Drafting a Divorce Agreement

Many Divorce lawyers think that once they have reached an “agreement in principle” with the other side, the hard work is over and that the process of drafting a divorce agreement is simply a formality.  The experience of one person clearly shows that once an “agreement in principle” has been reached, the hard work is only just beginning.

I was retained about a year an a half ago to assist a man who was being sued on a divorce agreement (drafted by another law firm) that dealt with the division of marital property.  The agreement had been approved as an order of the Family Court 3 years earlier and had not been appealed or challenged in any way. As a result, it was generally unassailable.   This did not prevent an unscrupulous attorney from suing my client anyway as the parties were both very wealthy and my client’s former wife was willing to pay her attorney an obscenely large retainer.

After about 9 months of litigation, the matter was submitted to arbitration. As expected, the arbitrator’s award denied all the relief the wife had requested in her lawsuit.  However, the arbitrator reached a conclusion regarding an issue that was not raised by the former wife that resulted in a  payment of nearly $150,000 from my client to the former wife!  The divorce agreement required a payment of $4,300 per month to the former wife until a certain condition had been satisfied.  These payments were being made from joint marital assets being held in trust by my client until such time as the condition had been met. The arbitrator found that the agreement did not say that these payments were to be credited to wife “as an advance on equitable distribution”.   As such, since the payments came from joint marital assets, the arbitrator awarded these payments to wife, in addition to her 50% division of marital assets!  In other words, failure of my client’s former attorney to specify in writing that these payments were “an advance on equitable distribution” (which was the clear but unstated intent of both parties) caused my client to lose nearly $150,000!  Thats $25,000 per word!!!

As I said, both husband and wife are very wealthy, so the impact of this ruling was less significant as it could have been, but the moral of the story is clear:  Attorneys can not simply memorialize in writing an “agreement in principle”.   Once an “agreement in principle” has been reached, the real work of drafting the details of the agreement begins.  In this case, a little time and effort on the part of my clients former attorney would have saved him a significant amount of money.

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