Divorce settlement is reopened because of a mistake

When a couple agrees to a divorce settlement, it’s generally final. But in some instances, a judge might allow a couple to reopen it and change the terms if they later realize they made an honest mistake - such as that their property wasn’t worth as much as they thought.

For example, when a wealthy New York lawyer and his wife divorced, they agreed to split their property, which included a $5.4 million investment account, right down the middle. Unfortunately, the account was invested with the notorious Wall Street fraudster Bernard Madoff.

Madoff’s ponzi scheme wasn’t revealed until after the husband had already paid the wife $6.6 million, including her share of the investment account, which was actually worthless.

The wife argued that she was still entitled to the full amount of the settlement. But a New York appeals court agreed with the husband that the settlement should be set aside due to a “mutual mistake.”