Posted by Nydia Streets of Streets Law in Florida Divorce

The future may be unpredictable, which is why it is good that Florida divorce courts are guided by principles of equity. When parties enter a Florida divorce agreement, they agree, as much as possible, based on the circumstances they can foresee at that time. It is difficult, if not impossible, to plan for every possible future outcome, so Florida law allows room for this difficulty in considering how to interpret provisions of a marital settlement agreement. 

In the case Morrison v. Morrison, 2D17-3309 (Fla. 2d DCA 2018), the parties did not save for retirement during their marriage and instead relied on the husband's anticipated inheritance from his wealthy parents. In their divorce agreement, the husband agreed to pay the wife certain percentages of the inheritance he would receive from his parents as settlement of equitable distribution. The agreement further stated the husband would obtain a life insurance policy to secure the inheritance amount the wife was due to receive.

The language of the agreement indicated the parties believed the husband was going to receive his inheritance as a lump sum payment. Instead, the inheritance was paid in periodic distributions from a spendthrift trust created by the husband's father. The husband refused to pay any portion of these funds to the wife, arguing these payments were not inheritance based on the interpretation of the bankruptcy statutes. The trial court agreed with the husband, ruling the language in the parties' settlement agreement was clear and must be enforced as such.

The appellate court disagreed, holding there was a latent ambiguity in the contract: "Here, the parties' MSA refers to "inheritance funds received" by the Former Husband. There is no dispute that the parties were referring to funds the Former Husband anticipated that he would receive when his parents died, and there is also no dispute that the parties did not know when they executed the MSA exactly how the funds would ultimately pass to the Former Husband. The extrinsic fact here is the means by which the Former Husband received the funds. Rather than the father's estate being probated with a lump sum going to the Former Husband, the funds are being held in trust for the Former Husband. This extrinsic fact requires an analysis of the parties' intent as to the distribution of funds when they entered into the MSA, i.e., what would the parties have included in the MSA had they known that the Former Husband would not receive the funds from his parents outright but instead would receive them only in his capacity as the beneficiary of a spendthrift trust."

The appellate court further instructed: "Finally, for guidance to the trial court on remand, we note that when considering parol evidence concerning the parties' intent, a reasonable interpretation is preferred over one which is unreasonable, and an interpretation that leads to an absurd result or that nullifies other provisions of the contract should be avoided." This may hint the appellate court's leaning toward interpreting the contract to include the trust distributions as inheritance since to rule otherwise would effectively bar the wife from receiving the funds the husband agreed to pay in the divorce agreement. 

Ambiguities in Florida marital settlement agreements create headaches that may be preventable. While it may not be possible to anticipate every potential outcome, an experienced Florida divorce lawyer who studies appellate cases can help you draft language in an agreement that takes into account lessons learned from other cases. Contact a Miami divorce lawyer for a consultation today.