When you go through a Colorado divorce, your property settlement agreement becomes a major part of your ultimate divorce decree. If you later seek a modification of this decree, the acceptance of benefits doctrine may come into play. This legal doctrine states that you cannot challenge a court order once you accept its benefits.
This situation arose in the recent Texas Supreme Court case of Kramer v. Kastleman. Here the married couple, Ms. Kramer and Mr. Kastleman, divided their nearly $30 million worth of marital property via a PSA. The trial court approved the PSA and incorporated it into the resulting divorce decree, which was only verbal. The court did not enter its written divorce decree until 12 months later.
During this 12-month period, Kramer attempted to rescind the PSA, claiming that Kastleman fraudulently obtained her signature thereon. Kastleman counterclaimed, denying the fraud and also alleging that Kramer had already received over $20,000 from the monthly income generated by a piece of property the PSA awarded to her.
Both the trial court and the appellate court sided with Kastleman, citing the acceptance of benefits doctrine to deny Kramer’s appeal. She appealed to the Texas Supreme Court.
The Texas Supreme Court overruled both of the lower courts and rescinded the PSA, holding that while the acceptance of benefits doctrine remains valid, it failed to apply in this particular case for two reasons. First, at the time Kramer sought to rescind the PSA, the trial court had not issued its final divorce decree. Second, Kastleman failed to produce any clear and convincing evidence that Kramer had expressed a clear intent to accept the $20,000 as one of the PSA’s benefits.
Despite this holding, you should always make sure you fully understand the consequences of whatever property settlement agreement you sign as part of your divorce. Once you accept any of its benefits, you likely will have a difficult time later modifying it.