Property Division is Permanent
SC Court of Appeals re-affirms the rule that final property division agreements cannot be modified.
On August 7, 2019 in the matter of Thompson v Thompson the SC Court of Appeals overturned the Trial Court which had granted relief to the Appellee pursuant to Rule 60(b)(5) of the SC Rules of Civil Procedure. The Trial Court found that due to the passage of time and other circumstances the final agreement of the parties, entered on October 8, 2010, was now inequitable and should not have prospective application. The subject of the dispute was piece of real property that the parties agreed would remain in possession of Wife until 2025 unless sold. The Trial Court ordered the property to be immediately sold and proceeds divided.
The law in South Carolina is exceedingly clear that the family court does not have jurisdiction to modify a final property division order unless jurisdiction was reserved. The Thompson’s made no such reservation and, in fact, stated that their agreement was final and that no court would have jurisdiction to modify its terms. The Court of Appeals noted that the only exception was for clerical mistakes in only in the most exceptional circumstances.
The problem as I see it is that the parties agreed to maintain their joint equity in a piece of real property for 15 years. Thompson illustrates the problems that can occur when all marital property is not completely apportioned at the time of divorce. Divorcing couples don’t get along by definition. To allow divorcing couples to continue to maintain joint interest in marital property for over a decade after a divorce is just setting them up for trouble.
The better practice is to completely resolve all property issues in a written agreement at the time of divorce or separation. Use of Software, such as Settlyd’s Asset Division sheet, can reduce uncertainty by clearly setting forth the apportionment of all marital property in an easy to understand worksheet. This worksheet can then be attached as an exhibit to a property Settlement Agreement providing a visual picture of the financial terms of the agreement.
The Thompson’s may have been stuck, however. The real estate market was terrible in 2010 and the home may have had negative equity. Perhaps a shorter period of joint ownership after divorce would have sufficed? The bottom line is that unless there is a clerical mistake, our family courts are without jurisdiction to change the terms of a property settlement and can only correct clerical errors in a way that does not extend to changing the scope of the judgment.
The moral of the story is to be careful when dividing marital property and use software, such as Settlyd’s Asset Division sheet, can make sure all parties clearly understand the terms of their agreement.