Marital Settlement Agreements handle the monetary obligations of each spouse in an Illinois divorce.
“When an agreement by divorcing spouses concerning property rights is approved by the court and incorporated into the divorce decree, it becomes merged in the decree and the rights of the parties thereafter rest upon the decree.”In re Estate of Coleman, 395 NE 2d 1209 – Ill: Appellate Court, 2nd Dist. 1979
Each of these items is either expressed as a number or as an estimated value expressed in numbers.
What could be a clearer contractual term than something expressed in numbers?
Well, lawyers always claim to hate math and fail to review and/or screw up calculations. So, special care must be taken to ensure that numbers in a Marital Settlement Agreement are accurate and reflect the intentions of the parties.
How Marital Settlement Agreements Are Interpreted In Illinois
A Marital Settlement Agreement must be interpreted as a contract.
“A marital settlement agreement is construed in the manner of any other contract, and the court must ascertain the parties’ intent from the language of the agreement.” Blum v. Koster, 919 NE 2d 333 – Ill: Supreme Court 2009
Contracts are read to seek the original intent of the parties who entered into the contract.
“The normal rules pertaining to the construction of contracts are applicable to the interpretation of the provisions of a divorce decree. The settlement provisions within the divorce decree should be construed so as to give effect to the intention of the parties. The intent of the parties must be determined from the contract as a whole and not from any one clause standing alone. Further, in construing a contract, meaning and effect must be given to every part, and no part should be rejected as surplusage unless absolutely necessary since it is presumed that each provision was inserted deliberately and for a purpose. The parties’ intent must be determined solely from the language of the contract unless the language is ambiguous, in which case extrinsic evidence may be introduced to explain the language. A contract is ambiguous when the language used is reasonably susceptible to more than one meaning. Language is not rendered ambiguous simply because the parties do not agree upon its meaning.” White v. White, 378 NE 2d 1255 – Ill: Appellate Court, 1st Dist. 1978 (citations omitted)
It is difficult to imagine a number in a contract that is ambiguous. But, it definitely happens. The careful divorce lawyer will take steps to ensure that the numbers in the Marital Settlement Agreement are clear to the parties and any future court that must interpret the Marital Settlement Agreement.
Using Numbers And Words In An Illinois Settlement Agreement
Divorce attorneys love to be duplicative. A divorce attorney will often write the number in words and digits. For example: “Fred will pay Wilma Five Hundred Dollars ($500.00) a month in child support.”
These duplicative numbers provide the “immediacy of digits while providing insurance against a transposed or missing decimal point or one or more extra, missing or incorrect digits.” Adams, Kenneth. A Manual Of Style for Contract Drafting, 4th Edition. ABA Publishing. 2017
If there is a difference between the words and the digits, expect the words to prevail as they more accurately reflect the intentions of the parties.
While there is no direct Illinois authority to the rule of “words prevail over numbers”, there is persuasive Illinois statutory authority and plenty of out-of-state case law that reiterates the rule that words prevail over numbers.
“If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers.” 810 ILCS 5/3-114
“Words are preferred because writing words more likely effects the parties’ true intentions than writing numbers.” France v. Ford Motor Credit Co., 913 S.W.2d 770, 772 (Ark. 1996)
Values In An Illinois Marital Settlement Agreement
An asset’s value should be listed when dividing an asset in an Illinois Marital Settlement Agreement.
“Except where the parties are awarded percentage interests in a particular item, valuation of marital property is necessary to reach a just apportionment. In the absence of evidence of such valuation, there is no basis upon which the reviewing court can determine the propriety of the directed property distribution.” In re Marriage of Hellwig, 426 NE 2d 1087 – Ill: Appellate Court, 1st Dist. 1981
In practice, assets are rarely valued when the parties agree because a reviewing court will rarely if ever overturn an agreement.
“The law favors the amicable settlement of property rights in marital dissolution cases, and all presumptions are in favor of the validity of the agreement.” In re Marriage of Prill, 2021 IL App (1st) 200516 (citations omitted)
Percentages In An Illinois Marital Settlement Agreement
Illinois divorce courts “shall divide the marital property without regard to marital misconduct in just proportions” 750 ILCS 5/503(d)
Those proportions are often expressed in percentages to reflect a specific division of the assets.
It is preferable to set specific numbers of what each party is to receive.
For example, “Fred and Wilma have 30 shares of Bedrock Quarry Co. stock as marital assets. Fred is to retain 20 shares of Bedrock Quarry Co. stock and Wilma is to retain 10 shares of Bedrock Quarry Co. stock as of the entry of entry of this judgment. Fred will transfer the 10 shares of Bedrock Quarry Co. stock to Wilma as reasonably soon as possible” is preferable to “Fred is allocated 66% of the Bedrock Quarry Co. stock and Wilma is allocated 33% of the Bedrock Quarry Co. stock.”
Many pensions, mutual funds, and other mixed assets do not allow for the specific division into discrete units and a percentage description must be employed to adequately distribute the assets.
“In those instances where it is difficult to place a present value on the pension or profit-sharing interest due to uncertainties regarding vesting or maturation, or when the present value can be ascertained but the type, or lack, of other marital property makes it impractical or impossible to award sufficient offsetting marital property to the nonemployee spouse, then the trial court in its discretion may award each spouse an appropriate percentage of the pension to be paid “if, as and when” the pension becomes payable.” In re Marriage of Hunt, 397 NE 2d 511 – Ill: Appellate Court, 1st Dist. 1979
In reality, most assets that fluctuate to such an extent that a percentage split is appropriate are retirement accounts which hold stocks and bonds. Those retirement accounts have explicit plans that divide themselves to the penny in an Illinois divorce.
“Each [retirement] plan shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders.” 26 U.S. Code § 414(p)(2), ERISA § 206(d)(3)(G)(ii)
Filling out a Qualified Domestic Relations Order will accurately divide any retirement accounts down to the penny based on the plan’s strict guidelines without any math required from the drafter of the Martial Settlement Agreement.
Child support may not be a listed as a percentage of income in an Illinois Marital Settlement Agreement.
The Illinois Marriage and Dissolution of Marriage Act “does not allow child support orders to express payments as a percentage of income.” In re Marriage of Mitchell, 692 NE 2d 281 – Ill: Supreme Court 1998
Maintenance (formerly known as alimony) can be listed a mere percentage of net income. In re Marriage of Parello, 409 NE 2d 461 – Ill: Appellate Court, 1st Dist. 1980
Percentages of ongoing obligations require constant review via a “true up” and should be avoided as they are sure to trigger additional litigation.
Mark Twain said “figures won’t lie but liars will figure.” So, expect your ex-spouse or soon-to-be ex-spouse to use the numbers in your Marital Settlement Agreement against you.