The Benefits – and Potential Pitfalls – of a Prenuptial Agreement
Kenneth C. Griffin is the founder and CEO of Chicago-based hedge fund Citadel LLC, which has around 16 billion dollars in assets under management. He’s been a periodic newsmaker since the early 2000s, when he was the second-youngest entrant on the Forbes 400 list. Mr. Griffin’s current wealth has been estimated at 3 billion dollars, give or take, and he’s begun to make headlines for some less pleasant reasons – his contentious divorce battle with wife of 11 years Anne Dias Griffin.
So far in the media coverage, the focus has been less on the push and pull domestic allegations common to many high-profile divorces, and more on the prenuptial agreement entered into by the couple. Ms. Dias Griffin is seeking to have it tossed, and the consensus appears to be that billions of dollars hangs in the balance.
Before we get into the black letter law, some context might be helpful. Mr. Griffin and Ms. Dias Griffin married in 2003. In that same year, when Mr. Griffin made his debut on the Forbes list, his net worth was estimated at 650 million. It’s thus safe to say that his worth grew considerably during the marriage. When a couple worth 3 billion dollars enters the process of ending a marriage, the ensuing litigation can resemble the breakup of a massive corporation. Think of it this way: Mr. Griffin’s estimated net worth is greater than the GDP of over 30 countries.
This is what pre-nups are for, and any matrimonial lawyer worth her retainer would have advised Mr. Griffin to at least consider one before the marriage. Without knowing the details or precise figures, one can imagine that Ms. Dias Griffin would be entitled to quite a bit more money sans pre-nup. As such, Ms. Dias Griffin is contesting the agreement by alleging duress. So, what is duress? Well, one thing to remember about pre-nups is that they are, at base, contracts, and all relevant laws of contract apply. To sign a contract “under duress” means that some sort of external pressure was applied to the signatory to the extent that their own free will was overcome. It is a procedural challenge to a contract, meaning that it isn’t the terms of the agreement that are unfair but rather the way in which the agreement came about.
Ms. Dias Griffin first claims that she was blindsided by the pre-nuptial agreement, as it was presented to her “shortly” before the wedding. Second, she claims that Mr. Griffin only revealed the extent of his assets to her three days before the wedding. Third, she claims she was then advised by a psychologist during a couples’ therapy session to sign the agreement – a psychologist who, unbeknownst to Ms. Dias Griffin, already counted Mr. Griffin individually as a patient.
In New York pre-nuptial agreement law, duress can be a difficult argument to make, and it typically requires something more than simply “springing” an agreement on a spouse right before a wedding, with a threat to cancel if they do not sign. It’s important that the less-monied spouse be advised of their right to seek independent legal counsel prior to signing, and Mr. Griffin is utilizing this exact argument, telling the court in his defense that his wife had three law firms review the agreement.
We’ll have more for you on the Griffin/Dias Griffin divorce as it becomes available, but for now the takeaway is this: pre-nuptial agreements can be hugely useful, but they are far from foolproof, and it’s important to hire an experienced and savvy attorney to handle the drafting and execution of these very specific sorts of contracts. Click on this link to find out more about New York pre-nuptial agreement law.