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What is the acceptance of benefits doctrine?

On Behalf of | Sep 16, 2018 | Property Division |

As you begin your Ohio divorce process, you likely are caught up in all the things a divorce entails, particularly your custody and parenting time agreement and your property settlement agreement. With regard to the latter, make sure you understand exactly what you are signing. It may be difficult to modify it in the future.

Per the acceptance of benefits doctrine, you cannot later challenge a court judgment once you receive benefit from it. The Texas Supreme Court recently addressed this legal doctrine in the case of Kramer v. Kastleman.

Case facts

Ms. Kramer and Mr. Kastleman sought a divorce after nine years of marriage during which they accumulated over $30 million in marital assets. After approving their property settlement agreement, the court verbally granted their divorce. It failed to issue a written decree, however, for another 12 months.

During this interim period, Ms. Kramer attempted to rescind the property settlement agreement, alleging that Mr. Kastleman had fraudulently induced her to sign it. Mr. Kastleman denied the allegations and asserted that Ms. Kramer had already received substantial benefits from the disputed agreement, including $20,000 income per month from one of the properties the agreement awarded to her.

The trial court agreed with Mr. Kastleman, overruled Ms. Kramer’s motion and finally issued its written divorce decree. When Ms. Kramer appealed, the appellate court dismissed her appeal, citing the acceptance of benefits doctrine as the reason why the trial court’s decision should stand. Ms. Kramer consequently appealed to the Texas Supreme Court.

Supreme Court holding

Ultimately the Texas Supreme Court agreed with Ms. Kramer’s position, reversed the appellate court’s dismissal, and remanded the case to the trial court with instructions to revise its written divorce decree so as to grant Ms. Kramer’s motion. The Supreme Court did not question the validity of the acceptance of benefits doctrine. Instead it held it inapplicable given the facts of this particular case, specifically the 12-month period between the trial court’s oral and written divorce decree. The Court additionally held that Ms. Kramer had shown no clear intent to benefit from the property settlement agreement.

Despite the fact that this is a Texas case and you are an Ohio resident, your best strategy when negotiating and signing your property settlement agreement is to keep the acceptance of benefits doctrine firmly in mind. If you later wish to challenge the agreement after receiving benefits from it, you will need to show special circumstances as to why the doctrine is inapplicable to you.

This is educational information only and not intended to provide legal advice.


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