When one person has significant assets and marries another person who is not as well-off as he or she is, the parties may decide to create a prenuptial agreement before marrying. Similarly, if a person marries another and then discovers that the other person has significant personal debt from before the marriage, the two individuals may enter into a postnuptial agreement. In either case, these sorts of agreements are meant to serve three main purposes:
- Division of marital property: A pre- or postnuptial agreement can tell Florida courts how the couple wishes for their property to be divided in the event of a divorce. For instance, if one spouse is the owner of a rather lucrative business, a premarital agreement can be created so that, in the event of a divorce, he or she gets to keep that business as his or her own separate property.
- Protection of Children’s Property Rights: Some spouses have children from a former marriage or relationship that become part of a new family when those spouses remarry. A pre- or postnuptial agreement can protect the property rights of those children in the event the natural parent dies. In some cases, the surviving stepparent has used this tragic event to “disinherit” the other spouse’s natural children and keep them from obtaining property the deceased spouse wished them to have.
- Elimination or reduction of conflict: This purpose is a bit counterintuitive but it represents the greatest potential benefit of a prenup or postnup agreement. Two parties tend to feel more free to work on their relationship if the future threat of an asset battle is completely off the table.
When the parties divorce, if there is a valid pre- or postnuptial agreement, courts will follow the terms of the agreement. Depending on the terms of the agreement, this may leave one spouse in a particularly disadvantageous position. For instance, one spouse may find she will not be receiving nearly as much property as she previously had thought. In such circumstances, the disadvantaged spouse may try to set the agreement aside – that is, persuade the court to disregard the agreement and instead follow the established law on the division of property.
Prenuptial agreements (sometimes called premarital agreements) are agreements entered into by spouses before they are legally married. You may also see another name: antenuptial agreement. They determine how the existing and future property of the spouses will be divided, even before the spouses marry. There are certain requirements that must be met in order for a prenuptial agreement to be valid:
- Writing. First of all, the agreement must be made in writing. An oral agreement between spouses before marriage is not a valid prenuptial agreement and will not be enforced by the court.
- Signed by Both Parties. Next, the agreement must be signed by both parties to the marriage. An agreement will not be followed by a divorce judge if one or both signatures are not found on the agreement.
- Valid Marriage. The agreement becomes valid and enforceable once the parties marry. If the parties never marry or call off the wedding, the agreement never goes into effect. Likewise, if a marriage is determined to be void (if, for example, one of the parties is already married), there is no enforceable prenuptial agreement.
- Permissible Contents. There are only certain things that can be addressed with a prenuptial agreement. If a prenuptial agreement tries to address any other topic other than those below, that provision will not be enforced by the courts:
- Rights and obligations as to any of their property;
- Rights to use or control property;
- Disposition of property upon death, separation, dissolution, or upon the occurrence of some other event;
- Establishment, modification, waiver, or elimination of spousal support;
- The making of a will or other estate planning document to carry out the provisions of the prenuptial agreement;
- Ownership rights and disposition of life insurance policies;
- Choice of law governing the construction of the agreement (that is, which state’s law would be used to determine the contents of and enforce the agreement); and
- Other personal rights and obligations that do not violate public policy or violate a criminal law that imposes a criminal penalty.
A postnuptial (or postmarital) agreement is an agreement that spouses enter into after they have been married. The topics that can be covered by a postnuptial agreement are similar to those that are covered by prenuptial agreements. One of the requirements for a valid postnuptial agreement is that the parties make full financial disclosure to one another before entering into a postnuptial agreement. Full disclosure normally means a full and fair interchange of information regarding assets, liabilities, and amounts/sources of income.
Avoiding Trouble in the First Place
It is much easier to take precautions with pre- and postnuptial agreements as opposed to trying to undo a mistake at a later date. There are certain steps parties can take in order to help protect themselves against future problems involving pre- or postnuptial agreements:
Consider hiring an Ayo and Iken attorney. Even if one party believes they are capable of creating a pre- or postnuptial agreement, it does not hurt to, at the very least, have a second set of eyes look over the agreement. Small variations in the way a provision is worded can create headaches later. An attorney will also represent his or her client’s best interests, fighting to make sure provisions favorable to his or her client are included. Not only this, but one’s “homemade” agreement might not meet the requirements of Florida law and be disregarded. Finally, having an attorney look over a pre- or postnuptial agreement will allow the attorney to explain to the parties the effects of the various provisions.
Read before signing. A pre- or postnuptial agreement can affect the rights, obligations, and ownership rights for years to come. Parties should therefore read the document carefully, making sure they understand the various provisions of the agreement. If they have questions about the language or effect of any provisions, it would be a good idea to seek the help of an attorney or a trusted family member or friend. One should not rush to sign an agreement just because the other party may be in a hurry.
Do not sign if uncomfortable. Especially in the case of a premarital agreement, one party may have reservations about the agreement but not want to disappoint the other. Even so, a party should not sign an agreement if he or she has reservations about the agreement. Our attorneys can explain in simple language the potential benefits or risks of a proposed agreement.
Fighting a Prenuptial or Postnuptial Agreement
Florida law allows for pre- or postnuptial agreements to be set aside under certain circumstances. However, if none of the legally recognized situations apply, and the agreement is otherwise valid, courts will enforce the agreement. Some people think that “buyer’s remorse” is a good enough reason to set aside an agreement. Unfortunately, it is not. Courts will not protect or grant any relief to a party who simply made a “bad deal.” For instance, consider that Paul and Maria enter into a premarital agreement and marry thereafter. The premarital agreement is in writing, signed by both parties, and provides that, in the event they divorce, Paul agrees to pay Maria only $100 per month in spousal support, regardless of the financial situations of either of them at the time of the divorce. Suppose next that, five years later, Paul and Maria divorce. Paul at this time is bringing home $100,000 per year while Maria is only making about $40,000. Regardless of their incomes, the court will only award Maria $100 in spousal support per month, as that is the amount to which the parties agreed. Note that the same result would happen if Maria was making $100,000 and Paul was only making $40,000 – Paul would still be obligated to pay Maria $100 in spousal support per month. The court will not protect Paul or Maria from making a “bad deal.”
There are, however, several situations where a pre- or postnuptial agreement will be set aside or invalidated. These include:
- Agreement – If the parties agree, they can prepare a signed and written amendment or revocation of a prenuptial agreement. This can be done at any time.
- Voluntariness – If the ex-spouse against whom the premarital agreement is trying to be enforced did not sign the agreement voluntarily, then the agreement may be able to be set aside. If you were bribed or pressured into signing the agreement, chances are you may not have voluntarily signed the agreement. But you should be aware that a lack of “voluntariness” is difficult to prove. A possible scenario: If Paul offered Maria $1,000 in cash or a shiny 3-karat diamond ring in exchange for her signing the agreement without reading it, Maria may be able to have the agreement set aside.
- Fraud – If the other ex-spouse lied about his or her assets, deliberately concealed debt, or made some other statement that was later proven to be false, the fraud of the one spouse may prevent him or her from enforcing the agreement against the defrauded spouse. It would be fraud, for example, if Maria told Paul that the agreement she prepared for him to sign provided for $100 in monthly spousal support to her in the event of a divorce but, in actuality, the agreement said Paul would pay Maria $10,000 in monthly spousal support in the event of a divorce. Paul, believing and trusting Maria, signs the agreement without reading it. In this case, Maria misrepresented a material fact to Paul – that the agreement provided for $10,000 in monthly spousal support to her. Because of this misrepresentation, Paul may be able to avoid enforcement of this portion of the agreement.
- Duress – A person acts under duress when a person is pressured into performing a certain action by threats or acts of violence. The classic example is when an aggressor pressures another person into carrying out some act by threatening harm to that person or his or her family. If Paul told Maria, “You will sign this prenuptial agreement right now or I will leave right now, hunt your parents down and kill them,” and Maria (believing the threat) signs the prenuptial agreement, she may later have it set aside as being the product of duress.
- Coercion – If there was an improper amount of pressure to sign the agreement (similar to a lack of voluntariness), the agreement will be set aside. If Maria continuously told Paul he needed to sign the agreement right away without reading it, this might constitute improper coercion.
- Overreaching – A person overreaches when they take advantage of a situation through fraud or other unconscionable conduct. What constitutes “unconscionable conduct” is left for the courts to decide; however, behavior that shocks the conscience of an observer would likely meet most courts’ standards. If Paul hands Maria a prenuptial agreement while Maria is speaking with her family, learning that her mother has suddenly died in a tragic car wreck, Maria may alter be able to have the agreement set aside on grounds that Paul overreached in getting Maria to sign the agreement.
- Unreasonableness – In the case of a postnuptial agreement, a court can examine the situation of the married parties, taking into account their age, health, financial status, and education level. If the court finds the agreement is unfair or unreasonable, the court may set the agreement aside. For instance, if Paul earns $100,000 per year teaching at the local university and has a doctorate while his wife Maria is a homemaker with a high school education, a postnuptial agreement requiring Maria to pay Paul $200 per month in spousal support in the event of a divorce would likely be found to be unreasonable or unfair.
- Failure to Disclose – In both a pre-and postnuptial agreement, both parties have certain obligations to disclose the nature of their individual finances, including assets and indebtedness. During the creation of a prenuptial agreement, “fair and reasonable” disclosure is required. For a postnuptial agreement, the parties must make full disclosure of all their individual and marital assets. Failure to do so may result in the invalidation of the agreement. For instance, if Paul hides the fact that he owns a large business, or if Maria fails to mention that she incurred a great deal of debt during the marriage in hers and Paul’s name, the court may invalidate the agreement on the grounds that there was a failure to disclose.
The exact reasoning that may be used to fight a prenup or postnup depends on a complete analysis of the agreement and an examination of the prior interaction between the parties. The attorney examining the situation must be creative, think out-of-the-box, and be willing to explore every possible angle. The bottom line that that Florida courts start with the position that a prenup or postnup is enforceable and valid. The attorney’s job is to prove the agreement should be invalidated based on valid reasons. This can prove to be very difficult, and complex, and must be approached in a very intelligent manner.
The Law Firm of Ayo and Iken PLC can help. We have attorneys that have litigated complex situations involving prenuptial and postnuptial agreements. Call us to set up an in-depth analysis of your situation.