It is ironic that when a couple forms a business partnership, they typically prepare a written contract that specifies the contributions of each party to the partnership as well as how the business will be wound down if the partnership dissolves. When a couple gets married, it is a partnership involving a far more fundamental blending of the lives of each partner. Yet many people enter into this more intense partnership without taking the financial precautions that are almost universal when forming a business partnership. While this may be based on notions that a premarital agreement is unromantic or reflects a pessimistic outlook on one’s marriage, the reality is that a premarital agreement in many situations is nothing more than sound financial planning when the divorce rate in the U.S. is around fifty percent.
Marital Stability through Prenuptial Financial Planning
While no one enters into a marriage believing that the marriage will end in a divorce, the possibility of divorce cannot be overlooked. The possibility that a marriage will end in divorce is no better in Florida, which has 11 of the fifty cities with the greatest number of divorces in the United States. What many people do not recognize is that a prenuptial agreement can actually strengthen a marriage by making the consequences of ending the marriage clear. There are certain situations where a prenuptial agreement is particularly appropriate:
- Either party owns a business
- There is a substantial disparity in income between the parties
- One party is an heir to a substantial inheritance
- The parties have substantially different net worths
- Either party has children from a prior relationship, where inheritance disputes may arise
- The parties simply want to keep their finances separate
While a prenuptial agreement can be an effective way to provide stability throughout a couple’s marriage or financial predictability in the event of a divorce, it is very important to be aware of the potential pitfalls of such an approach. Anyone considering entering into a prenuptial agreement should seek legal advice regarding his or her rights and obligations with regard to the successful execution of a prenuptial agreement.
A premarital agreement is a written agreement or contract between prospective spouses that becomes effective upon marriage. In Florida, the formalities, content, and enforceability of a premarital agreement are outlined in section 61.079, Florida Statutes.
During a contested divorce involving a premarital agreement, the court will examine the content of the agreement and the circumstances at the time the parties entered into the agreement. If the court finds that the agreement was executed based on fraud, duress, or undue influence, then the prenuptial agreement is not enforceable.
Furthermore, if the premarital agreement includes a provision that limits or eliminates spousal support and that provision creates a situation whereby that spouse would qualify for public assistance, then the court may require the other party to provide support to the extent necessary for the receiving spouse to avoid being eligible for public assistance.
The danger of entering into a prenuptial agreement without the advice and assistance of legal counsel should be obvious. The sacrifices made to obtain the agreement embodied in a prenuptial agreement can suddenly be for naught if a court redistributes the marital property or finds the agreement is otherwise unenforceable. Our office has drafted many prenuptial agreements on behalf of clients. Several clients were even previously represented by our office in their divorce cases.
Financial Predictability in Worst-Case Scenarios
Many individuals make the mistake of trying to draft such agreements without the advice of an experienced family / matrimonial law attorney. Common mistakes include trying to waive or limit child support, which is illegal and will not be enforced by a court. A complete waiver of alimony can also be problematic under certain situations, so it is important to understand the circumstances under which a circuit court in Florida may not enforce such a provision. Mr. Cunha and his legal team can analyze the terms of your proposed prenuptial agreement and advise you of potential problems as well as draft the agreement so that it embodies your intentions in an enforceable way.