Property Settlement Agreements
In Pennsylvania, prior to being divorced, both assets and debts are divided between the parties. If the parties can resolve the division of these items by agreement, that resolution is reduced to writing in a document called a “Property Settlement Agreement” (“PSA”).
Please be aware that a PSA is a contract and is treated like any other contract in Pennsylvania. The import of this is that if parties sign a PSA but do not get divorced, the division of assets and liabilities that is reflected in the PSA is contractually enforceable, even if Husband and Wife continue to reside together after signing it and they do not get divorced.
The parties therefore need to be certain that they are, in fact, going to divorce one another after a PSA is executed. Otherwise, if one party will not agree to destroy the PSA, it is a legally enforceable and binding agreement. Therefore, for example, if the PSA says that Wife is to pay Husband the sum of $100,000.00 out of Wife’s individually held account or out of a joint account, and Husband wishes to enforce this obligation, the Court will do so.
I once had a Husband/Client consult with me. He told me that his Wife had met a man on the internet. She wanted to leave the Husband/Client and their children and start a new life with this new paramour, whom she had never met face-to-face. Since she was leaving the children with her Husband, she agreed to transfer her interest in all of the marital assets to Husband and start all over again.
The PSA was signed late in the week before she was to leave. She left her Husband and children and went to live with the paramour. Several weeks later, Husband called me and said his Wife had returned to the marital residence with him. It seems that the new paramour had misrepresented himself on the internet and Wife wanted to move back with Husband and resume their marriage.
He called me to inquire whether the PSA was “valid” if they resided together. I advised him that it certainly was. He now had all the assets and she was out of luck. Truth can be stranger than fiction.
Remember, a properly drafted PSA is a valid contract and can be enforced regardless of whether you proceed to finalize a divorce.