Sears, Presiding Justice.
A discretionary appeal was granted in order to consider whether the trial court erred in its construction of a provision of a divorce settlement agreement obligating the ex-husband to transfer certain “publicly traded stock” to the ex-wife. The trial court construed this provision as referring only to stocks held in the parties’ non-retirement accounts, and not to refer to stocks held in the parties’ retirement accounts. Having reviewed the record as a whole, as we must, we conclude that the phrase “publicly traded stock,” as used in [360]*360this particular settlement agreement, does apply only to stocks held in non-retirement accounts. Therefore, we affirm.
The divorce action between Stanley and Kathryn Kreimer was scheduled for trial in May 2000. At the calendar call, the trial court requested that the parties attempt to reach a settlement through mediation one final time. As a result, the parties agreed upon a four-page handwritten Memorandum of Settlement (“the Memorandum”). The Memorandum’s first paragraph describes the available equity in the marital home, and states that Kathryn would receive the home. The Memorandum’s second paragraph states that: “All other assets [will be] divided 50/50,” and the paragraph is then broken down into subparagraphs which identify the assets to be divided equally. Sub-paragraph one specifies a second home; subparagraph two specifies retirement accounts identified as belonging to Stanley; and subpara-graph three specifies Kathryn’s retirement accounts. Subparagraph four of paragraph two specifies certain “public accounts,” including “Fidelity, Dean Witter . . . [and] FUNB.” At its conclusion, paragraph two states that: “Wife keeps her retirement — Hfusband] transfers publicly traded stock to W[ife] — parties will neutralize tax impact (unrealized capital gains) based on division of publicly traded stock (taking into [account] basis).”
The last page of the Memorandum provides an illustration of how the division and distribution of assets described in paragraph two was intended to take place. That example sets forth how certain assets were to be divided. The difference in the value of those divided assets was to be equalized by Stanley’s transfer to Kathryn of certain publicly traded stock, “after equalizing [the] basis and unrealized gains of the publicly traded stock. Division to be by mutual agreement. W[ife] to pay capital gains on shares of stocks when she sells them.” This illustration, and the language in paragraph two requiring the parties to “neutralize” the tax impact of stocks transferred, indicates that it was the parties’ intention that, regardless of which particular shares of stock were actually transferred by Stanley to Kathryn, after such transfer the parties’ holdings would have equal values.
Kathryn’s lawyer put the handwritten Memorandum into a formalized form which stated that Stanley was to transfer only stocks held in the “public accounts” identified in paragraph two of the Memorandum — i.e., the non-retirement accounts — to Kathryn. Stanley disputed that provision, and claimed that the terms providing that he would transfer “publicly traded stock” to Kathryn referred to stocks held in both the non-retirement and the retirement accounts. Both parties filed motions to enforce the settlement agreement, and a hearing was held at which the only evidence presented was the settlement agreement itself. The trial court held that the parties [361]*361intended the term “publicly traded stock,” as used in the Memorandum of Settlement, to refer only to those stocks held in the “public accounts” listed in paragraph two, subparagraph four, of the Memorandum. Accordingly, the trial court ordered Stanley to transfer stocks to Kathryn from the non-retirement accounts, and not from the retirement accounts. Thereafter, Stanley’s application seeking a discretionary appeal from that ruling was granted.
1. Settlement agreements in divorce cases must be construed in the same manner and under the same rules as all other contractual agreements.1 It is axiomatic that contracts must be construed in their entirety and in a manner that permits all of the terms contained therein to be consistent with one another.2 Of course, the terms and phrases contained in a contract must be given their ordinary meaning.3 The construction of a particular phrase that will uphold a contract in its entirety is preferred, and the entire contract must be looked at in the construction of any of its parts.4 A construction of a contract that renders any portion of it meaningless ought to be avoided whenever possible.5
Applying these hornbook principles of contract law to the Memorandum of Settlement at issue in this appeal, we conclude that the trial court correctly held that the parties intended the term “publicly traded stocks” to refer only to those stocks held in the non-retirement accounts listed in paragraph two, subparagraph four, of the Memorandum. As explained above, as part of the parties’ agreement to divide most of their assets equally, the Memorandum unambiguously requires Stanley to transfer certain “publicly traded stock” to Kathryn. In order to ensure that the post-transfer value of each parties’ assets is equal, the Memorandum requires the parties to “equaliz[e the] basis and unrealized gains of the publicly traded stock.” Stated differently, the Memorandum mandates that the “parties will neutralize tax impact (unrealized capital gains) based on [a] division of publicly traded stock (taking into [account] basis).” The agreement also requires that Kathryn shall “pay capital gains on [her] shares of stocks when she sells them.”
This language concerning the capital gains tax consequences of the stock transfer would have no place in the Memorandum of Settlement if the term “publicly traded stocks” referred to stocks held in retirement accounts, because “capital gains,” “basis,” and “unrealized gains” are terms that are inapplicable to stocks held in such [362]*362accounts. Rather than being taxed at the rates applicable to capital gains, withdrawals from retirement accounts such as those identified in the Memorandum of Settlement are taxed at the rates applicable to ordinary income.6 Consequently, the basis of any stock held in a retirement account does not affect the tax to be paid on the withdrawal of funds from that account.7 The language of the Memorandum clearly shows that the parties intended to take into account the capital gains tax consequences of the stock transfer when ensuring that the post-transfer values of the parties’ respective assets were equal. Insofar as the only stocks susceptible to capital gains tax treatment are those held in the non-retirement accounts identified in the Memorandum, we conclude that the parties must have intended that stocks be transferred to Kathryn from those non-retirement accounts.
Furthermore, there are substantial monetary penalties for the withdrawal of funds from a retirement account if such withdrawal occurs before the age of fifty nine and one-half years.8 The Memorandum makes no provision for the impact these penalties would have upon the required division of the parties’ assets in separate amounts of equal value.
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Sears, Presiding Justice.
A discretionary appeal was granted in order to consider whether the trial court erred in its construction of a provision of a divorce settlement agreement obligating the ex-husband to transfer certain “publicly traded stock” to the ex-wife. The trial court construed this provision as referring only to stocks held in the parties’ non-retirement accounts, and not to refer to stocks held in the parties’ retirement accounts. Having reviewed the record as a whole, as we must, we conclude that the phrase “publicly traded stock,” as used in [360]*360this particular settlement agreement, does apply only to stocks held in non-retirement accounts. Therefore, we affirm.
The divorce action between Stanley and Kathryn Kreimer was scheduled for trial in May 2000. At the calendar call, the trial court requested that the parties attempt to reach a settlement through mediation one final time. As a result, the parties agreed upon a four-page handwritten Memorandum of Settlement (“the Memorandum”). The Memorandum’s first paragraph describes the available equity in the marital home, and states that Kathryn would receive the home. The Memorandum’s second paragraph states that: “All other assets [will be] divided 50/50,” and the paragraph is then broken down into subparagraphs which identify the assets to be divided equally. Sub-paragraph one specifies a second home; subparagraph two specifies retirement accounts identified as belonging to Stanley; and subpara-graph three specifies Kathryn’s retirement accounts. Subparagraph four of paragraph two specifies certain “public accounts,” including “Fidelity, Dean Witter . . . [and] FUNB.” At its conclusion, paragraph two states that: “Wife keeps her retirement — Hfusband] transfers publicly traded stock to W[ife] — parties will neutralize tax impact (unrealized capital gains) based on division of publicly traded stock (taking into [account] basis).”
The last page of the Memorandum provides an illustration of how the division and distribution of assets described in paragraph two was intended to take place. That example sets forth how certain assets were to be divided. The difference in the value of those divided assets was to be equalized by Stanley’s transfer to Kathryn of certain publicly traded stock, “after equalizing [the] basis and unrealized gains of the publicly traded stock. Division to be by mutual agreement. W[ife] to pay capital gains on shares of stocks when she sells them.” This illustration, and the language in paragraph two requiring the parties to “neutralize” the tax impact of stocks transferred, indicates that it was the parties’ intention that, regardless of which particular shares of stock were actually transferred by Stanley to Kathryn, after such transfer the parties’ holdings would have equal values.
Kathryn’s lawyer put the handwritten Memorandum into a formalized form which stated that Stanley was to transfer only stocks held in the “public accounts” identified in paragraph two of the Memorandum — i.e., the non-retirement accounts — to Kathryn. Stanley disputed that provision, and claimed that the terms providing that he would transfer “publicly traded stock” to Kathryn referred to stocks held in both the non-retirement and the retirement accounts. Both parties filed motions to enforce the settlement agreement, and a hearing was held at which the only evidence presented was the settlement agreement itself. The trial court held that the parties [361]*361intended the term “publicly traded stock,” as used in the Memorandum of Settlement, to refer only to those stocks held in the “public accounts” listed in paragraph two, subparagraph four, of the Memorandum. Accordingly, the trial court ordered Stanley to transfer stocks to Kathryn from the non-retirement accounts, and not from the retirement accounts. Thereafter, Stanley’s application seeking a discretionary appeal from that ruling was granted.
1. Settlement agreements in divorce cases must be construed in the same manner and under the same rules as all other contractual agreements.1 It is axiomatic that contracts must be construed in their entirety and in a manner that permits all of the terms contained therein to be consistent with one another.2 Of course, the terms and phrases contained in a contract must be given their ordinary meaning.3 The construction of a particular phrase that will uphold a contract in its entirety is preferred, and the entire contract must be looked at in the construction of any of its parts.4 A construction of a contract that renders any portion of it meaningless ought to be avoided whenever possible.5
Applying these hornbook principles of contract law to the Memorandum of Settlement at issue in this appeal, we conclude that the trial court correctly held that the parties intended the term “publicly traded stocks” to refer only to those stocks held in the non-retirement accounts listed in paragraph two, subparagraph four, of the Memorandum. As explained above, as part of the parties’ agreement to divide most of their assets equally, the Memorandum unambiguously requires Stanley to transfer certain “publicly traded stock” to Kathryn. In order to ensure that the post-transfer value of each parties’ assets is equal, the Memorandum requires the parties to “equaliz[e the] basis and unrealized gains of the publicly traded stock.” Stated differently, the Memorandum mandates that the “parties will neutralize tax impact (unrealized capital gains) based on [a] division of publicly traded stock (taking into [account] basis).” The agreement also requires that Kathryn shall “pay capital gains on [her] shares of stocks when she sells them.”
This language concerning the capital gains tax consequences of the stock transfer would have no place in the Memorandum of Settlement if the term “publicly traded stocks” referred to stocks held in retirement accounts, because “capital gains,” “basis,” and “unrealized gains” are terms that are inapplicable to stocks held in such [362]*362accounts. Rather than being taxed at the rates applicable to capital gains, withdrawals from retirement accounts such as those identified in the Memorandum of Settlement are taxed at the rates applicable to ordinary income.6 Consequently, the basis of any stock held in a retirement account does not affect the tax to be paid on the withdrawal of funds from that account.7 The language of the Memorandum clearly shows that the parties intended to take into account the capital gains tax consequences of the stock transfer when ensuring that the post-transfer values of the parties’ respective assets were equal. Insofar as the only stocks susceptible to capital gains tax treatment are those held in the non-retirement accounts identified in the Memorandum, we conclude that the parties must have intended that stocks be transferred to Kathryn from those non-retirement accounts.
Furthermore, there are substantial monetary penalties for the withdrawal of funds from a retirement account if such withdrawal occurs before the age of fifty nine and one-half years.8 The Memorandum makes no provision for the impact these penalties would have upon the required division of the parties’ assets in separate amounts of equal value. Had the parties intended that assets held in the retirement accounts be included in the “publicly traded stocks” to be transferred to Kathryn, we believe the Memorandum would have necessarily made provisions for the impact of early withdrawal penalties, just as it clearly made provisions for the payment of capital gains taxes upon the sale of stocks held in non-retirement accounts. Therefore, we conclude that the parties did not intend that stocks be transferred from the non-retirement accounts identified in the Memorandum.
Accordingly, in accordance with the principles of contract construction discussed above, we conclude that the trial court correctly ruled that the term “publicly traded stock,” as used in the Memorandum of Settlement, refers only to those stocks held in the “public accounts” listed in the Memorandum, and does not refer to those stocks held in the Memorandum’s non-retirement accounts.9
[363]*3632. Contrary to Stanley’s assertion, the Memorandum of Settlement is not an unenforceable “agreement to agree.”10 As explained in Division 1, the Memorandum includes an example which shows how the parties intended that their division of assets would occur. The illustration states that Stanley would transfer publicly traded stock to Kathryn, “after equalizing [the] basis and unrealized gains of the publicly traded stock. Division to be by mutual agreement. W[ife] to pay capital gains on shares of stocks when she sells them.”
The italicized language quoted above, providing that the parties are to agree to which stocks will be transferred and which will be retained, does not have the effect of transforming the Memorandum into an unenforceable “agreement to agree.” It is well established that “no contract exists until all essential terms have been agreed to, and the failure to agree to even one essential term means that there is no agreement to be enforced.” 11 If a contract fails to establish an essential term, and leaves the settling of that term to be agreed upon later by the parties to the contract, the contract is deemed an unenforceable “agreement to agree.”12
In this matter, Stanley claims that because the Settlement Memorandum provided that the parties were to agree to which shares of stock should be transferred to Kathryn and which should be retained by Stanley, the Memorandum was unenforceable. We disagree. As explained in Division 1 above, the actual makeup of the shares of stock to be transferred is immaterial to the purposes of the Memorandum. Rather, it is the after-tax valuation of the stock that is essential. Stated differently, after the stock is transferred, it does not matter whether Stanley holds the parties’ stock in Companies A, B and C, or whether Kathryn holds those shares of stock, so long as the after-tax value of both parties’ holdings are equal. Hence, the decision which particular shares of stock will actually be transferred is a non-essential element of the settlement agreement, and the fact that the agreement does not identify those shares does not render the agreement void for failing to set forth a material term. It follows that the agreement is not an unenforceable “agreement to agree.”
Judgment affirmed.
All the Justices concur, except Carley, J, who concurs in part and dissents in part.