Ohio couples going through a divorce know that property division can be tricky. In some cases, determining the value of assets can be a challenge due to fluctuating markets or the timing of real estate assessments. Value determination, however, is one of the most important aspects of property division.
Once reached, a divorce settlement is difficult to change. One of the few reasons to alter a settlement for property distribution is mutual mistake, according to a recent report. The mistake must be substantial, must have existed at the time the agreement was entered into, and both parties must have been unaware of the mistake.
In a recent New York case that might be of interest to Ohio couples negotiating a property division settlement, the court found that an agreement could not be altered. In that case, the husband had requested that he be refunded a substantial amount of the property that was distributed to his ex-wife during their divorce. The couple’s marital assets included large sums that were invested with infamous Ponzi-scheme orchestrator, Bernie Madoff.
At the time of the divorce agreement, the fund was valued at $5.4 million. The agreement for property division split the amount nearly equally between the spouses, according to reports. The wife took her half in cash, but the husband left his money with Madoff.
He sought to have his ex-wife repay the $2.7 million of the property division funds she received from the divorce settlement, arguing that they had made a mutual mistake in believing the value was $5.4 million when it was, in fact, “nonexistent” due to Madoff’s fraud. The court denied his request, stating that the value was appropriately determined at the time of the settlement and that the husband could have liquidated his shares prior to the discovery of the Ponzi scheme. The court ruled that the settlement should remain intact and that no mistake had occurred during the property division negotiations.
Source: The Wall Street Journal, “NY’s top court refuses to undo divorce settlement,” April 3, 2012