Our Washington County family lawyers frequently advise our clients to be very careful when writing the marriage settlement agreement, because it will bind you for life. Your marriage settlement agreement is the most important document that you will sign in your Washington divorce process because it lays out the terms of what each party will receive and specifies future responsibilities to the other party. An example of this is Steven Simkin, an attorney at one of the nation’s largest firms, who attempted to change the terms of his MSA, and was rebuffed by the New York Court of Appeals, the highest court in the state.
The reason for the attempted alteration was that Simkin’s stocks, the majority of which he chose to retain in the divorce, were drained by the Madoff Ponzi Scheme. His ex-wife Laura Blank chose to receive a cash payout in exchange for the stocks, meaning that she received the value of the stocks before the stocks were revealed to be valueless.
When Bernie Madoff’s crimes were revealed, Simkin filed suit to alter the terms of the marriage settlement agreement because of the rapid alteration in what each of the former spouses received. Simkin argued that because of the contract law principle of “mutual mistake” (both parties mistakenly believed that they maintained an active brokerage account when in fact it was worthless) the contract terms should be substantially revised. The implication for their MSA is that their assets would have to be redistributed.
The Court of Appeals (highest NY state court) reversed an appellate court decision reopening the case despite the fraud because there was no mistake at the time of the execution of the agreement about the existence of the account. There may have been a shock later, after the settlement was executed, but at the time of the agreement there was no mistake.
If this case had come out differently, it could have led to major changes nationally (including in Pennsylvania) in the structure and usage of marriage settlement agreements. However, in New York, like in Pennsylvania, the principle remains unchanged: be very careful and certain about what you put into marriage settlement agreements. Courts want to ensure the finality of divorce, and to allow both parties to move on with certainty. That means that they are very reluctant to reopen a divorce case for the purpose of altering a marriage settlement agreement. This holds true even when unforeseen circumstances occur after it is executed.
Our experienced Washington County divorce attorneys have prepared many marriage settlement agreements, and will make sure that yours will get you everything that you are entitled to receive the first time. Contact us today!