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Ex-husband wants divorce re-settlement; blames Bernie Madoff

A New York ex-husband is arguing for a new divorce settlement five years after he and his wife split and is blaming financial fraudster Bernie Madoff. The husband and his ex-wife completed asset division as part of their 2006 divorce. He now wants to renegotiate that settlement, saying he lost a lot of money in the Madoff Ponzi scheme.

When the man and his wife decided to end their marriage, the asset split included a decision about the couple's investment with since-convicted Madoff. At the time, the husband chose to leave his half of the investment with Madoff and the wife decided to cash out. Two years later, the ex-wife got a call.

Her ex-husband wanted to rewrite their divorce settlement, saying the couple had made a "mutual mistake" by investing in Madoff's accounts. The former wife denied that her ex's losses were her problem.

The legal argument surrounds a precedent that voids "mutual mistake" contracts. The ex-husband says the couple invested together, while still married, and that the mistake should be shared through a revised divorce settlement.

Legal experts say, although the courts are considering the case, it is highly unlikely that something as traditionally rigid as a divorce decree would be revised. In the past, courts have overwhelmingly ruled that a divorce agreement was final and unable to be modified.

One tax professor for the Thomas Jefferson School of Law said he doesn't see the ex-husband succeeding in court, adding that the lawyer is working to recoup old losses from the "wisdom of his ex-wife's choices." It will be interesting to see how the courts rule on this divorce case.

Source: AdvisorOne, "Madoff Victim Wants Divorce 'Do-Over,'" John Sullivan, 2 June 2011

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