Why You Need a Prenup
Congratulations, you have survived the dating phase of your life (hopefully forever) and you are now engaged! Whether your blessed union is the result of an awkward set up by your mother, or a well-intentioned friend, that has blossomed into true love; or the result of a rare but successful foray into the soulmate-promising dating app world; or even the result of a good old-fashioned, often frowned upon – especially by the H.R. director – office romance, you, my friend, should consider entering into a prenuptial agreement before you get married.
A prenuptial agreement (referred to as a “premarital” agreement under Florida law) is “an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.” FL Stat. § 61.079(2)(a) (2020). Unlike a normal contract, no consideration (such as money or an exchange of promises) is necessary for the agreement to be enforceable other than the marriage itself. Like most contracts, however, it can be specifically tailored to meet the needs of the parties under their particular circumstances. Common issues addressed in a prenuptial agreement include: division of marital assets and liabilities in the event of divorce, alimony and rights to assets, or a share of the other party’s estate, upon death. The only thing that cannot be covered in a prenuptial agreement is child support or child custody as these provisions are not enforceable and the court will always consider what is in the best interest of the child(ren) at the time of divorce.
A premarital agreement will be enforceable in Florida unless the challenging party can prove that: (a) he or she did not enter into the agreement voluntarily; (b) it was the product of fraud, duress, coercion or overreaching; or (c) it was unconscionable when it was executed and, before execution, the challenging party (i) was not provided a fair and reasonable disclosure of the property or financial condition of the other party, (ii) did not voluntarily and expressly waive, in writing, the right to disclosure beyond what was provided, and (iii) did not have (or reasonably could not have had) an adequate knowledge of the property or financial condition of the other party. FL Stat. § 61.079(7)(a) (2020). In addition, following certain formalities can increase the likelihood of an agreement’s enforceability. For example, each party should be represented by independent legal counsel, which may counter an argument that the challenging party did not understand what they were signing. In addition, each party should pay his or her own attorney’s fees. However, the two most important factors to bolster an agreement’s enforceability are proper disclosure and time.
Each party should provide a full and frank disclosure of his or her assets and financial condition to the other party, with enough time for each party to ask questions and understand the full scope of the other party’s financial situation. In addition, each party should provide copies of their two or three most recent tax returns. The goal is to avoid the argument by the challenging party that if he or she had known what the other person really had, they would have never accepted or waived what they did in the agreement. As to the time factor, the goal is to avoid or reduce the possibility of an argument that the challenging party signed under duress or coercion. The parties should negotiate and execute the agreement well in advance of the wedding. How much time is necessary? It depends on the circumstances, but ideally, before any wedding invitations go out or deposits are paid. The more difficult it would be to cancel the wedding (because of financial or emotional impediments), the duress or coercion argument increases. As you can imagine, negotiating the terms of your hypothetical divorce with your betrothed in the weeks leading up to the wedding is not necessarily conducive to marital bliss and tranquility, so get it done as early as possible.
Anyone getting married should consider entering into a prenuptial agreement. If the steps described above are followed, the risk of a successful challenge by the less wealthy party is significantly lower. Divorce is emotional, and often expensive, but can be less contentious if these matters have been agreed upon before the marriage when both parties are in love and more inclined to act reasonably with respect to the other party. In addition, the negotiation of the agreement itself will tell you a lot about your spouse-to-be. Entering into a prenuptial agreement and agreeing on the significant terms that are often heavily litigated during a divorce can result in a less expensive, faster, and less emotionally charged divorce proceeding, down the road, should that unfortunate situation occur. But hopefully that day never comes and you and your spouse live happily ever after.