Law Office of Lily L. Huang
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What is the acceptance of benefits doctrine?

If you face an impending California divorce, you may wish to familiarize yourself with the acceptance of benefits doctrine. Why? Because it could impact if and to what extent you may be able to modify your court-approved property settlement agreement after your divorce.

The acceptance of benefits doctrine precludes you from challenging, i.e., attempting to modify, a court judgment in circumstances where you already benefitted from the judgment. The Texas Supreme Court addressed this doctrine in the 2017 case of Kramer v. Kastleman

Case background

After nine years of marriage, Ms. Kramer and Mr. Kastleman sought a divorce, having accumulated more than $30 million worth of marital assets during their time together. The trial court approved their property settlement agreement and granted an oral divorce, failing to issue a written divorce decree until a year later.

During this year, Ms. Kramer sought to rescind her acquiescence to the couple’s property settlement agreement, alleging that Mr. Kastleman coerced her agreement, thereby committing fraud. She therefore asked the court to set the agreement aside. Conversely, Mr. Kastleman asked the court to overrule Ms. Kramer’s petition on the grounds that she had already received considerable benefits from it, including monthly rental of $20,000 from one of the properties the agreement awarded to her.

The trial court sided with Mr. Kastleman, overruled Ms. Kramer’s petition and issued its written divorce decree. Ms. Kramer appealed, but the appellate court dismissed her appeal on the grounds that the acceptance of benefits doctrine precluded her right to modify the original property settlement agreement. She appealed to the Texas Supreme Court.

Supreme Court decision

The Texas Supreme Court sided with Ms. Kramer and reversed the appellate court’s dismissal, sending the case back to the trial court for purposes of revising its written divorce decree so as to grant Ms. Kramer the relief she sought. While conceding the validity of the acceptance of benefits doctrine, the Court ruled that its application is fact-specific to each case. It also ruled that in this case, the doctrine did not apply because of the 12-month period between the trial court’s oral and written decrees and the fact that Ms. Kramer had evidenced no clear intent to reap any benefits from the original property settlement.

Admittedly, this is a Texas case and you live in California. Nevertheless, you should make sure that you fully understand your own property settlement agreement prior to signing it. You could find it quite difficult to later modify it, especially after you have reaped some of its benefits, unless you can show special circumstances why a court should grant your petition for modification.

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

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