When to prepare the CMSA?

When to prepare the CMSA?

Written by My Collaborative Team Marketing President, Edward S. Sachs

I have several Collaborative matters that are “stuck in the mud” of preparing the Collaborative Marital Settlement Agreement.  In two of those cases we reached settlement weeks ago and the attorneys are still in the process of preparing the CMSA.  During that time, issues have arisen.

In one case, the wife agreed to buy the husband out of their marital residence (currently being rented).  However now, during the weeks of preparation of the CMSA, the house’s air conditioning has died.  Who should pay for the repairs?  Until we can settle this issue, we can’t sign the agreement.

In another case, the parties are retired and worth over $22 million.  We reached a settlement in which the wife would receive $11.5 million.  By the time the CMSA was completed several weeks later, the stock market had taken a dive and now the marital estate was only worth about $20 million.  The wife was no longer receiving $11.5 million and this caused a huge problem.

How do we streamline so that the preparing of the CMSA is not the cause for a breakdown in the process?

First thing is to discuss in your initial team pre-brief as you start the case who is going to start drafting the CMSA.  

Consider starting the draft of the agreement immediately after the first team meeting.  So much is boiler plate.  Then, as the various components of settlement are discussed add them to the agreement.  It should be a working document throughout the process.

Finally, consider scheduling your final team meeting within a week of settlement for the purpose of reviewing and finalizing the CMSA.  

Keep in mind throughout the Collaborative Process that idle time leaves the door open to trouble.  Keep the Process moving to avoid down time.

As always, your thoughts are welcome!

3 Responses

  1. As a rule, I try and provide the template of an agreement to the other attorney to review to get the boiler plate language out of the way before we begin putting the actual terms into the agreement. I do this with the Parenting Plan, as well.
    If this had been done, there would be little to no excuse for the attorneys not having the CMSA completed for signing on a timely basis.
    Yes, it requires work up front, but as the eternal optimist, I figure it will need to get done as some point, why now from the start.

  2. It is usually not advisable to make the distribution a flat dollar amount. Language should allow for the “dollar amount” to be adjusted for gains/losses in the market up to the date of division so that neither person “benefits” when the market goes up and neither person is “hurt” when the market goes down.

    The A/C is different issue. When it was determined that the wife was buying out the husband, there could have been an agreement in principal documented in the file, that until the completion of the CMSA, that costs for repairs/maintenance were to be split between husband and wife, or, if wife paid, she it would reduce the “buy-out” amount by half of the expense she paid. On the flip side, they could have agreed in principal, that because wife was going to assume ownership, all repairs/maintenance were to be at her expense. There is no right or wrong, but it probably should have been discussed so that there was a contingency plan in place.

  3. I am guilty of this happening. Any Family Law attorney, particularly one that also practices litigation has numerous demands on their time and judges and court always out of necessity come first. The issues you have raised are common occurrences and should be part of the negotiation. Setting a valuation date for assets and debts and then setting the parameters such as assets from date of valuation to date of distribution should be adjusted for plusses or minuses or in the alternative, make it clear that the values are frozen regardless of changes. For debts, I prefer setting a limit and if either party increases the debt- it is not shared. When “dividing” a house the party responsible for the repairs and maintenance should always be established, possible based on sale date, or when a party moves out, etc.