In Maryland, it is very challenging to set aside a Marital Settlement Agreement, commonly also known as a Separation Agreement or Separation and Property Settlement Agreement (hereinafter referred to as “Separation Agreement”). While there are numerous ways to attack a Maryland Separation Agreement, the likelihood of success is low, primarily because under Maryland law Separation Agreements are presumptively valid. The law presumes that every adult has the capacity to enter into a valid contract, and a Separation Agreement is considered a contract in Maryland.
The spouse attacking the Separation Agreement has the burden of proving that it should be set aside. If the Separation Agreement was obtained by fraud, duress, undue influence, or collusion, it will not be enforceable. Also, if the terms of the Separation Agreement shock the conscience of the court, the court may refuse to enforce it or may limit the application of any unconscionable terms.
To establish fraud, the attacking spouse must prove that the other spouse either concealed or misrepresented a material fact in order to induce him or her to enter into the Separation Agreement. Duress, coercion, and undue influence are proven by showing that the spouse attacking the Separation Agreement was compelled by the other spouse to do something that he or she wouldn’t otherwise have done.
If a spouse can convince the court that, due to force, threats, or coercive promises, he or she was unable to exert his or her free will with regard to consenting to the terms of the Separation Agreement, then he or she may be able to establish duress, coercion, or undue influence and have the Separation Agreement set aside. It is likely that the only evidence of these types of wrongdoing is the attacking spouse’s testimony, which probably will be contradicted by the other spouse’s testimony.
Another attack to a Maryland Separation Agreement is that its terms are unconscionable. In other words, the Separation Agreement is shockingly one-sided. For example, Maryland appellate courts have found separation agreements inequitable where one spouse received less than two percent of the total assets.
The attacking spouse also may claim incompetence or lack of capacity to contract. In a recent Maryland Court of Special Appeals case, the wife claimed she was incompetent based on her mental distress and her long history of bi-polar disorder. Ultimately, the Court found no evidence of permanent incompetence or incompetence at the time the wife signed the Separation Agreement. Because she had maintained employment, controlled her own checking account, made her own car payments, and entered into a contract to purchase real property, the Court deemed her competent to enter into the Maryland Separation Agreement.
If the attacking spouse can establish the existence of a “confidential relationship” between the spouses, then the burden shifts to the spouse who seeks enforcement of the Separation Agreement to establish its fairness and reasonableness. A confidential relationship occurs when one person reasonably expects the other to act in his or her best interests. The existence of a confidential relationship imposes a duty on the relied upon spouse to act fairly.
Establishing a confidential relationship will depend upon the facts. Some factors considered in determining whether a confidential relationship exists are age, intelligence, mental condition, education, business acumen, health, and degree of dependence on the other spouse. If the spouse who seeks to set aside the Maryland Separation Agreement is vulnerable, easily manipulated, poorly educated, unsophisticated, trusting, or in poor physical or mental health, there may be a greater likelihood of establishing a confidential relationship. There may be a greater chance that a confidential relationship exists if the attacking spouse has no (or little) familiarity with the marital assets, investments, expenses, and other financial matters.
Conversely, if the attacking spouse sought even minor changes to the Separation Agreement before it was signed, that action likely decreases the chances that a court will find the existence of a confidential relationship because that spouse demonstrated a lack of reliance on the other spouse to do what is fair by negotiating terms. If a confidential relationship is established, that merely shifts the burden to the relied upon spouse to prove the fairness and reasonableness of the Separation Agreement. No reported Maryland case has held that the existence of a confidential relationship alone is sufficient to set aside a Maryland Separation Agreement.
Furthermore, the spouse seeking to invalidate a Maryland Separation Agreement may have waived that right by accepting benefits under it. Once the spouse suspects a basis to set aside the Separation Agreement, he or she must stop accepting benefits under the Separation Agreement in order to improve the likelihood of setting it aside.
Contact our Maryland divorce lawyers (301-309-9002; firstname.lastname@example.org) for an appointment if you are seeking experienced representation for reaching a Separation Agreement or an aggressive Maryland lawyer to represent you in your divorce case.