Post Nuptial Agreements Gain Popularity

Posted by Daniel Clement on May 31, 2007

The Financial Times reports that there is a growing trend for post nuptial agreements.   Like the pre-nuptial agreement, the post-nuptial agreement sets out the parties’ rights, obligations and liabilities upon the termination of marriage by either death or divorce. The only difference between the two marital agreements is that the post-nuptial agreement is executed sometime after the parties are wed.

According to the Financial Times, post-nups are particularly popular with hedge fund managers.   This, however, makes perfect sense.   The financial tycoons are merely seeking to limit their downside risk in the event that their marriages become, to use the street slang, “bearish” (or in the event they want to seek other opportunities.)

The article notes that at least one hedge fund requires its new partners to have a marital agreement in which the partner’s spouse waives his/her claims against the fund.   The hedge fund firms are looking to protect themselves since the partnership interest is a marital asset and is subject to equitable distribution.   In order to ascertain the value of the partnership interest, the partnership needs to be appraised opening the door to an inspection of the hedge funds books and records.

So why would a spouse waive his or her claim against partnership interest in the hedge fund? The spouse is probably banking that the marriage will continue and he/she will continue to enjoy the lifestyle afforded by interest in the hedge fund. But, in the event the marriage ends in divorce, the consideration for the waiver is probably a generous distributive award.   

Psychological and Economic Effects of Divorce: Men and Women Affected Differently

Posted by Daniel Clement on May 30, 2007

According to a report in Today’s Family News, men and women going through a divorce are not alike.  Men going through divorce are more likely to become depressed.  Women are more likely to suffer financially.

The article, based upon a Canadian Study, found that "men were six times more likely to be depressed following a separation or divorce than men who remained married. That was nearly double the likelihood of divorced or separated women undergoing a similar episode compared to women whose marriages were intact."

Of course, one likely explanation for this is that men as a result  of divorce are far more likely to lose close or daily contact with their children.

One the other hand, women were about three times more likely than men to suffer a substantial loss in household income after their marriage broke down.

 The results of the study can be found here.

Appeals Court Denies Divorce To Wife Assaulted- No Cruel and Inhuman Treatment

Posted by Daniel Clement on May 23, 2007

The Appellate Division, in the aptly named case, Gross v. Gross, reversed a trial court’s grant of a divorce based upon the husband’s cruel and inhuman treatment of the wife. 

In reaching this decision, the appeals panel reaffirmed that in marriages of long duration, a high degree of proof of cruel and inhuman treatment is necessary to make out a cause of action.   In this case, Mrs. Gross claimed that Mr. Gross forced himself on her sexually ramming her up against the bathroom wall. Perhaps, if the parties had not been married for thirty seven years, this sexual assault may have been a sufficient basis for a divorce.

Not to beat a dead horse, but if New York had a no fault divorce, it would have been unnecessary to measure the amount abuse needed to sustain a cause of action for cruel and inhuman treatment.

The New York Legal Update wrote this about the decision:

"Cruel and inhuman treatment" is one of the six grounds for granting a divorce in New York. Just what type of conduct constitutes "cruel and inhuman treatment." It is defined by Domestic Relations Law § as:

treatment of the plaintiff by the defendant such that the conduct of the defendant so endangers the physical or mental well being of the plaintiff as renders it unsafe or improper for the plaintiff to cohabit with the defendant.

A decision from the First Department yesterday (Gross v Gross, 2007 NY Slip Op 04362) illustrates and reminds that obtaining a divorce on cruel and inhuman treatment is not necessarily an easy thing to do, and that somewhat isolated incidents involving physical altercations is not necessarily enough. The evidence at trial was as follows.

Plaintiff wife was asked at trial whether defendant had ever "physically force[d] himself on [her] sexually." In response, plaintiff testified that "I would have to say yes. It's only one time that, really where he hurt me." Plaintiff explained that defendant "[r]ammed [her] up against the wall" in the bathroom of their residence. Plaintiff did not elaborate in any other way about what she meant in stating that defendant had "force[d] himself on [her] sexually." Plaintiff offered no evidence that she had sustained any injuries as a result of this incident. In fact, she testified on cross-examination that she did not suffer any physical injuries as a result of the incident. Plaintiff also testified that defendant, on many occasions, "physically grabbed [her]." When asked to describe how defendant "grabbed" her, plaintiff stated: "[h]e'll grab me, he'll pull me down the hall, he'll block me so I can't leave the room, throw me on the bed, push me against the wall." Again, no testimony was elicited from plaintiff that she sustained any injuries as a result of defendant's conduct.

The Supreme Court had granted the divorce. However, on this evidence, the First Department reversed and dismissed the complaint. The Court noted that the parties had been married for over 37 years, and that under such circumstances, a "high degree" of proof of cruel and inhuman treatment was required. With respect to the plaintiff's testimony, the Court stated that it could include conduct ranging from the criminal (e.g., forcible rape) to the merely obnoxious. But it stated that reprehensible and highly offensive behavior is not necessarily sufficient to establish the cruel and inhuman treatment. Here it found that the plaintiff's uncorroborated testimony regarding unwanted physical contact was vague and general, and there was no evidence as to the effects of defendant's conduct on her physical or mental well-being. The Court further noted that the parties continued to reside together in the marital residence through the trial, they were able to talk to each other in a civilized manner, have dinner together every night, go out for meals and to the movies, and attend social functions.

The lesson here is clear that if there is not a lot of evidence of cruel and inhuman treatment another ground for divorce should be pleaded

Grandmother Granted Visitation By Appeals Court

Posted by Daniel Clement on May 22, 2007

The Appellate Division granted a grandmother visitation with her grandchildren in the case In the Matter of Carol Steinhauser.

Of significance, the Court noted that  that mere animosity between the children’s father and his mother-in law was not a sufficient basis for denying visitation. In the brief opinion, the Court, after detailing the two pronged-inquiry for considering a grandparent’s petition for visitation,concluded that visitation would be in the best interests of the children.

"When grandparents seek visitation under [Domestic Relations Law] section 72(1), the court must undertake a two-part inquiry. First, [the court] must find standing based on death or equitable circumstances'; and if [the court] concludes that the grandparents have established the right to be heard, then it must determine if visitation is in the best interest of the grandchild'" (Matter of E.S. v P.D., 8 NY3d 150, 157, quoting Matter of Emanuel S. v Joseph E. L., 78 NY2d 178, 181). "[T]he courts should not lightly intrude on the family relationship against a fit parent's wishes. The presumption that a fit parent's decisions are in the child's best interests is a strong one" (Matter of E.S. v P.D., supra at 157). "[W]hile . . . the problems created by parent-grandparent antagonism cannot be ignored, an acrimonious relationship is generally not sufficient cause to deny visitation" (Matter of E.S. v P.D., supra at 157). " The question of visitation, which involves a determination [*2]of what is in the child's best interests, is left to the discretion of the court'" (Matter of Poppe v Ruocco, 37 AD3d 608, 609, quoting Matter of Weis v Rivera, 29 AD3d 812, 813; see Lo Presti v Lo Presti, 40 NY2d 522, 527). "An essential part of this inquiry is whether a meaningful relationship exists between the petitioning grandparents and the child" (Matter of Weis v Rivera, supra at 609; Matter of Principato v Lombardi, 19 AD3d 602, 603). The Family Court's determination concerning whether to award visitation " depends to a great extent upon its assessment of the credibility of the witnesses and upon the assessments of the character, temperament, and sincerity of the parents'" (Matter of Thomas v Thomas, 35 AD3d 868, 869, quoting Maloney v Maloney, 208 AD2d 603, 603; see Matter of McMillian v Rizzo, 31 AD3d 555, 555). "Therefore, it should not be set aside unless it lacks a sound and substantial basis in the record" (Matter of Thomas v Thomas, supra; see Matter of Keylikhes v Kiejliches, 25 AD3d 801, 801).

Here, the death of the children's mother provided the maternal grandmother with automatic standing to seek visitation, although it did not guarantee any such award (see Domestic Relations Law § 72[1]; see also Matter of Principato v Lombardi, supra at 602). The evidence established that the maternal grandmother enjoyed a meaningful relationship with the children. Additionally, the existence of animosity between the maternal grandmother and the father was not a proper basis for the denial of visitation to the maternal grandmother (see Matter of Weis v Rivera, supra). The Family Court improvidently exercised its discretion in finding that it was not in the best interests of the children to have any visitation with their maternal grandmother. We therefore remit this matter to the Family Court, Suffolk County, to set up a schedule of appropriate supervised visitation.

The Myths of Divorce:: A College Study

Posted by Daniel Clement on May 18, 2007
The National Marriage Project at Rutgers University put out a fascinating study debunking The Top Ten Myths of Divorce.

Perhaps the most interesting portions of the study, address the issues of divorce and children. The study shows, not surprisingly, that divorce has deep, long lasting emotional effects on children, and increases the likelihood that their future marriages will end in divorce. The report concludes that except for in the case of high conflict homes, children are better of living in a home with unhappy parents than seeing their parents divorce.

I have excerpted the relevant portions here:
Divorce increases the risk of interpersonal problems in children. There is evidence, both from small qualitative studies and from large-scale, long-term empirical studies, that many of these problems are long lasting. In fact, they may even become worse in adulthood.

Marriages of the children of divorce actually have a much higher rate of divorce than the marriages of children from intact families. A major reason for this, according to a recent study, is that children learn about marital commitment or permanence by observing their parents. In the children of divorce, the sense of commitment to a lifelong marriage has been undermined.

A recent large-scale, long-term study suggests otherwise. While it found that parents’ marital unhappiness and discord have a broad negative impact on virtually every dimension of their children’s well-being, so does the fact of going through a divorce. In examining the negative impacts on children more closely, the study discovered that it was only the children in very high conflict homes who benefited from the conflict removal that divorce may bring. In lower-conflict marriages that end in divorce—and the study found that perhaps as many as two thirds of the divorces were of this type—the situation of the children was made much worse following a divorce. Based on the findings of this study, therefore, except in the minority of high-conflict marriages it is better for the children if their parents stay together and work out their problems then if they divorce.

Clear and Unambiguous Agreements Avoid Future Disputes

Posted by Daniel Clement on May 15, 2007

It seems to be just common that when negotiating any type of marital agreement, it is important to make sure that your every intention is clearly spelled out, even if the intent seems obvious to you..  Such is the lesson of recently decided case of Genovese v Axel.

In Genovese:

[T]he parties executed a prenuptial agreement dated April 17, 2000, whereby they agreed to waive their respective rights of election pursuant to EPTL 5-1.1-A. Following the waiver provision, the parties agreed, in clause 1(ii), that "[n]otwithstanding anything to the contrary" they would each "execute their respective Last Will & Testament[s] leaving a minimum of 33 1/3% of their gross estate to each other."

Needless to say, a few years later the parties divorced. Following the divorce, the ex-wife sought to have her husband name her as a one third beneficiary of his estate.

It seems obvious that it was the the couple’s original intent  to make reciprocal obligation to name the other as a beneficiary of his/her estate conditioned upon the continuation of the marriage.  Nothing in the opinion indicates that the parties wished to bind  their post divorce estates.  Unfortunately, , the parties had to spend thousands in legal fees and go as far as the Appellate Division to reach this result.

Where an agreement is clear and unambiguous on its face, as here, the intent of the parties is gleaned from the four corners of the writing as a whole with a practical interpretation of the language employed so that the parties' reasonable expectations are met (see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162; Rainbow v Swisher, 72 NY2d 106, 109; Sunrise Mall Assoc. v Import Alley of Sunrise Mall, 211 AD2d 711). In examining the agreement, the court should consider the relation of the parties and circumstances under which it was executed. "Particular words should be considered, not as if isolated from the context, but in the light of the obligation as a whole and the intention of the parties as manifested thereby" (Kass v Kass, 91 NY2d 554, 566 quoting Atwater & Co. v Panama R.R. Co., 246 NY 519, 524).

The one-third provision appears under the heading "release of rights," in which the parties employed language such as "surviving spouse" and "deceased spouse," which evidences their intent that the parties remain married in order to receive a one-third disposition under each other's will. The plaintiff contends that the use of the phrase "notwithstanding anything to the contrary" demonstrates that the parties intended the one-third provision to remain in effect regardless of their marital status. We disagree. That language modifies the previous provision, in which the parties waived the spousal right of election. The plaintiff's interpretation would require this court, under the guise of interpretation, to imply a provision that the parties chose to omit (see Karmin v Karmin, 19 AD3d 458, 459), namely that the obligation contained in clause 1(ii) would extend to one who was no longer a spouse.

The morale of the story, when drafting an agreement, make sure that the agreement is as clear as possible.  Do not trust anything to extrinsic or common sense interpretation . If there is a dispute over the agreement, rest assured, the person with whom you have a dispute will have a different recollection of the basis of the bargain.  

Divorce Attorneys' Ad-"Life is Short, Get a Divorce"- Demeans Profession

Posted by Daniel Clement on May 08, 2007

A billboard ad depicting a headless male torso and tanned female cleavage heaving forth from a black lace bra with the caption “Life is Short, Get a Divorce” is getting a lot of reaction on the blog-o-sphere today. 

This ad, placed by a Chicago divorce firm (according to ABC News-an all female firm) is properly garnishing criticism.   While an attorney advertising his/her services is not objectionable, inducing (or “seducing”) a client to divorce is. While it is doubtful that a picture of a scantily clad woman would alone cause a man to leave his wife, it is not the divorce lawyer’s job to tempt the client by showing him that “grass may be greener” outside of marriage.

This ad does not promote the legal profession, highlight the firm’s advocacy skills or evidence the firm's legal knowledge. It does not even describe what services the law firm offers. Instead, it plays on sex and demeans the profession. It is precisely this type of undignified and unprofessional ad that caused the New York Court’s to regulate attorney advertising.

Unfortunately, the ad worked. The ad is getting noticed and the law firm’s is getting publicity.


Divorce Denied For Failure to Prove Grounds

Posted by Daniel Clement on May 02, 2007

After recently staying a decision after trial so as to urge the New York State Legislature to adopt a no-fault divorce bill, Justice Robert Ross, in another case, denied a husband a divorce because he failed to prove that his wife had constructively abandoned him.  

From the account of case appearing in Newsday, the wife opposed the divorce solely to gain ad,vantage on the economic issues.    This is the very evil no-fault divorce is intended to cure. 

It is not uncommon in cases where neither party has a fault grounds for divorce, for one party to oppose the divorce, not because he/she desires to preserve the marriage, but to extract some concession from his/her spouse-the end result-more expensive and more acrimonious divorces,   In other words, absent no fault divorce, freedom has a cost.

Divorce Based Upon Separation to Be Reduced to 3 Months

Posted by Daniel Clement on May 01, 2007

Legislation to shorten the one year separation grounds for divorce to three months was approved by the Judiciary Committee of the New York State Assembly last week.

The current law requires parties to leave separate and apart pursuant to a written agreement for one year in order in order to state a grounds for divorce.   The new law would shorten this period to three months.

Critics have aptly pointed out that this is not a “no-fault” divorce, in which the parties would only need allege that the marriage has irretrievably broken down with no prospect of reconciliation.   Instead this proposal requires that the parties enter into a written agreement which resolves all the issues of the divorce including equitable distribution, child custody and support.

This bill is not, however, a substitute for no-fault divorce.   A no-fault divorce is needed for those cases in which there is an absence of marital fault (e.g., no one is guilty of adultery, abandonment or cruel and inhuman treatment), and the other issues of divorce (equitable distribution, child custody, etc) require a judicial determination.