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Can My Spouse and I Reach a Settlement Before Filing for Divorce?

 Posted on November 08, 2019 in Complex Divorce

TX divorce lawyerA high asset divorce does not necessarily involve contested litigation. In many cases, the divorcing spouses are eager to resolve their outstanding issues and end their marriage as quickly as possible. To facilitate this, Texas law does allow for mediated settlement agreements (MSA).

An MSA is a legally binding contract signed by both parties. A mediator serves as a neutral facilitator who assists the parties, and their attorneys, in reaching an agreement. But unlike an arbitrator, the mediator does not have the legal authority to force a decision. The spouses are still free to abandon mediation at any time and take their case to litigation.

Texas Supreme Court Clarifies Law Governing Mediated Settlement Agreements

The Texas Supreme Court recently addressed an important legal question regarding MSAs: Are such agreements enforceable if they are signed before either spouse actually files for divorce?

The case before the Court involved a couple that married in 2004. Ten years into the marriage, the wife decided she wanted to end the relationship. She located a mediator to assist her and the husband in drafting an MSA.

The parties signed the final MSA in February 2015. The agreement covered the division of marital property as well as custody arrangements for the couple's two children. Nine days after the agreement was signed, the husband formally filed for divorce in Travis County. In his petition, the husband asked the judge to confirm the terms of the divorce as outlined in the signed MSA.

The wife did not appear for the court hearing on the husband's petition. Indeed, she never even received notice of the hearing. In her absence, the court granted the husband's petition for divorce and to enforce the MSA.

The wife subsequently asked the judge to set aside the judgment and grant a new trial. Among other arguments, the wife said the MSA could not be enforced under Texas law because it was “signed before a suit for divorce was in existence.” The trial court denied these motions and affirmed its earlier judgment.

Although an intermediate appeals court later sided with the wife and held the MSA was unenforceable, the Supreme Court said the fact the agreement was signed before the husband filed for divorce did not render it invalid. The Supreme Court noted that while a judge “may” refer a pending divorce case for mediation, this did not mean that filing for divorce was a necessary condition for spouses to enter into MSA mediation on their own initiative, as was the case here.

That said, the Supreme Court held that in this particular case, the wife was entitled to notice of the hearing to confirm the MSA. Reaching a settlement does not make the divorce “uncontested,” the Court observed. And in any event, notice to the parties is a basic requirement of due process in any legal proceeding. The Court, therefore, returned the case to the trial court for further proceedings.

Contact a Qualified Austin, TX, High Asset Divorce Lawyer Today

The Supreme Court's decision makes it clear that spouses do not need to wait for the filing of formal divorce papers to begin the process of resolving their financial issues. If you need advice from an experienced Austin high asset divorce attorney on how to proceed in such situations, contact Powers Kerr & Rashidi, PLLC, at 512-610-6199 today to schedule a consultation.




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