(fax) 843-839-9496
bultzlaw@gmail.com