So you have decided to get married. A question you may be asking yourself is whether you should get a prenuptial agreement prior to your wedding.
I’m a divorce and family law lawyer in Venice, Florida. As part of my law practice I help clients negotiate and prepare prenuptial agreements (sometimes referred to as “antenuptial agreements”).
I’m writing this article with the goal of helping you determine whether this is an exercise worth doing, and key considerations when deciding to move forward with a prenuptial agreement. I will also be sharing my philosophy and approach to prenuptial agreements in general.
Who Should Get a Prenup?
People don’t always realize this, but when you get married, you are entering into a prenuptial agreement, even if you literally are not signing a contract. If you don’t have prenuptial agreement and then subsequently divorce in the State of Florida, then the law in the State of Florida will determine what your legal rights are in the divorce. That typically includes things like dividing property (we call this “equitable distribution”), and possibly alimony (or “spousal support”) depending on the facts of your specific situation. When I meet with divorce clients for the first time, and go over the issues of equitable distribution and alimony, I’ll often have client’s tell me that the laws in Florida are not fair. I’ll ask in response whether they had entered into a prenuptial agreement prior to getting married, and they will sheepishly say “no”.
My point is that a prenuptial agreement is an opportunity for a marrying couple to predetermine what they believe is fair in the event their marriage subsequently fails. Otherwise you are stuck with “the law of the land” in the particular jurisdiction that you happen to be subject to at the time of your divorce. And while no one gets married with the intention of getting divorced, we all know that divorces still happen. Depending on where you go for your statistics, it appears that anywhere from 40-50% of all marriages end in divorce.
So the prenuptial agreement is an opportunity for marrying couples to sit down and have a mature dialogue about how they will handle legal issues in the event their marriage doesn’t work out. The goal isn’t to torture the parties about the horrors of divorce prior to their wedding, rather, it’s an opportunity to empower a couple. This is a process that involves full financial disclosure, and it will often facilitate a dialogue about how the parties intend to combine their financial lives after the marriage. Preparing a prenuptial agreement is building a foundation for an adult relationship, where the parties can come in on an equal basis, and an equal playing field, so they can go forward together as partners in life.
This isn’t always an easy or particularly romantic conversation, but in my experience it’s better to do this when you are in love, rather than negotiating financial terms “in hate” after a divorce lawsuit has been filed and the relationship between the parties has broken down. Sometimes parties can divorce amicably even without a prenuptial agreement, but even under the best of circumstances it’s an extraordinarily difficult time on someone’s life. A good prenuptial agreement will streamline the process and provide certainty in otherwise uncertain times.
To answer the question more specifically, I think there are some situations where it is especially important to have prenuptial agreement in place. Here are a few examples:
- Second marriages;
- Marriages later in life where the parties have already accumulated assets;
- Marriages where the parties have children from prior relationships that they want to provide for in their estate plans;
- Marriages where one or both of the parties owns a business;
- Marriages where one or both of the parties has the ability to develop significant wealth or income.
- Marriages where there is a significant disparity in assets and income between the parties.
These are common examples of when it makes the most sense to enter into a prenuptial agreement prior to marriage, but really, it’s something that any couple could benefit from.
Drafting Prenuptial Agreements that Work
I have clients often ask whether a prenuptial agreement is enforceable in Florida. Do they work? Yes, but they aren’t bulletproof. We have all seen the headlines of the celebrity divorce where there is a prenuptial agreement that is being challenged. Prenuptial agreements by their very nature are often subject to scrutiny, given that a divorce is often the single largest financial transaction in someone’s life. When the stakes are that high, these kinds of agreements can be challenged. Here are some key considerations for keeping your prenuptial agreement enforceable.
Financial Disclosure
Due diligence plays a critical role in preparing an enforceable prenuptial agreement. Generally, Florida law requires financial disclosure for prenups, and it’s something I insist on for any prenuptial agreement that I’m preparing. At a minimum these are schedules that are attached as exhibits to the agreement listing each party’s assets, liabilities, and incomes, but depending on the situation we may also exchange tax returns, statements, appraisals, etc.
It’s important that these disclosures are accurate. You must disclose to the other party what your assets are and what they are worth. That’s because the State of Florida generally has a public policy that marital agreements must be based on full and fair financial disclosure. That also makes intuitive sense, as you generally don’t want to “go in blind” signing a prenuptial contract with zero knowledge of your fiance’s financial situation is.
Attorneys For Both Parties
I also believe it’s important that both parties have legal counsel when negotiating prenuptial agreements. This is a way to reduce the likelihood of a spouse challenging the agreement down the line based on not having representation. And given the potential significance of these kinds of agreements, it makes total sense to do this. Prenuptial agreements often deviate substantially from Florida Law. It’s important to know what’s in the contract, and what’s not in the contact as well, so both parties have a full understanding of the consequences of the agreement before signing it.
Clients sometimes push back on the idea of their spouse also needing a lawyer, but the whole point of going through this exercise of preparing a prenuptial agreement is for the agreement to hold up in court. Not having lawyers on both sides could jeopardize the integrity of the document.
Negotiating and Signing Well in Advance of the Wedding
It’s also very important that a prenuptial agreement is discussed and negotiated well in advance of the actual wedding. That’s to avoid a challenge of duress.
Imagine this: it’s the night before your wedding. All your family and friends are in town, or maybe you have all flown somewhere for an amazing destination wedding. Regardless, everyone has spent a lot of time and money to get here, and is excited to celebrate your big day. But the night before the wedding your fiance approaches you with a prenuptial agreement and tells you that if you don’t sign it, the wedding is off. What do you do? Sign this complicated contract or tell your family and closest friends that the wedding has been cancelled?
This is admittedly an extreme example, but the point is you don’t want to be putting together a prenuptial agreement at the last minute. At the very least it can have a “chilling effect” on the aura surrounding your big day, but it could also be a case of duress, which is a basis to potentially set aside premarital contracts in the state of Florida.
That’s why you want to start working on your prenuptial agreement months in advance of your wedding. It allows everyone plenty of time to give the terms mature consideration, to get legal advice, to go through the due diligence, and to ultimately jump in to the marriage with both eyes open, empowered and confident about beginning their financial lives together as a married couple.
So starting the process early is a must. I occasionally have potential clients call, where they are getting married within a couple weeks and want me to prepare a prenup. At that point it’s too late. Reach out several months in advance at a minimum, or be flexible with your wedding date.
Issues to Decide in Your Prenuptial Agreement
Prenuptial agreements typically cover 2 major life events: death and divorce. I’ll briefly touch on both of these scenarios.
Prenups in the Event of Divorce
This is probably the more obvious reason why people get prenuptial agreements. Prenups cover 2 major issues in the event of divorce: identifying what property is marital or non-marital, and alimony.
Florida is an equitable distribution state. That means that marital assets are generally divided equally. Premarital and non-marital assets generally go to the party that had them prior to marriage, but the burden of proving an asset is non-marital is on the person that claims the asset is non-marital. Premarital assets are generally described as assets you had prior to marriage (and non-marital assets include gifts and inheritances to just one of the spouses during a marriage), but Florida has broad language regarding marital assets, so if you aren’t careful, those premarital assets can become commingled, and then if you subsequently divorce it can be potentially difficult to prove an asset is premarital.
Also, earned income during a marriage is generally considered a marital asset, so if you take marital money and mix it with non-marital money it creates a host of potential problems and pitfalls in a divorce.
I have run into commingling issues countless times as a divorce lawyer. These can be very difficult and messy issues to resolve in a divorce.
This is why it’s incredibly important to disclose all premarital assets specifically, and define what a marital asset is within the prenuptial agreement. That way everyone clearly knows what constitutes a marital and non-marital asset, and if there is some sort of commingling, it’s done consciously, and not by mistake. Again, it’s a chance for the parties to pre-determine what they believe is “fair”. I think most people generally agree that keeping their pre-marital property as their separate property in the event of a divorce is fair, but if the property gets mixed with marital assets it can become impossible to “unscramble the egg”.
You also have the issue of alimony or spousal support to consider. This issue is especially important when you have a significant disparity in incomes. And sometimes, one spouse will put their career on the back burner to assume primary responsibilities raising children or taking care of the home. In situations like this, it becomes critical to handle this issue in an equitable and dignified way.
Divorce Issues that Cannot Be Addressed in a Prenuptial Agreement
There are a number of ways to address the issue of alimony with a prenuptial agreement. The solution can be to fund an investment account for the benefit of the non-monied spouse during the marriage, or to agree to a stated amount of money in the event of a divorce or marriage ending event. Often these amounts will go up over time with the duration of the marriage. Or sometimes the parties aren’t waiving alimony in the prenuptial agreement. Each situation is unique and it’s important to approach the issue thoughtfully so a solution can be tailored to each couple.
I want to put a quick word in on a few things that can’t be addressed in a prenuptial agreement. These are mostly child related issues. If the parties divorce and they have minor children, then things like parenting plans, parental responsibility and decision making, and child support cannot be contracted around or waived in a prenuptial agreement. These issues must be addressed within divorce proceedings. Temporary alimony and attorney’s fees are two other issues that generally cannot be waived in a Florida prenuptial agreement.
Prenups in the Event of Death
While it’s entirely possible that you will marry and never get divorce, it’s certain that one day we will all die. And being in Venice, I am obviously working with a lot of clients that are older, often with adult children from prior relationships. In those cases the estate planning component of a prenuptial agreement is as important or more important than the divorce sections of the document.
That’s because Florida law provides a surviving spouse with the right to inherit, even if they aren’t in the other spouse’s estate plan. In Florida we have homestead laws that give surviving spouses one half interest or a life estate in the family homestead (even if the surviving spouse is not on the deed to the property). We also have elective share, which entitles the surviving spouse to 30% of the “elective estate”. These laws are in place to provide a safety net for widows, but they can create unintended consequences for well meaning couples with blended families that get married later in life.
So the question becomes, how do we handle the issues of inheritance?
Again, it’s not a one size fits all scenario. On one hand you can have a prenuptial agreement with a full estate waiver. That means the surviving spouse will not inherit from the other unless specifically provided for in a will, trust, or as the named beneficiary on an account. On the other hand you can “waive the estate waiver” so that the surviving spouse gets the full benefit of homestead, elective share, etc. And then you can have something in between. This can be a situation where the surviving spouse is the beneficiary of a specific asset, or they get a percentage of the surviving spouses’ estate. That percentage can potentially change over time depending on the length of the marriage.
There are a number of ways to provide for a surviving spouse in a prenup. The key is to have an open dialogue and explore this fully, with the goal of using creative deal making to arrive at terms that are acceptable for everyone involved.
Prenuptial Agreements in Florida – Final Thoughts
I hope this article has helped give you a better understanding as to why people enter into prenuptial agreements, and how lawyers add value to the process of preparing a prenuptial agreement by creating a document that is designed to hold up and is tailored to your specific situation.
We also went over the kinds of issues that these agreements can address, and how the most common issues are addressed. These are just some of the considerations when preparing a prenuptial agreement, and this article was written for educational purposes only, and not as specific legal advice.
Finally, this article was also a way for you to get a feel for how I approach these kinds of documents and my philosophy towards them. I routinely assist clients by preparing prenuptial agreements. My office is in Venice, Florida, so most of my clients are in Sarasota County, but I also serve clients in Charlotte and Manatee County.
If you would like to contact me for a confidential consultation about preparing or reviewing a prenuptial agreement for you, then please feel free to contact me by phone (941-882-4367) or email (dan@danpolicastrolaw.com). Thank you for taking the time to read this article.
