Georgia Divorce Settlement Agreements Explained

What exactly is a settlement agreement?

Settlement agreements are best defined as a written contract between the parties to a divorce lawsuit in which they agree to all issues of their case. This means that the parties have agreed to matters relating to alimony (spousal support), child custody, child support, and division of property and debt. These agreements can either be incorporated into an order of court (i.e., permanent) or kept separate (i.e., temporary). If incorporated into an order of court, the agreement becomes a legally binding order of court on the parties. The advantage to a settlement agreement is that it provides the ultimate control to the parties to a divorce lawsuit over what the law provides to them. In Georgia, when spouses divorce, the Court may take their property at fair market value and divide it equally. Parties who wish to divide property in a fashion other than equal, however, must do so voluntarily by agreement. This agreement is binding and enforceable unless the divorce is not granted. Additionally , this agreement may be the tool to obtain a favorable ruling from the judge in relation to a contested issue of the divorce.
In many cases, the parties are very close to being in agreement on all issues but for one or two matters. In this situation, a settlement agreement allows the parties to resolve the issues they agree on and to leave to the court the issues on which they disagree. For example, the majority of courts in Georgia require the parties to an action for divorce to mediate their claims. Mediation is a time when the parties meet with a neutral third party try to resolve their claims. Many times, mediation results in a number of issues being resolved; however, even though there are a few matters that remain, the parties would like to resolve them without a hearing. In the example above, the parties could have a settlement agreement in which they agree to all issues except custody of their child. The custody agreement is left to the Court at trial.

The essential elements of a divorce settlement agreement

The key components of a divorce settlement agreement are as follows: To the extent that there are real estate assets, contents assets, personal property assets, and/or bank accounts, the parties will set forth each asset, its current value, whether it is being awarded to one party or the other, and if there is provision for buyouts to other party, the amount of such buyout. This is divided into personal property, contents, real estate, bank accounts, automobiles and other vehicles, retirement benefits, etc. This area addresses the issues of health insurance and life insurance. In certain situations, one party is entitled to receive spousal support (or alimony) from the other. Georgia has no definitive formula for calculating amounts of spousal support. Therefore, parties engaged in negotiations have wide latitude in determining an appropriate amount. Generally, there are provisions that spousal support will be terminated upon the first to occur of remarriage, death, or expiration of time. In most cases, minor children are involved. This section provides for the custody of the children, including decisions on whether primary physical custody is granted or joint physical and legal custody is granted with either parent granted primary physical custody. It also sets forth the visitation schedule with the non-custodial parent. This Section addresses issues of visitation.(Note: we shun the terms "visitation" and "visitation rights", prefering, instead, "parenting time" and "parenting time rights"); Generally, any child support calculation is done pursuant to Georgia Child Support Guidelines Form 18-1 which is set forth in the official Georgia Code. These guidelines include haircuts, over-the-counter medication, school supplies, misc. minor expenses not included under guidelines. This section addresses issues regarding tax dependency exemptions. Generally the exemptions will be split between the parties. In most instances health insurance coverage will be addressed. The parties shall divide all debts including those he going into the divorce and those that the parties incurred after the marriage. The parties will address what they call miscellaneous matters. This section can also be labeled miscellaneous or other matters or several other labels. The parties will agree that the Agreement will be governed by the laws of Georgia. Generally, parties who reside in the same State should resolve their matters according to the laws of their State of residence.

The process of ratifying a settlement agreement

The procedure for making a settlement agreement legally binding is not as clear. Here, in this state, a settlement agreement traditionally is not enforceable unless there is evidence that it was made in open court. O.C.G.A. § 19-6-9. (See also Aicher, Family Law in Georgia, 3d Ed.) As the Aicher text notes, however, just because something has happened in open court does not mean that it really qualifies, for example, the requirement that there be a disposition of the issue of periodic alimony requires that there be a decision made, not just some sort of comment in passing. And this makes sense, there is no way to oppose something that is not announced publicly. It seems to be a truism that it is much better to have something in writing and have the agreement entered as an order of court. In fact, many will argue that the law should always require a court order for anything that deals with alimony or marital assets and as an alternative to the specific requirement that there be an oral pronouncement in open court. The law may yet go there. As it stands, agreements that do not qualify under that rule, although not enforceable at law, can be admitted as evidence of intent. That’s what happened in the case of Redd v. Redd, 286 Ga. App. 197 (2007). It is also possible to approve a settlement agreement by treating as a formal "uncontested" hearing between the parties. This is sometimes done in cases where there are no children involved. In that situation, the judge announces in open court, and enters an order for the parties to sign. There is no oral proof offered at that time. Instead, proof simply is submitted to the court for signature. In that case, the settlement agreement itself is incorporated into the final judgment or decree of court. Again, there is no making the order absolute until the formal entry of the judgment, but it is also possible for the court to make a conditional order, and then, for instance, give the defendant "x" number of days to make payments or file a response contesting the order. In other words, it is not merely a matter of making up an order, sending it to the spouse (or the spouse’s lawyer), and hoping that the order gets signed and returned. Even in those cases where parties go through the formality above, it can be necessary to in fact have a follow-up order entry the final time.

Five common pitfalls to avoid

This is also the time when we see common mistakes in settlement agreements. There are basically three "deadly sins" I see when I review settlement agreements. I will cover all three of these deadly sins individually. The first one is:
Not being "statutorily compliant" with your agreement – This is the most common problem I see and unfortunately, it occurs far too often. There are certain things that the Georgia Statutes require in order for a settlement agreement to be valid and enforceable. For example, in my next blog entry, I will highlight the requirement for a specifically-worded provision in the child support section for agreements entered into anywhere other than the Atlanta Judicial Circuit. I have seen agreements invalidated by Courts for not complying with this requirement.
If your agreement is not statutorily compliant , the Judge will not sign the Final Order of Divorce, which is supposed to document the agreement. You then have a choice: either have a hearing to let the Judge know your agreement is still valid (but he just cannot sign the Final Order of Divorce) or revise the agreement to fix the problem.
To avoid this mistake, it is imperative that you hire a lawyer to draft your settlement agreement – your lawyer will know what is required statutorily and will be able to advise you on how to draft an enforceable settlement agreement. (And when I say "lawyer," I mean to say it has to be a Georgia-licensed attorney, not an attorney in your home state. A Georgia attorney can best advise you on what Georgia law requires.)
In my next blog entry, I will address the second common "mistake" I see in settlement agreements in divorce cases.

The role of mediation in settling a case

When people get divorced, one hurdle they must clear is the resolution of issues relating to property, use of marital assets, payment of debts, custody and any other matter deemed relevant to the marriage. To the extent you and your spouse cannot reach an agreement on those matters, the court will rely on and be guided by Georgia law. Not every issue has to be settled before court can enter the final decree and this speaks to a crucially important point about divorce. After marital issues are agreed upon, and sometimes even discussed, the parties need to attend to procedural matters which are necessary to obtain final judgment and after that, to implement the terms of that final judgment. One way that settlements can be reached is through mediation, which is a structured process whereby a neutral mediator guides the parties toward compromise. Mediation actually is a collaborative process undertaken in an effort to resolve issues amicably. Attending mediation puts husband and wife in the same room for a few hours under a controlled setting. If you are getting along, it will simply move your case further along in the process. If you are not getting along, having a mediator there to help the two of you control emotions and guide you toward a settlement is critical. If no settlement is reached during this process, the mediator will often provide the judge what are known as "mediator notes" for inclusion in the file. The parties, if represented by counsel, will have already negotiated much of the agreement and this is not a good time to pull out. Often times, after mediation fails, parties can reach a negotiated agreement with their respective lawyers and this saves a great deal of time and money.

Amending and enforcing a settlement agreement

In certain circumstances, a settlement agreement may be modified or enforced even after the final decree is entered in Georgia. Otherwise, a settlement agreement will become part of a final decree or judgment and will have the same binding effect as any other provision contained in that document.
There are limited circumstances present in which a former spouse can pursue a modification or enforcement of a settlement agreement after entry of judgment. Some of those circumstances include:

The settlement agreement was incorporated into the final decree;
The agreement was merged into the final decree;
The settlement agreement was incorporated into the initial judgment but explicitly reserved subject matter jurisdiction for subsequent modification; or
The final decree contains language which allows a party to return to a court to enforce, modify, or seek another form of relief for a violation of the terms or conditions of the settlement agreement .

If the submission agreement contains language such that disputes about enforcement, arising out of the submission agreement, are to be resolved via a contempt hearing before a domestic relations court, a judge will enforce the agreement unless it decides that to do so would cause inequitable results. If the agreement has not been incorporated into the final decree, the court will not have jurisdiction over the matter because the Settlement Agreement, being the basis for the action, would be a new contract claim.
Now, if the submission agreement has been incorporated into the final decree, then the court will have jurisdiction to hear the case since the court now has jurisdiction over the agreement, unless a contrary position occurs under the terms of the settlement agreement.