In New York, a Brooklyn Appellate Court panel has ruled that Peter Petrakis, a successful real estate investor, “fraudulently induced” his wife, Elizabeth, to sign a prenuptial agreement four days before their wedding. In a move that’s being hailed as precedent-setting, the prenup has now been thrown out and the couple’s divorce will proceed without the financial stipulations the document had outlined.
Peter, according to accusations, threatened to call off the couple’s wedding unless Elizabeth signed the prenuptial agreement his lawyers had drawn up. In her own testimony, Elizabeth claimed she felt bullied and coerced into signing because her dad had already paid $40,000 for a reception and she didn’t want him to lose out on so much money. Elizabeth also claimed that Peter verbally promised to “rip up” the prenup once they had kids. They eventually had three.
In response, Peter claimed he never made the promise and also denied any coercion on his part in getting Elizabeth to sign.
However, after examining arguments from both sides, the panel found Peter’s credibility to be “suspect” and ruled to strike the couple’s prenuptial agreement as invalid. The Appellate Court ruling now paves the way for Elizabeth to make claims on Peter’s estimated $20 million in metro area real estate holdings.
Why the Petrakis case is of note — and what is potentially groundbreaking about the ruling — is that it represents the first time a court (in NY) has accepted a verbal promise over what is written in a prenuptial agreement.
Could this have any impact on prenuptial agreements drawn up here in New Jersey? As Weinberger Divorce & Family Law Group divorce attorney Carmela Novi blogged about in September, according to current rules, the “justness” of a prenup is determined at the time the couple seeks their divorce, allowing for modifications in certain cases where health or financial circumstances have changed for spouses. This does open the door for spouses to challenge the prenup on other grounds at the time they divorce, though it’s unclear what kind of response the courts would have to the kind of “he said/she said” claims involved in the Petrakis case.
But something to keep your eye on? A new bill before the New Jersey legislature could drastically change how prenuptial agreements are evaluated and enforced in the state. If the bill is eventually passed, judges would be required to evaluate prenups for conscionability (fairness) as of the date they were executed, which may be decades before the divorce. This could potentially shut out claims such as those made by Elizabeth Petrakis if the document is found to be above board and agreed to long before the marriage ends.
Bottom line: Prenuptial agreements are becoming more and more common in today’s financially complex world. To create a document that lasts, be sure that you — and your spouse-to-be — seek legal counsel before agreeing to any premarital document.