Monday, August 22, 2011

The Perils of Indemnification Clauses in Divorce Decrees

The Court of Appeals on 8-8-11 filed Toop v. Toop affirming the trial court's decision and interpretation of an indemnification clause in the judgment and decree where the former wife had abandoned the home after failing to pay the homestead mortgage payments and filed bankruptcy.  The trial court had failed to award money damages to former husband for indemnification when he had not incurred any liability relative to the homestead.  The former husband also escrowed his spousal maintenance payments instead of making them to former wife.  Factually this scenario is likely being repeated in courts throughout this state as unemployment continues to be high and foreclosures continue.  The moral is that the homestead provision in a decree must be as detailed and ironclad as possible and anticipate every possible financial circumstance.
See the Winter 2010-11 issue of Family Law Forum published by the MSBA for an excellent article by Lymari Santana and Jeffrey O'Brien.

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