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Just because an agreement between spouses splits assets in an unequal or one-sided basis does not render the agreement unconscionable.

It has long to the policy of courts to hold parties to the terms of their agreements. An agreement between spouses, which is fair on its face, will be enforced even if one party received less than one half of the value of the marital assets unless there is proof of fraud, duress, overreaching, or unconscionability.

In the recently decided case of Shultz v. Shultz, the Appellate Division detailed what makes an agreement unconscionable:

An unconscionable bargain is one which no person in his or her senses and not under delusion would make on the one hand, and no honest and fair person would accept on the other, the inequality being so strong and manifest as to shock the conscience and confound the judgment of any person of common sense.  However, an agreement is not unconscionable "merely because, in retrospect, some of its provisions were improvident or one-sided" and simply alleging an unequal division of assets is not sufficient to establish unconscionability.

The reason for this strict standard is obvious-no agreement would be free from attack if it could, in retrospect, be reviewed for fairness

In Shultz, the Court cited two factors why it found the claims of unconscionability to be lacking. First, the defendant was represented by independent counsel during negotiations involving the parties' post nuptial agreement. Secondly, the agreement recited that the defendant entered into it "freely, voluntarily and with full knowledge of its consequences.

 

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Citing a recent New York Times article, Victor Medina in the New Jersey Divorce and Family Law Blog, comments on the rise in the use of post-nuptial agreements, a trend I noted several months ago, here.

Mr. Medina gives a great description of what post- nuptial agreements really are:

What are “post-nuptial agreements”? Well, unlike pre-nuptial agreements, which deal with parties interested in getting married before they’re actually married, and unlike property settlement agreements, which deal with parties interested in not being married after they’re actually married…post nuptial agreements are intended for a married couple who did not previously enter into a premarital agreement and, despite wanting to be married, would like to plan for the division of property in case they later get divorced.

Against this back drop, he provides the minimum requirements for a post-nuptial agreement to be upheld in New Jersey.

1) There needs to be full disclosure by the parties.
2) Each party must have independent representation by his/her own lawyer.
3) There needs to exist the absence of coercion or duress.
4) The terms must be fair and equitable.

In New York, the requirements are quite similar, the agreement must be properly signed and acknowledged and entered into without fraud, coercion or duress. The agreement cannot be unconscionable.

One way of assuring that a martial agreement will be upheld, is to have full disclosure of assets, liabilities and income. In addition, the parties should each be independently represented by counsel.

While all agreements are subject to attack and there is no certainty that any agreement will be upheld, New York courts encourage parties in a matrimonial setting, to put their affairs in order by written agreement. The terms of a valid martial agreement will be enforced and there is a heavy burden on the party attacking the agreement to show why it should be set aside.

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