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In Mergner v. Mergner (2025), the court ruled that a wife who accepted benefits from a trust could not later invalidate the agreement she signed, which waived her right to additional claims against her husband’s assets. This case highlights how contract law prevents parties from acting unfairly or dishonestly after benefiting from an agreement.In many ways, contracts are needed because people don’t always naturally act in a “reasonable” manner. A contract is essentially an exchange of promises which is considered binding or enforceable by a court. If we pause and think, we might begin to wonder whether these instruments would be needed at all if people were simply wired altogether differently. The truth, of course, is that people tend not to act reasonably because they are often too preoccupied with their own interests and concerns, and this is where contracts and courts come into play. Contractual agreements are, in a sense, “buffers” which serve to control and work against some of our more or less “natural” impulses.
The case of Mergner v. Mergner (2025) shows us that contractual agreements are often needed to ensure that one party isn’t able to be excessively greedy or selfish. Moreover, this case shows us that Maryland contract law has established principles which work to ensure fairness and equity in all scenarios (at least ideally). Let’s examine this case in detail.
Facts of the Case
The husband in this case was in his early 60s when the couple married, and the wife was in her 50s. The husband was a highly successful financial advisor, while the wife was less financially successful. The marriage took place in 1996, and no prenuptial agreement was signed.
Later, when the husband turned 75, the couple hired an estate planning attorney to assist with the creation of two revocable trusts. As part of the general estate plan, the husband and wife agreed that, in the event that the husband passed away prior to the wife, the wife would then receive a trust which contained 50% of the total trust assets, or 5 million dollars, whichever is greater.
Then, 4 years later, the husband established a new (irrevocable) trust which was designed to provide the wife with additional income. The wife received regular monthly distributions from this trust; over the course of the next 5 and a half years, the wife received nearly $450,000 in distributions from this irrevocable trust. As part of this agreement to set up a new trust, the husband required the wife to sign something which stated she would give up her rights to assert additional claims against his assets in the event of either his death or divorce. In other words, because the wife now had access to new income via the irrevocable trust, she was going to essentially abandon the previous agreement pertaining to the two revocable trusts (and the assets therein). This was all put down in a settlement agreement which was signed in 2016.
Although the wife began accepting the distributions, and ultimately received close to $450,000, she still attempted to declare the 2016 agreement void. The husband argued that, because she had accepted the distributions, the wife was basically “estopped” from challenging the property agreement because she had already enjoyed the benefits of that agreement.
Ruling & Discussion
In its decision, the court cited various pieces of authority, including persuasive authority from other jurisdictions beyond the State of Maryland. The court essentially concurred with the husband’s argument. When someone acts they way the wife acted – i.e. accepts the benefits of a given contractual agreement – that person may be effectively “estopped” or prevented from turning around and challenging that same agreement. Again, as we pointed out in our introduction, we can how contract law is basically functioning as a buffer against unchecked self-interest. In this scenario, the wife had literally collected nearly half a million dollars in distributions, but still wanted to invalidate the 2016 agreement and retain the ability to acquire more from the husband’s estate. This is precisely what the law is designed to prevent.
Contact the Murphy Law Firm for More Information
If readers need more information on settlement agreements, prenuptial agreements, or any other aspect of the divorce process, contact one of the family law attorneys at the Murphy Law Firm today by calling 240-219-5243.
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