Marital and divorce agreements have to be “notarized.” But does the notary have to be present and witness the actual signing?

New York’s Domestic Relations Law §236B(3) states “[a]n agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded.”

What does “acknowledged or proven in the manner required to entitle a deed to be recorded” mean.

In her June 1, 2016 decision in B.W. v. R.F., Westchester County Supreme Court Justice Linda Christopher upheld a prenuptial agreement in which the notary’s “acknowledgment” used the wrong wording.

Continue Reading Do Marital and Divorce Agreements Have To Be Signed in the Presence of the Notary?

Once again, it has been made clear that where either or both spouses have assets or liabilities at the date of marriage, it is foolhardy (or at least imprudent) to enter the marriage without a prenuptial agreement and/or the assembly of proof of the extent, nature and value of those assets or liabilities.

Take the January 8, 2015 decision of the Appellate Division, Third Depatrtment, in Ceravolo v. DeSantis. In that case, the parties were married in July, 1996. The wife commenced the action for divorce in June, 2010. Acting Albany Supreme Court Justice Kimberly O’Connor determined, among other things, that the marital residence, which had been purchased by the husband prior to the marriage, was marital property and awarded the wife, among other things, half of its value. The husband appealed.

The Third Department agreed with the husband that Justice O’Connor erred in classifying the marital residence as marital property. Marital property is defined as “all property acquired by either or both spouses during the marriage” (Domestic Relations Law §236[B][1][c]), while “property acquired before marriage” is separate property (D.R.L. §236[B][1][d][1]).

Title is a critical consideration in identifying the nature of real property acquired before the marriage. The circumstances surrounding the purchase of the residence and the parties’ intent relative thereto are irrelevant to the legal classification of the residence as separate or marital property.

Here, the husband purchased the marital residence in January 1994 — 2½ years prior to the parties’ marriage — paying $130,000 of his own funds and borrowing an additional $100,000 from his father, secured by a note and mortgage. Although the wife contributed $30,000 of her separate funds to the initial purchase of the residence, the husband took title to the property in his name alone.

Continue Reading Title Controls Premarital Contributions To The Acquisition and Expenses of Property

The November 12, 2014 decision of the Appellate Division, Second Department, in Bibeau v. Sudick reversed the granting of summary judgment upholding the validity a 2000 prenuptial agreement, remanding the matter for a hearing on that issue.

In September 28, 2000, two days before their wedding, the 70-year old future husband and the 38-year old future wife executed a premarital agreement. It provided that in the event of a divorce, the wife would receive, in lieu of maintenance, support, and equitable distribution, the sum of $25,000 for each year of the marriage. The parties also agreed to waive their interest in the elective share of each other’s estate, and to make no claim to property titled in the other’s name.

According to financial statements attached to the premarital agreement, the future husband had assets of more than $10,000,000, while the future wife had assets of approximately $170,000. The agreement was signed in the office of the husband’s attorney, in the presence of another attorney who was purportedly representing the wife.

At the time of the marriage, the wife, who had a background in marketing works of fine art to corporations, had recently opened an art gallery in California. She closed this business and relocated to Pine Bush, New York, in order to reside with the husband in preparation for their marriage, and assist him in his business endeavors. These included real estate development, as well as breeding thoroughbred horses and managing polo ponies.

In October, 2010, within days of New York’s adoption of no-fault divorce, the husband commenced this action for divorce. There were no children of the marriage.

Continue Reading Another Prenup Bites the Dust, Maybe

The Second Department seems to have taken another bite out of prenuptial agreements. My March 25, 2013 post asked, Is it Open Season on Prenuptial Agreements? That post discussed the Second Department’s February, 2013 decision in Cioffi-Petrakis v. Petrakis and its December, 2012 decision in Petracca v. Petracca. Both cases affirmed Supreme Court Nassau County decisions setting aside the prenuptial agreements in issue,

Now, in an October 15, 2014 decision in McKenna v. McKenna, the Second Department modified an order of Nassau County Supreme Court Justice Margaret C. Reilly that had granted a husband summary judgment motion declaring the parties’ prenuptial agreement to be valid and enforceable. Justice Reilly had also denied the wife’s motion for an award of pendente lite maintenance and counsel fees.

Holding that summary judgment was not warranted, the appellate court may have increased or changed the burden needed to uphold a prenuptial agreement; changing the role of a contract’s “merger clause.” That clause declares that no factual representations not specifically referenced in the contract may later be used to claim the contract was fraudulently induced. Typically, it is a shield used to protect the agreement from attack.

In McKenna, the Second Department suggests a merger clause may be used as a sword: preventing a court from learning the wife’s actual knowledge of the husband’s finances at the time the prenuptial agreement was entered. As that knowledge could only have come from representations of the husband, the merger clause would bar proof of such representations not referenced by the agreement.

Continue Reading It Just Became Tougher To Validate Prenuptial Agreements

The second of four decisions this month with an international flavor was also decided by New York County Supreme Court Justice Ellen Gesmer.

In M v. M, 2014 N.Y.Misc. Lexis 3201, decided July 3, 2014, Justice Gesmer again voided a marital agreement, this time applying the laws of Spain and the Dominican Republic.

On June 27, 2001, one year and five months before their marriage, the parties signed an Agreement in Madrid, Spain, that purported to govern the disposition of property in the event of marriage and divorce. As with the Agreement in J.R. (see yesterday’s blog post), it provided that the parties would marry in a system of absolute separation of property.

At the time of the Agreement, the wife, born in the Dominican Republic, had Italian citizenship and was a domiciliary of Spain. The Husband is a citizen of Spain.

The parties were married in the Dominican Republic on December 12, 2002. Their marriage certificate, and the certification issued by the Office of Vital Statistics from the local government district, so listed the husband as a Spanish citizen, domiciled in Spain, and the wife as an Italian citizen, domiciled in Spain.

The wife commenced this divorce action in New York in 2012. Seeking now to invalidate the Agreement, the wife alleged that she never read the Agreement before signing it, that no one else read it to her, and that no formalities, particularly an oral recitation of the Agreement, were conducted when it was signed. She claimed that the husband brought her to the office of his attorney, and asked her to sign an accounting document drafted by his attorney to help him protect assets from business dealings. She claimed she never saw the document before the evening she signed it, and never saw or discussed it with the husband again until he raised it after commencement of this action. The husband disputed the wife’s claimed lack of awareness of the contents and significance of the Agreement.

Continue Reading Melting Pot (Part 2 of 4): Prenuptial Agreement Voided Applying the Laws of Spain and the Dominican Republic

The failure of a prenuptial agreement to specify that earnings during the marriage were separate propertywarranted a breach-of-contract recovery as part of a distribution on divorce when those earnings used to pay sparate liabilities. So held Supreme Court New York County Justice Laura E. Drager in her January 15, 2014 decision in R.B. v. M.I (New York Law Journal published decision).

Once again, the focus of the court’s attention was on the import of a prenuptial provision that limited marital property to that held jointly by the parties.

In Zinter v. Zinter, Saratoga County Supreme Court Justice Thomas D. Nolan, Jr., last month held it was unconscionable for a prenuptial agreement to give the husband  power to control whether earnings and other after-marriage acquired property would be placed into joint or indiviual accounts, and thus marital or separate property (see, my March 17, 2014 blog post).

Here, the Justice Drager held that whether pproperty was owned jointly or individually at the commencement of the divorce action did not end the inquiry, if a breach of contract claim arising during the marriage is viable.

Continue Reading Failure in Prenup to Specify Earnings as Separate Property Warrants Recoupment

After surgically excising eight words, Saratoga County Supreme Court Justice Thomas D. Nolan, Jr., in his February 7, 2014 decision in Zinter v. Zinter, upheld the balance of a prenuptial agreement. Those words had given the husband the unconscionable power to control whether earnings and other after-marriage acquired property would be placed into joint or indiviual accounts, and thus marital or separate property.

In this divorce action, the parties were married on December 23, 2005. The wife was then 29 years old, a music teacher with a Master’s degree, and reported a net worth of $71,500.00. The husband was then 35 years old, a college graduate, and an officer and part owner of his family-owned and operated business, with a reported net worth of approximately $2.7 million.

The husband had retained an attorney to prepare a prenuptial agreement. In November 2005, both the prospective husband and prospective wife met with that attorney to review the proposed agreement. At the time, the wife was not represented by counsel. The husband’s attorney provided the wife with the names of three attorneys experienced in matrimonial law. Shortly thereafter, she retained one of them, with whom the wife met three times before the agreement was signed four days before the marriage.

Continue Reading Court Strikes Prenup Provision Giving Husband the Power to Determine Whether After-Marriage Acquired Property was Marital or Separate

In its September 18, 2013 decision in Abramson v. Gavares, the Second Department briefly reviewed the interplay between prenuptial agreements and interim awards in divorce actions.

In this case, the parties were married in 2004 and hade one child, born in 2006. This divorce action was commenced in 2009 [before the 2010 laws on counsel fees and temporary maintenance].

On the wife’s motion for various relief pendente lite, Nassau County Supreme Court Justice Margaret C. Reilly had awarded the wife $4,250 per month temporary child support, $1,000 per month in temporary maintenance, and a $15,000 interim counsel fee. The husband was also directed to pay 100% of the costs of the court-appointed forensic evaluator and the attorney for the parties’ child.

On appeal, the husband challenged certain parts of the award on the basis of the prenuptial agreement entered into by the parties. The Second Department upheld the awards of child support and counsel fees, but struck the award of temporary maintenance.

Continue Reading Second Department Approves Interim Counsel Fee in Excess of Prenuptial Agreement’s Cap, But Reverses Award of Interim Spousal Maintenance

In its February 20, 2013 decision in Cioffi-Petrakis v. Petrakis, the Second Department affirmed the decision of former Nassau County Supreme Court Justice Anthony J. Falanga which set aside the parties’ prenuptial agreement. Indeed, decisions over the past year indicate that there may be a pendulum swinging towards easing the burden on the party (generally, the wife) attacking such agreements.

For example, in its December 5, 2012 decision in Petracca v. Petracca, the Second Department affirmed the decision of Nassau County Supreme Court Justice Jeffrey S. Brown that set aside a postnuptial agreement due to the husband’s overreaching at the time of signing some 16 years earlier (see the blog post of December 10, 2012: “Postnuptial Agreement Vacated for Overreachong 16 Years After Entry).

In Cioffi-Petrakis, the wife contended that her husband had reneged on his oral promise to tear up their prenuptial agreement once she had children made shortly before the pre-nuptial agreements’s execution (the parties now have two sons and a daughter). That promise was not referenced in the parties’ written agreement entered just four days before the parties’ marriage. Moreover, the parties had disclaimed reliance upon oral statements by either party, a relatively standard provision in the agreement, itself. Nevertheless, the Second Department agreed with Justice Falanga that the evidence supported the wife’s claim that she had been fraudulently induced to accept the deal.

Ironically, three years earlier (72 A.D.3d 868, 898 N.Y.S.2d 861), the Second Department affirmed Justice Falanga’s prior order dismissing the wife’s causes of action which attacked the very same agreement on the grounds of unconscionability. There, the Second Department was satisfied with the record’s demonstration that the wife was represented by independent counsel during the prenuptial agreement negotiations (her counsel signed the agreement as a witness). Moreover, the agreement itself recited that the wife entered into it “freely, voluntarily and with full knowledge of all circumstances having a bearing on this agreement.” At that time, the Second Department opined that the wife was provided with meaningful bargained-for benefits, including a one-third interest in one of the defendant’s businesses. The wife had advanced nothing but conclusory and unsubstantiated assertions insufficient to defeat the husband’s motion for summary judgment dismissing the cause of action to set aside the parties’ prenuptial agreement on the ground of unconscionability.

Continue Reading Is it Open Season on Prenuptial Agreements?

On the wife’s motion for temporary relief, Supreme Court, New York County Justice Deborah A. Kaplan in Lennox v. Weberman, awarded the wife tax-free maintenance of $38,000 per month, plus the wife’s unreimbursed medical expenses up to $2,000 per month, interim counsel fees of $50,000, and expert fees of $35,000.

By its February 26, 2013 decision, the First Department modified that order, on the facts, to provide that such pendente lite relief would be treated as an advance on the 50 percent of the parties’ joint funds to which the wife is entitled pursuant to the parties’ prenuptial agreement.

Notwithstanding that the wife had waived any claim to a final award of alimony or maintenance in the parties’ prenuptial agreement, Justice Kaplan was entitled, in her discretion, to award pendente lite relief in the absence of an express agreement to exclude an award of temporary maintenance.

As to the amount of the temporary maintenance award, the appellate court found that Justice Kaplan properly applied the new temporary maintenance formula set forth at Domestic Relations Law § 236(B)(5–a)(c)(2)(a). Specifically, Justice Kaplan had listed all 19 of the enumerated factors, explained how 7 of them supported an upward deviation to $38,000 per month from the $12,500 a month in guideline support, and found that $38,000 per month was not “unjust or inappropriate.”

Continue Reading Pendente Lite Award Prospectively Charged as an Advance Against Wife’s Share of Marital Property