Prenuptial

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In its December 16, 2021 decision in Anderson v. Anderson, New York’s highest court ruled that the parties to a prenuptial or postnuptial agreement must acknowledge their signatures within a reasonable time of their signing. In a second appeal in Koegel v. Koegel, the Court of Appeals in its same decision also held that if the agreement is acknowledged by the parties at or within a reasonable time after signing, a defect in the acknowledgment certificate form may be cured at a later time by extrinsic proof.

In Anderson, the wife had signed and acknowledged the nuptial agreement the month after the wedding. Regardless of when the husband signed the agreement, his signature was not acknowledged until nearly seven years later, shortly before he commenced a divorce action and in anticipation of his wife’s imminent divorce filing.

In Koegel, the parties executed a nuptial agreement approximately one month before their marriage. The agreement provided that neither party would claim any part of the other’s estate, with both waiving their respective elective or statutory shares. Both parties signed the agreement, and their signatures were acknowledged, each by his or her own lawyer. The acknowledgment followed the statutory requirements in all but one respect: both lawyers failed to attest that the signer was known to them.Continue Reading Delayed Acknowledgment Invalidates Nuptial Agreement; Defective Form Does Not

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

It depended on what the definition of “the” was.

In Babbio v. Babbio, the Appellate Division, First Department, on July 17, 2014 defined “the” and otherwise interpreted a prenuptial agreement in ways that cost a husband millions of dollars of separate property credits he sought in his divorce action.

Under the parties’ agreement, marital property, generally, was to be divided equally. However, the agreement also provided:

[i]n the event of an Operative Event, Marital Property [as defined elsewhere in the agreement] shall be distributed equally between [the parties] in accordance with the following provisions, except that if the parties have been married for ten (10) years or less and either party is able to identify One Million ($1,000,000) Dollars or more of Separate Property that was used for the acquisition of the Marital Property, that party shall first receive the amount of his or her contribution of Separate Property prior to the division of the remaining value of such property, if any. [emphasis added]

“Operative Event” was defined, inter alia, as “the delivery by [either party] to the other of written notification … of an intention to terminate the marriage.” Here, the Court held that it was the date of the notification, and not the date of distribution that was determinative. As a result, the husband became entitled to the benefits of this provision.

However, construing the parties’ prenuptial agreement in what the Court viewed as being in accord with the plain meaning of its terms, and interpreting every part of the agreement “with reference to the whole”, the First Department found that the party seeking the credit must have contributed $1 million or more of his or her own separate property directly to the acquisition of the particular item of marital property at issue.Continue Reading Husband Denied Millions in Separate Property Credits Because of the Definition of "The"

Prenuptial Agreement.jpgThe premarital agreement of the parties limited their rights to obtain spousal support upon divorce. It also contained a waiver of their rights to counsel fees.

Nevertheless, recently-retired New York County Supreme Court Justice Saralee Evans awarded the wife $6,000 per month in unallocated pendente lite support (an award not specifying how much of it…

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When your lawyer tells you that you are about to make a really bad deal, you disregard that advice at your peril.

That is one lesson to be learned from a split-decision of the Appellate Division First Department in its April 17, 2012 decision in Barocas v. Barocas. The court affirmed a decision of Supreme Court New York County Justice Ellen Gesmer which for the most part denied a wife’s attack on the prenuptial agreement she signed with her future husband in 1995.

Their marriage two weeks after the agreement was signed is now ending in divorce. Under the parties’ agreement, Deborah Barocas will not receive any maintenance (personal support). (The agreement contained no provision regarding the support for the parties’ two children.) Moreover, under the agreement, Deborah will also not share in any property accumulated by Victor during the marriage. Indeed, the agreement provided that Deborah would forfeit any gifts or jewelry she had been given by Victor before and during the marriage. Over their 15 years of marriage, Victor accumulated some $4,600,000 in assets, while Deborah had only $30,550 in an I.R.A.

Deborah was born in Guyana, the second of seven children. She arrived in the United States in 1981, at the age of twenty-one. She obtained a GED in 1982, and worked menial jobs. In 1989, she worked part-time as a receptionist for Victor’s family business. While working there, the parties began to date. In 1993, she moved into Victor’s Sutton Place apartment. Other than sporadic attempts at small business ventures, Deborah did not work outside the home for the duration of the marriage. She has no further education and no special skills.

Now attacking that agreement, Deborah noted that she has no other assets or sources of income. She alleged that she can no longer work, as she is now 50 years old and that her husband had thwarted her efforts to get a college education and pursue a career during the marriage.

The three-judge majority of this five-judge appellate court upheld Justice Gesmer’s decision to uphold the property division provisions of the prenuptial agreement. With regard to those provisions, Deborah Barocas failed to establish that her execution of the agreement was the result of inequitable conduct on her husband’s part. Rather, the parties fully disclosed their respective assets and net worth.

Moreover, the agreement was reviewed by independent counsel. Indeed, Deborah’s own lawyer admittedly had told her that the agreement was “completely unfair” and advised against signing it. The fact that the husband’s attorney recommended the wife’s attorney, and that the husband paid Deborah’s counsel’s fees, was insufficient to demonstrate duress or overreaching sufficient to base an attack upon the agreement.  Still further, the claim that Deborah believed that there would be no wedding if she did not sign the agreement, that the wedding was only two weeks away and that wedding plans had been made, was an insufficient basis to attack the agreement on the grounds of duress.

Although application of the provisions would result in plaintiff [husband] retaining essentially all the property, courts will not set aside an agreement on the ground of unconscionability where inequitable conduct was lacking and simply because, in retrospect, the agreement proves to be improvident or one-sided . . . . The circumstances surrounding the execution of the agreement disclose no issue of fact as to whether there was overreaching. We therefore adhere to the general rule that “‘[i]f the execution of the agreement . . . be fair, no further inquiry will be made’. . . .

Continue Reading Signing a Prenuptial Agreement Against the Advice of Counsel Bars Subsequent Attack