How to Steal Defeat From Victory: Improperly Executed Martial Agreements are Unenforceable
The old adage is, “Only a fool has himself for a lawyer.” But every once in awhile a case is reported to prove that it is even more foolish for a lay person to represent himself instead of retaining an attorney.
Certainly, this would seem to be the rule in cases in which the parties plan to sign an agreement, whether it be a pre-nuptial, post-nuptial or separation agreement. In order to be enforceable and valid, a marital agreement not only has to be signed and notarized, but “subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded. Dom Rel. L. §236(B)(3)(emphasis added).
The failure to properly acknowledge an agreement will invalidate it, rendering it unenforceable.
In a recently reported case, the parties signed a handwritten post-nuptial agreement, which provided that a cooperative apartment would be purchased by Wife for $750,000 and would remain her separate property. She, alone, would be solely entitled to all of its income and profits. The parties signed the one page agreement before a notary. The agreement was, however, not acknowledged.
Years later, when the parties divorced, the property was valued at $2,300,000. The husband contended that since the agreement was not executed as required by statute, the agreement was not valid. The Court agreed.
In an earlier case, the Court of Appeals, Matisoff v. Dobi. 90 N.Y.2d 127, 659 N.Y.S.2d 209 (1997) explained why the law requiring the agreements to be acknowledged is absolute.
Primarily, a bright-line rule requiring an acknowledgment in every case is easy to apply and places couples and their legal advisers on clear notice of the prerequisites to a valid nuptial agreement. Consequently, spouses or prospective spouses will not need to speculate as to whether the enforceability of their agreements will be supported by their original motivation or subsequent economic relationship during the marriage. Certainly, consistent and predictable enforcement is desirable with regard to such important marital agreements. . .
Acknowledgment, moreover, serves a valid purpose apart from prevention of fraud. Marital agreements within section 236(B)(3) encompass important personal rights and family interests. As we explained with regard to the similar prerequisites for proper execution of a deed of land:
"When [the grantor] came to part with his freehold, to transfer his inheritance, the law bade him deliberate. It put in his path formalities to check haste and foster reflection and care. It required him not only to sign, but to seal, and then to acknowledge or procure an attestation, and finally to deliver. Every step of the way he is warned by the requirements of the law not to act hastily, or part with his freehold without deliberation"
(Chamberlain v Spargur, 86 NY  at 607, supra).
Here, too, the formality of acknowledgment underscores the weighty personal choices to relinquish significant property or inheritance rights, or to resolve important issues concerning child custody, education and care.
Certainly, had the Wife in the recent case sought the aid of counsel in preparing the marital agreement, the agreement would have been properly acknowledged. The valid agreement would have rendered the wife immune to the husband’s claim of entitlement to her property. The wife’s two million dollar asset would have been fully protected. I would have to guess that the value of the asset to be protected dwarfed the attorney’s fee “saved” by the wife.
The savings grace for the wife is that although the agreement is unenforceable, the court could take it into consideration when attempting to resolve the very issues the agreement sought to resolve. Indeed, the agreement certainly would be persuasive evidence as to what the parties believed was a fair and reasonable division of assets before marital discord arose and long before the commencement of the divorce action..