Prenuptial Agreements – Waiver of Counsel Fees and Spousal Support
On December 16, 2014, the Appellate Division, First Department, held in Anonymous v. Anonymous, 350033/12, NYLJ 1202712899921 at *1 (App. Div., 1st, decided December 16, 2014) a counsel fee waiver provision in a prenuptial agreement might be set aside to allow an award of attorneys fees in a divorce where plaintiff was contesting the maintenance provision of that same agreement even if the agreement was otherwise determined to be valid. Prenuptial Agreements are very important documents that must be carefully reviewed prior to signing.
This case involved a plaintiff wife and defendant husband divorcing after 12 years where there was, and always had been, a large disparity in the assets of the parties. The parties had executed a prenuptial agreement that had been negotiated over a number of weeks, during which both parties were represented by counsel of their own choosing. The agreement contained a waiver of attorney’s fees, as well as clauses dictating the amount of maintenance that would be paid should the parties divorce, as well as the distribution of certain property.
When an action for divorce was commenced, the plaintiff wife moved to set aside the prenuptial agreement on account of fraud and overreaching, supported by allegations that the defendant husband had forced her to execute it under duress and then fraudulently failed to disclose the full extent of his assets or transfer a certain piece of property to the wife as promised. The Supreme Court held, and the Appellate Division affirmed, that the plaintiff had not met her burden to demonstrate any fraud or overreaching that would justify setting the agreement aside, for a number of reasons: (1) the parties had been represented by counsel during the extended negotiation about the terms of the agreement; (2) the agreement had stated that the wife was executing the agreement without needing to know the full extent of the husband’s assets and that she was aware that she was agreeing to less than what she might otherwise be due under equitable distribution; and (3) the wife had never requested the transfer of the property in question, and had not objected when it was sold.
The most important part of the ruling, however, affirmed the Supreme Court’s decision to allow the wife to argue at trial that she should be awarded attorneys fees despite the fee waiver in the prenuptial agreement. The Supreme Court had granted the wife’s motion to challenge the maintenance provisions of the agreement, as such a provision must be both “fair and reasonable at the time it is made” and “not unconscionable at the time of entry of final judgment in the divorce action.”
The above case illustrates how an agreement can be upheld while at the same time allowing a party to challenge the specific provisions for maintenance and counsel fees.
A prenuptial agreement is a very important document that will always have substantial financial consequences to a spouse. Prior to signing any prenuptial agreement, it is important to retain an experienced New York City matrimonial attorney.
The Law Office of Vivien I. Stark can provide you with an experienced lawyer to protect your interests.