DIVORCE AGREEMENTS,SHOULD THEY SURVIVE OR MERGE?

By Sari M. Friedman, Legal Counsel
FRANY and FRALI

Should your divorce agreement survive the judgment of divorce? Or should it be merged into the judgment of divorce? And does it really matter?

The typical separation agreement, or a stipulation of settlement resolving a divorce should state whether the agreement is to survive the judgment of divorce as a separate contract, or whether it should be merged and incorporated into the judgment of divorce thus allowing for modification similar to a court order. Which should you choose?

Where it Does Not Matter

Your decision will have no effect on the issue of custody and visitation because these issues can be modified until a child reaches the age of 18. The court will base its decision upon whether there is a change of circumstances that render it in the child's best interest to modify the custody and/or visitation provisions.

Your decision will also have no effect on the issue of equitable distribution of assets. The Court will not modify the terms of equitable distribution.

Where it Makes a Significant Difference

  1. Spousal Support/Maintenance - If you have stipulated in advance that your divorce agreement will be merged into the judgment of divorce, then the court can later modify the duration and amount of maintenance if circumstances are presented to warrant the raising or lowering of the amount. However, if the divorce agreement survives the judgment, it is a contract that the court may not modify. The one exception to lengthen or increase the amount would be if the receiving spouse were to become a public charge, i.e. welfare recipient. Since the court cannot modify the agreement, in order to reduce the amount, the paying party would have to prove extreme hardship, i.e. that there are no assets and insufficient income to satisfy the obligation.
  2. Child Support - If the agreement on divorce merges into the judgment, then the court may modify that support upward or downward when a change of circumstances may warrant modification. On the other hand, if the agreement survives the judgment, then the standard for upward modification is an unforeseen and unanticipated change of circumstances that would warrant an increase in support. However, a request for a downward modification in support is significantly harder to prove, and becomes something to think about when deciding whether or not to elect this option.
  3. Right to Sue - If the agreement survives as a separate contract, then even if the judgment is modified by the court, the other party can sue under contract law to enforce the contract obligation and obtain a money judgment for what is owing and seek to collect it. If, however, the agreement is merged and the judgment is modified then the payer cannot separately sue for enforcement of the contract. Indeed, in this situation there is no separate surviving contract on which to sue.

The Compromise Option

It doesn't have to be totally one way or the other. The parties can agree in advance that certain portions of the divorce agreement will survive and other portions will be merged. For example, parties may agree that the divorce agreement will survive except for the child support section, which will be merged into the divorce judgment. This way, both sides know that they have a finite agreement on spousal support for a fixed duration which is frequently five years or less . However, child support which normally lasts until a child is age 21 may be modified if the needs of the child(ren) increase or if the payer suffers a substantial decrease in income.

Basing the Choice on Personal Circumstance

Are you better off having the divorce agreement or parts of it survive or merge with the divorce judgment? That decision should be based on the individual circumstances of your case. If you are the payer, how much have you agreed upon for support? What are your future income prospects?

The important thing is to be aware of the distinction between merging the agreement and having it survive. It is indeed an important point to discuss with your lawyer. Call us today to discuss this matter further.