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Prenuptial Agreements

Reasons to get a prenup before saying “I do”

January 14, 2021/in Firm News, Prenuptial Agreements/by

While many couples in Florida are optimistic that their marriage will be able to stand the test of time, the reality is that not all unions will last. Divorce is a reality that needs to be considered before and during a marriage, making it imperative that partners consider how best to address the possibility of the relationship not lasting. This is where pre-marital documents could be beneficial.

Prenuptial agreements were originally thought to be just for the rich and famous. While these individuals are very likely to include a prenup in their union, one does not need to be wealthy or a celebrity to benefit from a premarital document.

Reasons to get a prenup

With an increase in the usage of prenuptial agreements, it is important to understand why couples get a prenup. Some of these are obvious and a continued reason to include this document in a marriage. To begin, if a partner comes from money, a prenup is often used to protect the partner’s inheritance or their expected inheritance.

A wealth-generating family business is often a catalyst for a prenup. Similarly, if a partner currently has a business or is planning to start a business, a prenuptial agreement can provide necessary protections for business in the event of a divorce.

Simplify divorce process

Divorces can be messy and time consuming. A prenup could help spell out the process, guiding the process when it comes to property division and other issues. Additionally, if this is not a person’s first marriage, a prenup could help protect children from a previous relationship and their stake in an inheritance or the like. Finally, a prenuptial agreement could help spell out what happens in the event of death, ensuring the surviving spouse gets the monies they require.

Although it is not easy to talk about divorce before a marriage has even begun, it is a practical step to take. Divorce can be emotional, messy and challenging; therefore, it is beneficial for partners to consider what could be done to ease this process while also preserving and protecting their rights and interests.

https://www.philmcleoddivorce.com/wp-content/uploads/2021/03/Philip-A-McLeod.png 192 192 On behalf of Law Office of Philip A. McLeod, P.A. https://www.philmcleoddivorce.com/wp-content/uploads/2021/03/Philip-A-McLeod-PA.png On behalf of Law Office of Philip A. McLeod, P.A.2021-01-14 13:28:352021-04-13 02:34:03Reasons to get a prenup before saying “I do”

Once taboo, “postnups” gain in popularity with younger couples

September 25, 2020/in Prenuptial Agreements/by

Beyonce, Heid Klum, Rupert Murdoch – what do they all have in common? Many would say an obscene amount of money, and they would be correct. But these well-known celebrities share something else in common: they all allegedly signed postnuptial agreements with their respective spouses.

Postnuptial agreements are a contract that establishes rights to property, assets, and other possessions in the event of divorce or a spouse’s death. They’re similar to their sister agreement – the prenuptial—except they occur after the marriage; hence, “postnuptial” instead of “prenuptial”.

This formerly taboo marital contract—once seen only in uber wealthy circles—has grown popular among younger couples of all socioeconomic standings.

This newfound popularity is driven by changes in marital culture, according to observers referenced in an article published by Harper’s Bazaar.

The driving force behind postnuptial agreements

Firstly, millennials are getting married at older ages and often have more assets at the time of marriage. Spouses entering marriage with more assets have an innate desire to ensure those assets are protected in case of separation or death.

Postnuptial agreements as a means of asset protection are especially valued in instances of transmutation, when individually owned property becomes marital property. For example, if you inherit a vacation house from a deceased parent, and you’re married, this becomes marital property. With a postnuptial agreement, you can ensure that a possession of such sentimental value ends up in the right hands.

According to the article, younger generations also perceive marriage differently; they view marital unions as practical life choices between two consenting adults, rather than spiritual unions. In a sense, their understanding of marriage is more transactional. Decades-long business relationships are still governed by contracts, so why not husband and wife?

Next steps in seeking a postnuptial agreement

Postnuptial agreements may not be for everyone, but they may be of great benefit to many couples. Interested spouses can always consult with an experienced family lawyer before signing any kind of legal document.

Family law lawyers have experience with the law governing visitation, child custody, and divorce. They’re able to tease out issues that might not be apparent given the literal language of a contract, ensuring the rights of all parties are protected and saving everyone considerable hardship down the road.

https://www.philmcleoddivorce.com/wp-content/uploads/2021/03/Philip-A-McLeod.png 192 192 On behalf of Law Office of Philip A. McLeod, P.A. https://www.philmcleoddivorce.com/wp-content/uploads/2021/03/Philip-A-McLeod-PA.png On behalf of Law Office of Philip A. McLeod, P.A.2020-09-25 10:20:242021-04-13 02:18:30Once taboo, “postnups” gain in popularity with younger couples

Premarital Agreements (Prenup)

May 8, 2020/in Firm News, Prenuptial Agreements/by

In Florida, Florida Statute 61.079 controls what most people call a prenuptial agreement or prenup. However substantial case law also controls some issues.

If the prenup is signed by both parties then the Court looks to whether it is enforceable or not. The Statute defines how it can be set aside as:

  1. Was it executed voluntarily.

The one area this usually comes about is that it is signed too close to the wedding! While no case or statute defines what is or is not “too close”, you should have it reviewed and approved well before you ever get close to the marriage date. I normally suggest no less than 30 days. Obviously if the party were forced to sign or was told there would be no wedding while guest are already on their way for it, then this would be indicia of involuntary.

  1. Was the agreement a product of fraud, duress, coercion, or overreaching.

This is more difficult to define.  Duress and coercion can take many forms. Legal duress is more than telling someone they will not marry them without a premarital agreement.  Fraud is much clearly and is based n the facts surrounding its signing and leading up to signing.

  1. If the agreement is unconscionable when signed and before signing, the other party was (a) not provided a fair and reasonable disclosure of the property and financial obligations of the other party and (b) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond what was disclosed (paraphrased) and © did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.

This is why I normally require a full disclosure attached to the agreement as Exhibits of what each party is bringing into the marriage that may be worth in excess of $500.  Then it is difficult later to say the other party did not know what each had.

The statute also defines what can be included in premarital agreements.

Clients normally want to protect what they bring into the marriage, however current law provides that assets brought into the marriage are nonmarital, thus their value as of the date of marriage and any passive appreciation remains nonmarital. Without a premarital, the issue(s) becomes if the asset is improved during the marriage through “marital efforts” then the increase is marital.  Also if it is an intangible asset such as bank accounts, then if you mix marital funds (earnings or other funds gained as a result of marital efforts) into the nonmarital funds, then they become marital in their entirety. The one exception to this are retirement accounts. There the Court will value it as of the date of marriage then calculate what that value would have done invested as it was during the marriage and that is set aside as nonmarital. Any monies deposited during the marriage from earnings and appreciation or depreciation will be marital. This can be changed by the terms of the agreement so that all is nonmarital. For Estate purposes, any ERISA account (usually 401k, 403b, but there are others) is subject to a spouse’s entitlement whether acquired before or during the marriage. Thus if you want to be able to designate it to someone other than the spouse, then you must file a waiver after marriage or it will go to the spouse.

Also the mere fact that you marry, permits one spouse to claim 30% of the other’s Estate (Elective Share). This can be waived in the agreement.

One case has held that where the Elective Share is waived by the premarital agreement and the spouse later provides in their Will for a Trust to be created for their spouse equal to the elective share, that this provision in the Will is void as an attempt to modify the premarital as it was not signed by both parties (which the premarital Statute requires) and the Wife, in that case, lost the value of the Trust.

If you plan on living in one party’s home and it will remain titled solely in that spouse’s name, then this “homestead” comes with statutory rights. That right is for the non-owner spouse to receive either a life interest in the house or one-half of its value should the owner die. This too can be waived. In the case of divorce, the case of Kaaa ruled that any passive appreciation, improvements and mortgage paid down during the marriage using marital funds are marital. There is a statutory formula for determining how much the non-owner receives.

By law, gifts by the parties to each other during the marriage (note, engagement rings are before the marriage thus the receiving party keeps them as nonmarital) are treated as owned one-half by each party. This can be modified so that the receiving party is entitled to it. Gifts from third parties (so long as not improved or commingled with marital funds) remain nonmarital as would purchases made from them.

While this is not intended as an exhaustive analysis of premarital agreements, we hope it has helped you understand them better.

https://www.philmcleoddivorce.com/wp-content/uploads/2021/03/Philip-A-McLeod.png 192 192 On behalf of Law Office of Philip A. McLeod, P.A. https://www.philmcleoddivorce.com/wp-content/uploads/2021/03/Philip-A-McLeod-PA.png On behalf of Law Office of Philip A. McLeod, P.A.2020-05-08 15:10:352021-04-13 01:58:28Premarital Agreements (Prenup)

WHAT THE “A”!

May 8, 2020/in Firm News, Prenuptial Agreements/by

You may say WTF and this is a case that highlights why words, no matter how small,  mean so much in the law.  Clients sometimes ask why prenuptial agreements cost so much. Well, here is a case that highlights the pitfalls of drafting these very dangerous documents.

In the recent case of Famigilo v. Famiglio, 2019 in the Second District Court of Appeals (binding on Courts from Crystal River to Marco Island), the Court considered that smallest of all vowels “a” vs. “the.” Seems of little consequence right! Well what if the difference between these two very small words would eventually cost you $2,400,000! Yes, that’s right, I said $2,400,000!

In this case, the parties entered into a prenuptial agreement which said that any lump sum alimony benefits the Wife was to receive would be based on the number of years they lived together “at the time a Petition for Dissolution of Marriage is filed.” This is a very common concept in prenuptial agreements and not an isolated event!

Here the Wife initially filed for her divorce in 2013, it was never served on Husband and it was dismissed.  In 2016 the Wife then filed a Petition for Dissolution (for divorce) and this resulted in their divorce being finalized.  During the period from the Wife’s initial filing and the Wife’s second and final filing, the increase in what the Wife would receive had increased $1,500,000.  So, the Appellate Court had the issue of whether her 2013 filing was the filing of “a” Petition for Dissolution or was her second filing in 2016 was the filing of “a” Petition.  The Court goes through a lengthy analysis of the use of the word “a” and came to the conclusion that her filing in 2013 was a filing, thus she was entitled to $1,500,000 less than what she would have received had her 2013 filing controlled! Had her attorneys said that she was entitled to receive an amount certain upon the filing of “the” Petition that results in their divorce, she would have received $1,500,000 more than she did!

Now when you ask your attorney why it costs to obtain a prenuptial agreement, it may make absolute sense that protecting you from a $1,500,000 mistake is well worth it!

https://www.philmcleoddivorce.com/wp-content/uploads/2021/03/Philip-A-McLeod.png 192 192 On behalf of Law Office of Philip A. McLeod, P.A. https://www.philmcleoddivorce.com/wp-content/uploads/2021/03/Philip-A-McLeod-PA.png On behalf of Law Office of Philip A. McLeod, P.A.2020-05-08 11:42:432021-04-13 02:00:36WHAT THE “A”!

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