Divorce Settlement Agreement

A divorce settlement agreement records the terms agreed between spouses about the practical and financial consequences of their divorce.

Where the parties are able to agree on the issues between them, the divorce can proceed on an unopposed basis rather than requiring the court to decide each disputed issue. The Department of Justice distinguishes between an unopposed divorce, where the parties are in agreement, and an opposed divorce, where they are not.

A settlement agreement is sometimes also referred to as a deed of settlement or consent paper.

It does not itself end the marriage. A divorce can only be granted by a court. The agreement records what the parties have agreed and can then be placed before the court as part of the divorce process.

What Can a Divorce Settlement Agreement Cover?

The contents will depend on the marriage, the matrimonial property regime, the financial circumstances of the parties and whether there are children.

A settlement may deal with:

Assets and Liabilities

The parties need to determine what will happen to the assets and liabilities affected by the divorce.

Depending on their matrimonial property regime, this may include property, vehicles, investments, savings, businesses, household contents, debts and other financial interests.

The Divorce Act 70 of 1979 specifically allows a court granting a divorce to make an order in accordance with the parties’ written agreement regarding the division of their assets.

The particular consequences of the divorce will depend on whether the marriage is in community of property, out of community of property with accrual, or out of community of property without accrual.

Where substantial assets, businesses, trusts, complex investments or significant liabilities are involved, independent legal and financial advice can be particularly important before an agreement is finalised.

Pension and Retirement Interests

Retirement and pension interests can be an important part of a divorce settlement and should not simply be assumed to be dealt with because other assets have been divided.

South African divorce law contains specific provisions dealing with pension interests, and the wording used in a settlement and subsequent divorce order can have important consequences.

Where retirement interests are involved, I would strongly encourage both parties to obtain appropriate legal advice before signing the final agreement.

Spousal Maintenance

A settlement agreement can also record what the parties agree regarding spousal maintenance.

That may mean that no spousal maintenance will be payable, or it may deal with the amount, duration and circumstances in which maintenance will be paid.

Section 7 of the Divorce Act allows a court to make an order for spousal maintenance in accordance with a written agreement between the parties. Where there is no agreement, the court may consider factors including the parties’ existing and prospective means, earning capacities, financial needs and obligations, age, duration of the marriage and previous standard of living.

This is another area where apparently simple wording can have long-term consequences, so independent legal advice is advisable.

Children and Parenting Arrangements

Where there are minor or dependent children, the settlement cannot be approached only as an agreement between the adults.

The Divorce Act provides that a divorce decree may not be granted until the court is satisfied that the arrangements made or contemplated for minor or dependent children are satisfactory or the best that can be achieved in the circumstances.

Parenting arrangements may therefore deal with matters such as:

care and residence, contact with each parent, parental responsibilities and rights, schooling, holidays, major decisions, communication between parents and maintenance.

Where more detail is needed, these issues are often dealt with in a separate Parenting Plan, which can then be incorporated into the wider divorce settlement.

The Office of the Family Advocate may assist parents with disputes about parental responsibilities and rights and can assist with parenting plans and responsibilities and rights agreements.

Child Maintenance

Child maintenance should also be dealt with carefully.

A settlement may include the monthly contribution each parent will make, but there can be considerably more to consider than one monthly number.

Parents may need to deal with medical aid, uncovered medical expenses, school fees, uniforms, transport, extracurricular activities, tertiary education, annual increases and unexpected expenses.

I deal with these issues in more detail on my Maintenance Plans page.

Reaching Agreement Through Mediation

A divorce settlement agreement does not have to emerge from adversarial negotiation between attorneys.

Where mediation is appropriate, the parties can work through the issues together with the assistance of an independent mediator.

This can include identifying all the matters that need to be dealt with, clarifying where the parties agree and disagree, exchanging relevant financial information and working through different settlement options.

My role as mediator is to assist with the negotiation process. I do not decide what either party must accept and I do not provide legal advice to one party against the other.

Because a divorce settlement can affect property, maintenance, pension interests and other important legal rights, parties should have the opportunity to obtain independent legal advice before signing a final agreement.

From Agreement to Court Order

A settlement agreement reached between the parties does not automatically become a court order.

The parties still need to proceed through the divorce process and place the agreement before the court.

Section 7(1) of the Divorce Act gives the court the power to make an order in accordance with a written agreement dealing with division of assets and spousal maintenance.

Importantly, the court is not simply a rubber stamp. The Constitutional Court has confirmed that a court retains discretion when considering agreements placed before it in divorce proceedings.

Once a settlement agreement is incorporated into the divorce order, it has the force and authority of a court order.

What If We Agree on Some Issues but Not Others?

It is not necessary for mediation to resolve every issue in order to have value.

The parties may reach agreement on parenting but not finances, or settle most financial issues while one matter remains disputed.

Resolving some of the issues can narrow the dispute considerably and allow legal representatives or the court to focus only on what remains unresolved.