There is a general misconception that nuptial agreements (whether pre-nuptials or post-nuptials) only benefit parties with substantial assets. However, that is not the case. Anyone who is looking for ways to preserve their property, minimize post-death disputes and save on attorney’s fees in the event of a divorce would benefit from either a pre-nuptial or post-nuptial agreement. Nuptial agreements provide the parties with a peace of mind knowing what rights and responsibilities each party will have as a result of the marriage.
A nuptial agreement is a contract that provides for the disposition of the parties’ respective property upon divorce, death or other event, as specified in the agreement. Nuptial agreements also address the allocation of debt, waiver of inheritance rights, waiver of spousal support, tax planning, as well as the treatment of retirement funds, a family business/professional practice, and the post-marital appreciation of the pre-marital assets.
The agreement may contain general categories or it may contain a lengthy list that specifies in great detail the type of property that will be subject to the agreement and the parties’ rights thereto during the marriage as well as in the event of a divorce or death. Basically, the parties are free to address their rights with respect to both present and future property, whether it’s real, tangible personal or intangible personal property.
Although the agreement may address pretty much any type of property and may dispose of almost any type of right that the parties may otherwise have either prior to or as a result of the marital relationship, child support obligation and provisions concerning time-sharing may not be contracted away as such provisions are contrary to Florida’s public policy and will not be enforced, even if there is such language in the agreement.
As to the level of detail that a nuptial agreement must have to be enforceable, there is no bright-line rule on the matter as the level of detail generally depends on the parties themselves, their past experiences, their assets and their future financial objectives.
It is not unusual for couples to add a certain level of detail to their agreement to avoid perhaps past mistakes and ensure a happy, harmonious marriage. For example, there are couples out there who define each other’s day to day household duties by specifying who will be making the financial decisions, who will be handling the checkbook for the joint account, which credit cards will be used for marital purposes, what property and the circumstances when that certain piece of property may be used as a collateral for a loan, how much of each paycheck will each party deposit into the parties’ joint account, how the tax returns will be filed, which account will be used to pay for groceries, household bills, etc.
Specifically, when addressing Pre-Nuptial Agreements, Section 61.079 of the Florida Statutes provides as follows:
- “Premarital agreement” is an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage. Section 61.079(2)(a), Florida Statutes (2014).
- “Property” includes but is not limited to an interest, present or future, legal or equitable, vested or contingent, in real or personal property, tangible or intangible, including income and earnings, both active and passive. Section 61.079(2)(b), Florida Statutes (2014).
- A premarital agreement must be in writing and signed by both parties. Section 61.079(3), Florida Statutes (2014).
- An agreement may be challenged based on: lack of knowledge, fraud, duress, coercion, misrepresentation, an allegation that certain terms are in contravention of public policy, such as where there is a complete child support waiver. Section 61.079(7), Florida Statutes (2014).
- The parties may amend, revoke or abandon their written agreement but only by a written agreement signed by both parties. Section 61.079(6), Florida Statutes (2014).
Prenuptial agreements are also governed by the Florida Probate Code when the marriage is terminated by death of one of the spouses rather than by a dissolution of marriage action. If the prenuptial agreement addresses disposition of property in the event of death, the agreement must also comply with the Florida Probate Code and, in particular, with Sections 732.701 and 732.702 of the Florida Statutes (2014). Specifically, if the nuptial agreement contains testamentary provisions, the agreement must be in writing and signed by the agreeing party in the presence of two attesting witnesses. See Section 732.701(2), Florida Statutes (2014).
This would be the case where the agreement calls for a waiver of inheritance rights as well as of rights to homestead, exempt property as well as to family allowance that a surviving spouse would generally be entitled to in the absence of anything to the contrary in the nuptial agreement.
Also, although disclosure is not required in cases of prenuptial agreements, it is always prudent for each party to provide each other with full and fair financial disclosure in order to reduce the likelihood of a challenge and, in case of a challenge, to have such financial disclosure serve to ensure enforceability of the agreement. See Section 732.702(2), Florida Statutes (2014).
On the issue of Post-Nuptial Agreements, apart from being an agreement executed while the parties are already married, they are quite similar to prenuptial agreements. Both prenuptial and postnuptial agreements accomplish the same goal – the preservation of assets for the designated beneficiaries.
However, postnuptial agreements do have a few additional requirements to ensure enforceability. In cases of postnuptial agreements, the parties are also required to make a full and fair disclosure if there is a waiver of spousal rights that generally exist on the death of the other spouse. In other words, when one party agrees to relinquish rights that they would otherwise be entitled to pursuant to Florida’s intestacy laws or will provisions prior to such waiver, there must be a fair and complete disclosure of all the assets. See Section 732.702(2), Florida Statutes (2014).
A post-nuptial agreement must also be signed in the presence of two subscribing witnesses and may not be used when divorce is contemplated or is imminent.
Although there is no specific requirement for both parties to obtain separate counsel when contemplating either a pre or post nuptial agreement, it is best that separate counsel is obtained to shield the agreement from claims of duress or undue influence. Generally, there will be one attorney who will prepare the initial draft and the other attorney will review the draft and advise his or her client accordingly. Both parties should independently seek out and retain their counsel, again, all in order to ensure that neither party can set the agreement aside based on a claim of duress or undue influence.
Finally, it is prudent to keep in mind how nuptial agreements are not some evil contraptions developed for wealthy individuals to keep their wealth all to themselves but are instead agreements intended to promote and preserve a marriage. They are safety nets intended to provide that extra assurance on how the marriage is based on love rather than wealth.
Should the marriage fail in spite of having a valid nuptial agreement in place, these nuptial agreements generally allow the parties to resolve all of their issues quickly, without having to resort to costly and protracted litigation. Such quick resolution enables the parties to heal faster and move on without losing their financial security.