What is a prenup agreement?
What is a prenuptial agreement? (a/k/a premarital agreement, prenup)
A prenuptial agreement, or premarital agreement as they are more commonly called in Florida, is an agreement between two existing people that sets parameters for their financial relationship should they later marry and then divorce. The prenuptial agreement itself is comprised of two parts: the contractual parameters and the disclosure . Prior to entering into an enforceable agreement, the parties need to full disclose ‘all contentious and noncontiguous forms of assets.’ A marriage is a contract and the pre-marital agreement merely controls the flow of money and property in the relationship. The agreement is not a sign of doom but a way to cut through the expected noise when parties marital property is in flux during a divorce.
Legal requirements in Florida
A prenuptial agreement must be in writing and signed by both parties. Under Florida law, it is not necessary for a prenuptial agreement to be witnessed by a third party, although this is certainly preferable. Florida Statutes offers some guidance regarding the following legal requirements:
- Disclosure: The parties to a prenup agreement must fully disclose their financial situations to each other before signing the contract. This is an element that cannot be overlooked or a prenuptial agreement may be rendered unenforceable.
- Consideration: Although entering into a prenuptial agreement is a legal promise to act in accordance with the terms of the contract, such promises are an insufficient form of consideration to allow the contract to be formed. It is more important that the parties agree to exchange something for the benefits set out in the agreement.
- Voluntary Agreement: Each spouse must enter into the prenuptial agreement willingly, without coercion or duress from the other party.
- Independent legal representation: Each party to a prenuptial agreement should seek independent legal representation to ensure that both parties understand the implications of signing the contract.
Common provisions in Florida prenups
There are a number of common provisions typically included in prenup agreements. One of the main purposes of Florida prenuptial agreements is to protect individual property, so property division clauses are common. There’s a presumption of fairness as long as the provision was entered into fairly and voluntarily and is not unjust and ridiculous. That means that your attorney can continue to include a clause stating that you are going to retain control and ownership over certain assets so that the provision is not beat up by the other side’s attorney later using the grounds of fraud, coercion, or unconscionable terms.
A second common provision in a prenup agreement is a spousal support clause that states either that no spousal support shall be awarded at all or that spousal support is capped at a certain amount or duration. In Florida, spousal support is not a 50/50 issue, so some trial judges will not give you that provision because he or she believes that they should the ability to look at the specific facts and circumstances when you ultimately get divorced to determine the issues. The Third District Court of Appeal has stated that a prenuptial agreement cannot extinguish all spousal rights because such an agreement would deprive the trial court of jurisdiction to remedy future need.
A third common provision is a waiver of the right to obtain alimony in the future. In Florida, the statute that addresses alimony is in accord with the Third District Court of Appeal’s view. Florida Statute 61.079 states that the parties may waive their right to permanent or periodic alimony, and the trial court must enforce such a provision. Florida Statute 61.079 further states that parties may limit the amount of alimony and set forth when it terminates in the event of a divorce.
The third type of common provision in Florida prenups is a waiver of an inheritance in the event one spouse dies. Tied in to that is a provision verifying the provision of full financial disclosures by both parties.
Other common provisions are a statement that each party waives spousal rights at death and the disclosure of estates and various waiver of rights of inheritance. The truth of the matter is that every prenup agreement is different because of differences in the personalities of the parties to the prenup.
Pros and cons of a prenup in Florida
In Florida, the decision to have a premarital agreement, or prenup, is increasingly common among couples who want to clearly define how their assets will be managed in the event of a divorce. A prenuptial agreement offers specific benefits for each spouse by providing financial stability, eliminating uncertainty, as well as clarity and control. The final outcome is a sense of peace of mind for both parties.
Financial and Property Security: A prenuptial agreement establishes an early understanding between spouses regarding the management of finances, property ownership, and other issues as they enter a marriage. With an agreement in place, both parties avoid spending on lawyers’ fees or court dates and divide their assets fairly without getting the government involved.
Clarity and Control: In marriage, your debts also become joint property, which gives your spouse ownership of your existing debt and vice versa. A prenuptial contract can clarify who owns what, including how to manage debt, as well as who will maintain ownership of certain assets or businesses, should the marriage end in divorce.
Conflict Prevention: When you enter into a marriage with a prenuptial agreement in place, you are both on the same page regarding your financial rights. This agreement states exactly what to expect from the marriage, making this an effective tool for conflict prevention. It also provides a specific framework in the event of divorce and possible litigation that could be costly and time-consuming.
Private Business Handling: As your assets and wealth grow, how they are managed in a marriage becomes increasingly important. A prenuptial contract gives you total control over how your finances are handled, even if the state gets involved in your divorce. In the absence of a contract, the state controls the divorcing couple’s funds and assets.
Peace of Mind: A prenuptial agreement provides you with peace of mind, knowing that your financial future is secure. It allows you to rest easy, knowing that if you do eventually divorce, it will not come at the cost of your future financial security or ability to live comfortably.
The importance of a prenuptial agreement in Florida cannot be understated. It provides financial security, clarity, and peace of mind to both parties as they enter into their marriage.
Possible disadvantages and considerations
Though there are many clear advantages to prenup agreements, there are also a number of potential drawbacks to consider, such as:
-You may seem untrusting or overly pessimistic about your engagement if you exhibit a desire to create a prenup. As such, some couples try to avoid dealing with the issue entirely rather than drafting a prenup simply because they are worried how it will make them appear to their betrothed.
-Prenup agreements generally hold more weight if both partners are represented by separate legal counsel, which can place a financial burden on couples before they’ve even gotten married.
-Begging for a prenup can a true wrench into an otherwise blissful engagement. Because it’s often perceived as an attack on the future of the marriage rather than a means to protect yourself from it , it can also reveal incompatibilities that could cause the relationship to end before it begins.
-Preconception of risk might provoke anxiety or erode trust that may ultimately harm the engagement and impact the relationship down the line.
-Some people fear that signing a prenup makes divorce more likely, and they’re not entirely wrong. Research shows that states whose residents sign prenups generally have slightly higher divorce rates.
-Spouses may feel entitled to more than a prenup allows. While you may be worried about what happens to your property in the event that your or your spouse decide to separate, that isn’t necessarily so great of a concern for your potential future ex.
For this reason, it’s important to balance the creation of a prenup with a genuine conversation about the nature the relationship and the perks a successful marriage could mean for both partners.
Ultimately, any couple considering a prenup in Florida should review all existing and applicable laws and speak with an experienced family law attorney prior to proceeding.
Drafting process for a prenup
As the Florida Palm Beach family law attorney, I find it very important to help educate you on the process of drafting a prenuptial agreement. This blog about the process should be a good start for understanding the process of drafting a prenuptial agreement.
1. Discussion of Premarital Intentions
A prenuptial agreement starts on your first date. You do not have to jump into premarital discussions, but over time you will learn what is important to you both to address and discuss in your prenuptial agreement. Ultimately, you would like to know your future spouse before you marry them. Depending on how long you have known each other prior to your engagement, many individuals will have a firm handle on what they want the premarital agreement to include.
2. Drafting, Seeking Counsel, and Revising the Draft
Once the parties have come to a firm understanding of what is included in their prenuptial agreement, one party’s attorney will write an outline of the agreement. Once the outline of the agreement is drafted, the attorney will consult with opposite counsel to discuss the agreement. During this stage, things are amicable, friendly, and the parties have not separated yet. As the negotiations start, typically the first draft of the agreement is exchanged between counsel and the party’s review of the agreement begins. The parties will review the agreement, ask questions, discuss the contract, and make any revisions to what they would like to change. Keep in mind, that at this stage, the parties will exchange the draft of the agreement up to about three times. There can be multiple drafts depending on how many things are addressed and modified on the agreement.
3. Justice Requiring Attorney Review Prior to Signing the Agreement
Under the statute, F.S. 61.079 and F.S. 687.111, premarital agreements must be reviewed by both parties attorney’s prior to signing the agreement. I also recommend that parties not meet together to sign their prenup as their presence would be required by law and I do not think having a third party witness them hurts them either. As the parties are requiring witnesses to sign and potentially notarize their agreement, I do recommend that regardless of having an attorney review the document, the agreement is fair and reasonable in its conditions.
Enforcement and litigation challenges
Upon the death of either spouse or the dissolution of their marriage, the court may enforce the terms of the prenuptial agreement. It is important to remember that agreements which are not executed in substantial compliance with the statutory requirements, under the Uniform Premarital Agreement Act, or the statutory requirements of any other law, are not enforceable.
It is common for even a valid premarital agreement to be challenged by one or both of the parties. The Florida Uniform Premarital Agreement Act recognizes only four bases to set the agreement aside. A premarital agreement is not enforceable for the following reasons:
- The agreement was the product of fraud, duress, coercion, mistake, misrepresentation or, nondisclosure of assets or financial obligations that impaired the rights of one of the parties; or
- The agreement was not executed voluntarily; or
- The agreement was unconscionable when it was executed because, in light of the following circumstances, it deprives the spouse or prospective spouse of spousal support or causes the spouse or prospective spouse to be left with an unreasonable amount of property or no property and the spouse was not represented by independent legal counsel at the time of, or voluntarily waived the opportunity to seek independent legal counsel concerning, the writing:
(a) That such spouse or contemplated spouse was given a fair and reasonable disclosure of the property or financial obligations of the other spouse or contemplated spouse;
(b) That such spouse or contemplated spouse did not have, or reasonably could not have had the knowledge of the property or financial obligations of the other spouse or contemplated spouse; and
(c) That all of the economic circumstances of the spouse or contemplated spouse were not disclosed to the other spouse or contemplated spouse; or
4. The agreement was rendered invalid because the marriage was not solemnized.
Similar challenges in other states have been resolved by the application of the doctrine of unclean hands.
Prenup agreement FAQs Florida
Understanding the entire concept of prenup agreements in Florida can be difficult for those who are just starting their research. That is why we have put together a list of common FAQ surrounding Florida prenup agreements.
Can prenup agreements be modified?
If both parties agree, prenup agreements can absolutely be modified or changed in the future with the creation of a post-nuptial agreement. Additionally, any spouse can avoid upholding the contract with an Florida prenup agreement lawyer if they can prove the agreement is deemed unfair because duress or fraud existed when the agreement was created.
Will a prenup agreement save me money?
Not necessarily. A properly constructed prenup agreement will lay out the required laws and regulations in detail and in advance — which does have value in terms of legal fees and costs. The unfortunate downside is that couples can argue over how the assets should be split up well before they start seeing an attorney — throwing the legal fee and cost issue out the window.
What happens if I don’t have a prenup agreement?
In case of a divorce , the assets will be divided according to Florida law. The details of this are touched upon in Florida laws 61.075.
When should I get a prenup agreement?
The best time to get a prenup agreement is when neither party believes the relationship is not going to work, or during the courting process. Ideally, it should be signed no less than 2 weeks before the wedding. The goal is to avoid a situation where one party will claim they were pressured or coerced into signing the agreement.
Can I be asked to sign a prenup agreement?
Yes. Florida is a state that allows both parties to ask for or propose to produce a prenup agreement.