Navigating Prenups in Florida
A prenuptial agreement, also commonly referred to as a premarital agreement or a marriage contract, is a written contract between two people before they are legally married. The general purpose of these contracts is to set forth the financial rights and responsibilities of each party in the event the marriage does not succeed. Prenuptial agreements are designed to avoid lengthy litigation over issues of property, finances, spousal support, attorney’s fees, and more in the unfortunate event of divorce. Prenuptial agreements are tailored specifically to suit your particular needs and protection. Usually, we recommend that the parties enter into a prenuptial agreement in the event one or both of the parties have their own children or business(es) which they would like to be protected in the event of divorce, such as an inheritance or family business. The law governing prenuptial agreements in Florida is found in Chapter 61.079 , Florida Statutes. Florida law has certain requirements to bind a divorcing couple. Those requirements include the following: A prenuptial agreement is generally effective upon the effective date of the parties’ marriage. This means that the agreement will survive any subsequent file date of divorce and is generally not revocable unless the parties agree otherwise in writing. The terms of the agreement are enforceable by Florida Courts. Florida law generally views prenuptial agreements as valid contracts between the parties. Remember, a prenuptial agreement may be legally enforceable in the event of divorce. That is why it is vitally important to contact an experienced attorney prior to entering into a prenuptial agreement. An experienced attorney can help ensure that the agreement is valid and that all procedural requirements are met. Florida Courts require certain disclosures prior to entering into the agreement, such as the following: If you plan to get married and think you may need a prenuptial agreement, do not delay. It is important to protect yourself ahead of time so that you do not lose the ability to contest the validity of a prenuptial agreement. Even if you think you may have the ability to make changes to a prenuptial agreement once it has been executed, you should consult with an experienced attorney to ensure you preserve your rights.
Legal Prerequisites to Creating a Florida Prenup
Not every written agreement, however, satisfies Florida’s legal requirements. To be enforceable, the agreement must be in writing and signed by both parties, both before a notary public. Florida Statutes Section 732.703. In addition, the agreement must be entered into voluntarily. Id. A prenuptial agreement may be invalidated if it is not entered into voluntarily, or if one party did not or could not make a rational and reasonable disclosure of his or her financial status. Id.
What to Do Before Preparing a Florida Prenup
Even before beginning the drafting of a premarital agreement, you should enter into a dialogue with your prospective spouse about some preliminary issues. …
First, you should be prepared to discuss your reasons for wanting a prenuptial agreement. Common goals in Florida are:
Next, you should have a handle on your own finances. This means creating a summary of other property and income, as well as the sources of credit. It also means preparing any documentation, including tax returns, bank statements, and like documents.
Third, you should engage the services of an attorney. Each party should have one to review the agreement with them. Further, each should be represented – not just conference with the same lawyer, nor just consultation. …
However, in rare circumstances, you may be represented by the same lawyer. If this is the case, it is imperative that certain information be disclosed by the lawyer in writing to ensure full FDUTPA compliance. Additionally, neither the mediator nor the lawyer can advise either party to file for divorce, or to file first.
Finally (and again, this may be handled by your lawyer), you should be prepared to disclose all income and assets and debts, no matter what their value. The reason behind this requirement is to help determine agreement language that will be enforceable.
So, in short, have a heart-to-heart with your intended regarding your goals. Then gather up and complete your financial documentation before conferring with your lawyer.
Preparing the Prenup
Once the decision to obtain a pre-nuptial agreement has been made, the next logical step is to draft the agreement. It should be discussed and agreed upon what the agreement will contain. Generally, there are just a few areas that require special attention. For example, both parties will want to waive their rights in the event the other dies during the marriage. The primary concern for most people is the rights of each party to the income and assets of the other during the marriage and in the event the marriage ends. This is generally a negotiation process, with each spouse’s position even more important than in a standard contract because of the emotional and financial commitments a marriage contains.
If the agreement is finalized during the marriage, in the event of a divorce, Florida statute requires that the agreement not be unconscionable. In a divorce, the family law judge will attempt to be as fair as possible, but the agreement will not necessarily be enforced if it is totally unfair. The agreement will likely be enforceable only in the following situations: Obviously, this is an abbreviated explanation about how a prenuptial agreement can affect a divorce. A skilled marital and family law attorney can explain this process completely in a no-obligation consultation.
It is critically important that the agreement be properly drafted. The specific terms must be properly articulated. The spouse waiving any rights in the estate of the other must be very clear. Also, in the event that property is to be jointly titled, the form of holding title must be clear so that there is no fight about whether the property is owned by both, one or if it is even a part of the divorce estate.
The agreement should be typed and signed. Notary forms should be used. If all of the above are completed, then the agreement is enforceable. After the agreement is signed, it must be voluntarily filed with the clerk of court before the appropriate marriage ceremony takes place.
Final Review of the Prenup
After you have reached an agreement with your partner on what you both want to be included in your prenup, it’s time to review that agreement. Keep in mind that you are looking for an agreement that is fair and balanced to both partners. One-sided agreements won’t hold up if there is a dispute later on. For a prenup to be valid, an impartial court must determine that it is fair to both you and your partner. This means that you and your partner should each have ample time for reflection between negotiating the terms of the agreement and signing it, so that neither party feels pressured. In order to protect against the possibility of this type of challenge, a full disclosure of assets and liabilities should first be made by both partners. If either partner is unsatisfied after reviewing the agreement, he or she has the right to take it to a judge before the wedding day. The judge will discuss the agreement with both parties so that the agreement is made fair to all parties . Once both parties are satisfied with the agreement, and it is written in clear terms that are understandable to both, the prenup can be signed. Once a prenuptial agreement is signed, it cannot go into effect until the marriage actually takes place. This means that no provisions can be enforced until the marriage is finalized. In Florida, prenuptial agreements are valid as long as the agreement was signed voluntarily, certain disclosures were made in connection with the agreement, as outlined above, and the agreement is conscionable (i.e. both parties understood what they were getting into). Making a prenuptial agreement is a big step for any couple, but if it is something you and your partner desire for your marriage, you shouldn’t let the process intimidate you. Making a prenuptial agreement can be a simple process, as long as both partners are aware of and understand all aspects of the agreement.
Recording and Storing a Florida Prenup
Once the prenuptial agreement has been signed, it must be filed with the appropriate authorities to ensure its validity. In Florida, prenuptial agreements do not have to be filed with the court until the parties file for divorce and seek to enforce the terms therein. However, if a prenuptial agreement is not filed, a presumption will arise when the divorce is filed that the prenuptial agreement is invalid.
Once the prenuptial agreement is signed, the parties should make multiple copies and immediately store the executed agreement in a safe and secure place. A prenuptial agreement is a legally binding contract; like any other legal document, it should be kept in a secure environment away from outside threats like fire and water damage.
Be sure to keep copies of the prenuptial agreement in a place that is private and secure. Depending upon your living arrangement, you may want to ask a family member to store the agreement for you if your spouse is not trustworthy. Alternatively, if you are worried about misplacing the prenuptial agreement, store a copy at your legal counsel’s office and with your financial advisor.
Pitfalls to Avoid
There are a number of common mistakes that people make when entering into a prenuptial agreement in Florida. A little advanced planning combined with the appropriate legal advice can save you from falling into these traps.
Basic Ownership Considerations
Too many couples simply agree to share ownership of assets acquired during the marriage. They may think it romantic, but they are actually losing their rights to property they could otherwise own. Couples may best enjoy the equity their painstakingly acquired separate assets by continuing to own these properties separately. Should the marriage fail it will cost them thousands to determine the respective ownership of the properties and they may be only able to divide the appreciations. If the owners would have simply kept the assets in their respective names without a change, they would have comfortably stayed out of the determination game. Some people find it more convenient to simply put the husband and wife’s names on the tough-to-divide real estate assets, but have a carefully drafted prenuptial setting forth specific values and other shared equity.
Marriage is a Business Relationship
As a loving spouse , you can certainly share and dedicate the larger portion of your personal property to your loved one. But this was how you felt before marriage. Marriage, off the bat, alters your relationship with an ongoing business partner. You need to protect yourself and your business assets. This is even true for young professionals who took great risks to achieve their entrepreneurial success. A prenuptial can define how our beloveds enhance the value of your already existing business and receives a high wage commensurate with her experience and training. Just as you need to protect the equity you brought to the marriage, you need to protect the wealth earned or appreciated during the marriage.
You’ve Got to Give to Get
Most assets owned by a spouse are subject to equitable distribution upon divorce unless they are clearly defined as non-marital in your prenuptial agreement. However, you should not view a prenuptial as holding your spouse hostage. The court may not consider the prenuptial agreement if the agreement violates public policy or whether unfair or inadequate. Your attorney should carefully draft a prenuptial that serves the harm of both parties but which will not be overturned by the court.