One Size Does Not Fit All: Special Considerations for Spousal Support Provisions in Marital Agreements - April 2012
Spousal support issues in divorce proceedings will be decided by the court if the parties are unable to reach an agreement. Virginia offers no uniform formula for determining whether or not permanent spousal support should be awarded, nor is there such a formula for determining the nature, amount or duration of spousal support. Instead, the trial court makes these decisions based upon a number of factors and circumstances for each particular case. Marital agreements, also known as separation agreements or property settlement agreements, are great tools for resolving dissolution issues without the risk and expense of trial. However, there are many different ways which marital agreements can address the modification, duration or termination of spousal support and the failure to consider the effects of each during the negotiation process could cause unintended financial consequences for either party.
In Virginia, the trial court’s statutory authority to modify spousal support on grounds other than cohabitation, remarriage or death is limited if the amount of the initial spousal support award was decided by the agreement of the parties instead of by the trial court. In these former situations, the court must honor the parties’ agreement and cannot modify spousal support, except as provided in the agreement. The court’s statutory authority to modify spousal support is effected by both the presence and absence of modification language in a parties’ agreement. Modification provisions can be limited to the occurrence of certain events set forth in the parties’ agreement, can allow for modification of spousal support at the court’s discretion, or can even be partially non-modifiable for a certain number of years following the divorce. The effects of each, as well as the absence of a modification provision, should be considered carefully.
For example, under the provisions of an agreement in one Virginia case, husband agreed to pay wife a certain amount of monthly spousal support for a defined duration of approximately thirteen years. Their agreement provided that either party could petition the court for an increase or decrease of spousal support. Soon after the divorce, the former husband was laid off from his job, where he was earning a six-figure salary. The former wife, who had not been employed during the marriage, had since obtained employment with a salary of about $46,000 per year. The former husband petitioned the court to modify spousal support but, because their agreement only provided each party the right to seek an increase or decrease of spousal support, the court could not terminate the spousal support award or change the duration of the support payments. In another Virginia case, the court refused to reduce a former husband’s spousal support obligation based upon a material change in his financial circumstances because the parties’ written stipulation was silent as to modification and provided only, in relevant part, that husband was to pay $1,000 per month in permanent spousal support.
Careful consideration should also be given to the duration of spousal support. If a marital agreement leaves the duration of spousal support open-ended then it terminates only by operation of law. The current statute provides for three terminating events: the death of either party; the remarriage of the spouse receiving support; or, in very limited circumstances, the payee spouse’s habitual cohabitation with another. Thus, an agreement to pay a stated monthly sum of spousal support without a fixed duration continues indefinitely until the earliest occurrence of one of those three terminating events provided by statute, and neither party may seek a modification based on a material change in circumstances unless their agreement expressly permits such a modification.
Provisions in marital agreements concerning a payee spouse’s remarriage or cohabitation can also be a trap for the unwary. The Code of Virginia was amended over a decade ago to allow a trial court to terminate spousal support where clear and convincing evidence shows that the payee spouse has been habitually cohabitating with another person in a relationship analogous to marriage for one year or more, unless the payee spouse can prove by a preponderance of the evidence that it would be unconscionable to terminate support. However, language contained in separation agreements can undo or alter the effect of this amendment, including the payor spouse’s burden of proof and the duration of cohabitation required for termination of spousal support. Similarly, spousal support terminates upon the remarriage of the recipient spouse unless the parties’ agreement expressly states otherwise. Thus, even when a separation agreement provides for the payment of spousal support for a fixed term, the support will terminate if the payee spouse remarries during that term unless the agreement expressly states otherwise. A payee spouse intending for spousal support to survive remarriage is cautioned to carefully choose the contract language. In one Virginia case, the court held that the husband’s obligation to pay spousal support terminated upon wife’s remarriage even where the parties’ marital agreement required the husband to pay spousal support for a period of seven years and further stated that the support “could not be terminated for any reason.”
Entering into a comprehensive marital agreement with your spouse can reduce the expense, stress and time consumption of contested divorce litigation. However, there is no such thing as one-size-fits-all marital agreements. Language regarding the modification, duration or termination of spousal support can create financial traps for the misinformed. Both recipients and payors of spousal support can protect their financial future by seeking independent legal counsel early in the negotiation process.
 The amendment is not retroactive to agreements entered into prior to its enactment.
Written by Alysha N. Allen.