In a recent case, the Virginia Court of Appeals decided on whether an ex-wife’s new relationship constituted a “marriage,” as defined by the couple’s separation agreement. There, the court determined that the long-term, monogamous relationship, in which the couple jointly owned a home and shared a joint bank account, was not a marriage under the agreement and, thus, didn’t end her entitlement to her ex-husband’s retirement assets. This case should serve as a cautionary tale to others considering separation agreements to ensure they seek experienced counsel to draft comprehensive settlement agreements that cover all possible scenarios.
Hansen v. Hansen
In Hansen v. Hansen, Gary Hansen and Ellen Hansen married in 1987 and divorced twenty-six years later. They entered into a marital and separation agreement, which was incorporated into their final divorce decree. Under the contract, Ellen received a portion of Gary’s military retirement, but if Ellen remarried, she was to inform Gary and would no longer receive any of his retirement. Specifically, the agreement provides that “‘marriage’ is considered to be any formal union that contractually binds [the wife] in a similar legally binding relationship (‘wedding,’ ‘civil union,’ ‘[h]and-fasting,’ etc).”
In 2019, Gary filed a breach of contract action alleging that Ellen had remarried within the meaning of the agreement and failed to inform him and should no longer receive a share of his retirement. Ellen testified that she and her boyfriend were in a long-term monogamous relationship and that they shared a bedroom in a home they owned together, maintained a joint bank account, divided household chores, and vacationed together. Ellen also indicated that she and her boyfriend were in a “dominant/submissive relationship” and that she gave her boyfriend two neck collars to represent that relationship.
The court, here, indicated that “agreements between spouses regarding support or property settlement are governed by the rules of construction generally applicable to contracts.” When interpreting a contract, if “the terms of the agreement are unambiguous, [a] court must ‘adhere to the plain meaning of [the agreement’s] stated terms’ . . . and may not ‘“read into [the document] language which will add to or take away from the meaning of the words already contained”’ in the agreement.”
Here, the parties’ agreement provides that “‘marriage’ is considered to be any formal union that contractually binds [the wife] in a similar legally binding relationship.” The court found that the phrase “that contractually binds” is a modifier of “any formal union” and “in a similarly legally binding relationship” modifies the phrase “that contractually binds.” Based on the language in the agreement, the court concluded that the contract “unambiguously defines marriage as a formal union that creates a contractual obligation, and that contractual obligation must be ‘a similarly legally binding relationship’ to marriage.” The court determined that, under the plain language of the parties’ agreement, for Ellen to no longer be entitled to her share of Gary’s retirement, she must enter into a formal union that creates a contractual obligation for her, and that contractual obligation must be “a similarly legally binding relationship” to marriage.
Gary argued that Ellen and her boyfriend were in a formal relationship as “symbolized by the worn collar.” He also argues that her “union” contractually bound her because she and her boyfriend “negotiated the terms of the relationship.” Lastly, Gary argued that their relationship was legally binding because they intermingled their finances and jointly owned property. However, the court was not persuaded by any of these arguments, instead finding that the arrangement between Ellen and her boyfriend about their dominant and submissive roles in the relationship is “not contractually binding, much less contractually binding in a legally binding relationship similar to marriage.” Thus, the court concluded that Ellen had not entered into a marriage as defined under their agreement.
Lessons Learned from Hansen v. Hansen
The key takeaway from this case is to ensure you have a carefully drafted separation agreement after a divorce, which adequately considers the distribution of assets under different scenarios. Generally, in the case of divorce, the court will determine how a couple’s assets will be divided, unless the couple enters into an enforceable agreement dictating the distribution of assets. Couples can enter into prenuptial (before marriage) or postnuptial (after marriage) agreements that set out the terms for property division, in the case of divorce. Alternatively, upon a divorce, spouses can enter into a property settlement agreement (also known as a separation agreement) setting out the terms of their separation, including the rights, interests, and obligations of the spouses after the divorce. If an enforceable agreement is in place, instead of having the court determine the distribution of assets and debts, the couple’s property will be distributed according to the agreement.
Couples are able to add clauses in these agreements that dictate what happens in different scenarios, to the extent they are enforceable. For example, many agreements between couples with children establish restrictions regarding minor children. Additionally, similar to the agreement here, agreements can indicate that payments or distributions of assets will end upon the occurrence of certain events, such as a period of time or remarriage. However, for these agreements to be most effective, they should be clear and comprehensive enough to plan for a range of possible scenarios. Here, the parties’ agreement only stopped payment of retirement funds in the event of a “marriage,” as defined by the agreement. If the real goal for the husband here was for payments to end when the wife entered into a long-term relationship, even if that didn’t result in marriage, the agreement could have been drafted to be more encompassing of different relationships and scenarios. Individuals considering marital or separation agreements should view this case as a cautionary tale and ensure they seek experienced counsel that will help plan for different contingencies and draft comprehensive agreements.
For more guidance on marital settlement agreements and related divorce matters, contact General Counsel, P.C. or send an email to email@example.com.
Led by Joanna Foard, General Counsel, P.C.’s family / divorce practice can help you. Divorce and related matters can be complex and because of their importance, it is beneficial to consult with an attorney experienced in family law matters. Our family law attorneys are well versed in divorce matters, as well as drafting and litigating property settlement agreements and can help you navigate the process and protect your rights. Email us at firstname.lastname@example.org or call us at 703-991-7973 and see how we can help you.