In the vast majority of divorce cases, a settlement is reached prior to a final hearing.
In doing so, an integral and necessary part of reaching a settlement is agreeing on the value of assets and liabilities of the marital estate. There are numerous ways to value marital assets, but ultimately the parties must agree on the value if they wish to reach an out-of-court settlement. Most assets (such as bank accounts) are valued at the date of filing of the Petition for Dissolution.
So, what happens if the value of the asset you agreed to take in settlement loses significant value at a later date? You are stuck with it. There are risks associated with taking certain assets such as real estate or stocks due to the fact that the values are subject to change. The value may decrease and there may be additional expenses associated with the maintenance and upkeep of the real estate. Such was the case in a recent divorce for a couple of high net worth. The link provided below discusses a New York divorce wherein the husband’s share of the settlement was largely comprised of Bernie Madoff investments. We all know how that turned out. Well, after being defrauded, the now ex-husband went back to his ex-wife seeking to modify the settlement agreement. Understandably, she was not open to that proposal.
The New York courts determined that the ex-husband could not re-open the marital estate. While New York law is not controlling in Indiana, the lesson set forth in the article is instructive.
New York and Indiana courts (and presumably every other state) prefer finality to a divorce matter. If divorced individuals were permitted to return to court years later seeking to change the terms of a property settlement, our already stressed judicial system could be overrun. Thus, absent a showing of some manifest unfairness or fraud, property divisions are not modifiable. Therefore, parties should have counsel that advise of any risks that may be associated with a settlement agreement as once the agreement is finalized, it are division may not be modified at a later date.
It should be noted that this finality does not apply to child-related matters. Issues related to custody and support are always subject to review upon the request of a party.
At Hollingsworth & Zivitz, P.C., our team has the experience, the understanding, and the compassion to assist with your family law needs. If you have questions or concerns regarding divorce, custody, support, or any other family law concerns contact our firm at 317.569.2200 or hzlegal.com.