March 2013 Archives

March 28, 2013

New York Times Room For Debate: Prenups

On March 21, 2013, the New York Times featured a debate between six professionals regarding the benefits and drawbacks to entering a prenuptial agreement in light of the voiding of the Petrakis Prenup. Click here for the full discussion.

March 14, 2013

New York Prenuptial Agreements May Be Thrown Out Based on Allegations of Verbal Promises

Historically, it has been notoriously difficult to get a prenuptial agreement thrown out in New York. This is because there is strong public policy in favor of allowing individuals the freedom to enter into their own contracts. Often, when prenuptial agreements are overturned by the court, it is due to a defect on the face of the document, not on the terms of the contract itself. It is for this reason that we highly advise our clients to completely understand what they are signing when entering into these agreements.

A Nassau County woman, Elizabeth Petrakis, has recently succeeded in convincing a unanimous panel of the Appellate Division, Second Department that her prenuptial agreement should be set aside on the basis of fraudulent inducement. (Read the opinion here.) She claimed that her husband purposefully lied to her so that she would sign an agreement that he knew she wouldn't have signed if he told her the truth. Ms. Petrakis claimed that just 4 days before their wedding, her husband convinced her to sign a prenuptial agreement that would provide him with all of the assets in the event of divorce by promising her that he would "tear it up" when they had children. Her husband, Peter Petrakis, claimed that he never made that promise. After a trial that lasted 13 days over the course of 9 months, the trial judge determined that he believed the wife's testimony over the husband's and he set aside the prenuptial agreement. The Appellate Division has now upheld that decision.

I agree with other attorneys who are concerned that this case could lead to dangerous precedent.

Our clients enter into prenuptial agreements because they want to secure their rights and obligations in the event of a divorce. If other courts follow this court's precedent and allow allegations of verbal promises to set these agreements aside, we can see many other prenuptial agreements being challenged in court.

This case is a reminder to our clients who want a prenuptial agreement to be signed that transparency is of the utmost importance and that they should give their fiancé plenty of time to review the agreement before the wedding date. For our clients who are being asked to sign a prenuptial agreement, this case is a reminder that these are serious contracts and that while they may be thrown out in rare circumstances, it can take years and hundreds of thousands of dollars in legal fees to have your case heard in court.