couple signing documentsThis is the next post in a series of articles discussing spousal support or alimony awards in Little Rock, Arkansas. Our previous article discussed the impact of “underemployment” in a spousal support determination. When one party intentionally reduces their income through underemployment for purposes of avoiding or reducing an alimony award, the court may use the person’s potential earnings as a basis for the support award. Proving that the spouse is underemployed may be challenging. An experienced attorney can assist you with gathering evidence and presenting the information to the Court. This article will discuss settlement agreements and how the terms and conditions included in such documents may impact spousal support rights and obligations. If you need assistance, contact our office today to speak to a lawyer.

Divorces are commonly resolved by the parties through a settlement agreement. A settlement agreement is a binding contract between the spouses that will address all outstanding issues in their divorce, such as the division of marital property, child custody and support, and ongoing spousal support obligations. When the parties cannot agree on these terms, the Court will make the ultimate decision for them through the litigation process. To avoid this result, parties are encouraged by the Court throughout the process to attempt to resolve their issues via a settlement agreement. It is important to understand that the agreements and concessions made within the settlement agreement are legally binding and often permanent. Both spouses should have settlement proposals reviewed by their attorney and fully understand all aspects of such agreements prior to signing them. Failing to do so, particularly in the context of spousal support, may have significant financial consequences.

For instance, absent an agreement to the contrary, Arkansas law typically allows parties to seek a modification of alimony awards if either party experiences a material change in circumstances, such as unexpected job loss, illness or injury, remarriage, cohabitation, etc. If the spouses sign a settlement agreement that states that the spousal support agreement between the parties is non-modifiable, a Court will generally enforce that term, meaning that no changes can be made regardless of the future circumstances. A settlement agreement may contain other alimony conditions, such as an automatic stoppage of payments upon the recipient cohabitating with another person or upon the obligor’s retirement. Failing to understand these types of provisions and their potential future consequences could have a disastrous financial impact.

Consider, for example, a couple has been married for 30 years and have decided to divorce. The husband is on the verge of retirement from a successful career and expects a healthy pension payment on top of his significant savings. The wife has not been employed since before their children were born. To expedite the divorce, he agrees to pay her permanent spousal support and they also agree that the alimony arrangement is not modifiable. The economy goes into recession, his savings shrink and he is stretching his pension to support himself. Ordinarily, a court may have determined that the material change in circumstances would have justified a modification of the support award. His spousal support obligations, however, are permanent and he cannot seek a modification without his ex-wife’s agreement

For these reasons, it is imperative to retain a divorce attorney to prepare, negotiate and review a settlement agreement on your behalf. If you need assistance, contact our office today to speak to a Little Rock lawyer. We also handle matters in Fayetteville, Fort Smith, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Pine Bluff, and throughout the rest of Arkansas.