Schechter v. Schechter
88 Mass. App. Ct. 239 (2015)
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Rule of Law:
A prenuptial agreement is void ab initio if it is not fair and reasonable at the time of its execution, a determination that considers whether there was full financial disclosure, the fairness of the negotiation process, and whether the agreement's terms essentially strip the contesting party of substantially all marital interests.
Facts:
- Yan Schechter (the father), a successful real estate businessman with assets over $7 million, and Karina Schechter (the mother), who had assets of $2,500, began dating in 2001.
- In May 2002, the mother became pregnant with the couple's child.
- At the urging of his family, the father insisted on a prenuptial agreement before the marriage.
- Negotiations were brief and one-sided; the father rejected all proposals from the mother's attorney.
- On December 16, 2002, the father's attorney sent the final terms, stating the agreement needed to be signed the next day because the wedding was the following week.
- On December 18, 2002, while seven months pregnant, the mother signed the agreement.
- The agreement limited alimony to a lump sum of $5,000 per year of marriage and provided the mother a share only in the increase in equity, if any, of the marital home.
- The parties were married on December 22, 2002.
Procedural Posture:
- Karina Schechter (the mother) filed a complaint for divorce against Yan Schechter (the father) in the Massachusetts Probate and Family Court.
- The mother also filed a separate complaint seeking an abuse prevention order pursuant to G. L. c. 209A.
- The divorce and abuse prevention cases were consolidated for a trial that occurred over eighteen days.
- The trial court judge issued a judgment of divorce nisi, which found the prenuptial agreement invalid, awarded sole custody to the mother, suspended the father's visitation, and granted the mother attorney's fees.
- Yan Schechter, as appellant, appealed the judgment to the Appeals Court of Massachusetts against Karina Schechter, as appellee.
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Issue:
Does a prenuptial agreement fail to be 'fair and reasonable' at the time of its execution when it was negotiated under pressure with a lack of full financial disclosure, and its terms provide for minimal alimony and an illusory property division that effectively strips one spouse of substantially all marital interests?
Opinions:
Majority - Agnes, J.
Yes. A prenuptial agreement is not fair and reasonable at its execution when it combines a lack of full financial disclosure, coercive negotiation circumstances, and terms that strip one spouse of nearly all marital interests. The court applied the test from DeMatteo v. DeMatteo, which requires an examination of the agreement's fairness at the time of execution. Unlike in DeMatteo, the father failed to make a full and fair disclosure of his assets, particularly the ownership of his real estate company. Furthermore, the negotiation was brief, one-sided, and occurred under pressure just days before the wedding while the mother was pregnant. Finally, the meager provision for alimony and the illusory property division (giving the mother only a potential share in the increase of home equity, which the father could easily encumber) effectively stripped the mother of substantially all her marital interests. This combination of factors renders the agreement unfair, unreasonable, and therefore void from its inception.
Analysis:
This decision reaffirms and applies the principles from DeMatteo v. DeMatteo, clarifying that while a significant disparity in assets alone does not invalidate a prenuptial agreement, a combination of factors will. The court emphasized that procedural unfairness (duress, lack of disclosure) combined with substantively unconscionable terms renders an agreement void. This case serves as a key precedent for contesting prenuptial agreements where one party uses superior bargaining power and control over information to create a one-sided deal, reinforcing that a 'meaningful waiver' of marital rights requires both procedural and substantive fairness at the time of execution.
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