New York Court Discusses Enforceability of Post-Nuptial Agreements

Many people make the practical decision to enter into marital agreements before or after marrying in an effort to protect their assets. While such agreements are designed to avoid protracted litigation regarding the division of property, in some instances, the agreements themselves become the topic of dispute. For example, parties may argue that marital agreements should be disregarded because they are unconscionable or arose out of fraud. As demonstrated in a recent New York opinion, though, a party seeking to set aside a postnuptial agreement faces a high burden of proof. If you need assistance drafting or defending a prenuptial or postnuptial agreement, it is in your interest to speak to a seasoned New York family law attorney as soon as possible.

History of the Case

It is alleged that the husband and the wife married in 2005 when they were both in their fifties. At the time, the plaintiff owned her own business, and the husband was a successful attorney. Thus, they entered into a prenuptial agreement prior to marrying that defined any income earned during the marriage as marital. After they were married, they entered into a postnuptial agreement that changed the definition of income earned during the marriage to separate property.

Reportedly, in 2016 the wife instituted divorce proceedings. The husband then moved to set aside the postnuptial agreement on the grounds of fraud, unconscionability, overreaching, and lack of consideration. The court denied the husband’s motion, and he appealed.

Grounds for Setting Aside a Prenuptial Agreement

The appellate court affirmed the trial court ruling. The appellate court explained that a spouse arguing that a postnuptial agreement should be set aside bears the burden of proving a specific, fact-based inequality. If the person meets this burden, the burden then shifts to the party arguing for enforcement of the agreement, who must then disprove that the agreement is unfair or inequitable.

The court explained that a party is presumed to understand and agree to the provisions of a contract he executes. Here, the court noted that the agreement was not complex or beyond the understanding of the husband, a trained attorney. Further, he failed to show he relied on the wife’s misrepresentation or material omission as required to demonstrate fraud. Thus, the court found he failed to show it was the product of fraud or overreaching.

Similarly, while the court agreed with the husband’s assertion that postnuptial agreements are contracts that require consideration, it found that the husband failed to show a lack of consideration in the subject case. Finally, the court explained that an unconscionable agreement is one that no reasonable person would make and no fair-minded person would accept, as the inequality is so clear and profound that the agreement shocks the conscience and confounds judgment. The court clarified, though, that an agreement is not unconscionable merely because it contains one-sided provisions. As the husband failed to show unconscionability, the trial court ruling was affirmed.

Speak with an Experienced New York Family Law Attorney

Marital agreements are useful tools for avoiding contentious divorces and safeguarding wealth, but they are not immune to contests. If you need advice regarding a prenuptial or postnuptial agreement, you should speak to an attorney about your options. Ksenia Rudyuk is an experienced New York family law attorney who can advise you of your rights and help you to seek your desired outcome. You can reach Ms. Rudyuk through the form online or at 212-706-2001 to schedule a conference.

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