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It's The Law - Detail In Prenuptial Agreements Is Important

It's The Law

Detail In Prenuptial Agreements Is Important

(05/15/14)

Question:

I am getting married and both my fiancée and I have written a prenuptial agreement to govern what happens to our assets if we get divorced. Will that be enforceable in Florida?

Answer:

Premarital agreements have a long history. Early agreements involved dowry, which appear to have originated in the middle-east and later Europe. Under dowry, the prospective wife's family negotiated with the prospective husband's family to give assets to the prospective husband which were supposed to be set aside for benefit of the future wife in event of divorce or the husband's death. Ancient Hebrews had written marriage contracts setting forth obligations of the husband to his wife known as the ketubah. The primary purpose for the ketubah was to prevent a husband from divorcing his wife against her will which, in ancient times, the husband could do. The ancient Hebrews believed that if a husband knew he had to pay his wife if divorced, it would put the brakes on hasty divorce decisions. The minimum amount of the ketubah was approximately four times the price of an average house.

As the concept of premarital contracts entered Europe, it became particularly important for the wealthy European families in the middle-ages as married women were considered chattel and could not own property. The wealthy families wanted to protect their women and children and arranged for contracts to set aside assets to protect them in the event the husband died.

Despite a long history of premarital agreements, such agreements were frowned upon and declared void in the United States as early as the 1800's. The agreements were viewed as against public policy because they encouraged divorce. As women gained rights, including the right to contract and own property, premarital agreements gradually became accepted. Florida was one of the first states to approve these agreements finding they would actually promote marriage and these agreements were upheld as early as 1933. As with any contract, the devil is in the details.

Florida law provides that there are certain rights that cannot be contracted away, including the right to spousal support during a marriage and child support. In most other respects, parties intending to marry are free to contract on virtually any issue concerning their marriage and assets. Prenuptial agreements are strictly construed, which makes it very important that all issues be addressed with clarity. Specificity and clarity were at issue in the recent case of Hahamovitch v. Hahamovitch.

The Hahamovitchs had a prenuptial agreement and later divorced. The main issue concerning the prenuptial agreement was whether the wife waived any claim to assets titled solely in the husband's name, even though those assets were acquired during marriage due to the party's marital efforts or appreciated in value due to the party's marital efforts. Unless addressed in the prenuptial agreement, the latter assets and appreciation in assets would be marital and divisible in divorce.

The court reviewed the language of the agreement, which included the following:

Dianne hereby waives and releases and is hereby barred from any and all rights and claims of every kind, nature and description that she may acquire or to which she may be entitled…to any of Harry's property…including equitable distribution, division of property…

Harry and Dianne shall, during their respective life times, retain sole ownership, control, enjoyment, and power of disposition with respect to all property, real, personal, or mixed, now owned or hereby acquired by each of them…

Each party agrees that neither will ever claim any interest in the other's property and that the property of every kind nature and description which either one has on the date of the marriage will remain the respective separate property…

If Harry purchases, acquires, or otherwise obtains property in his own name, then Harry shall be the sole owner of same…

In reaching its decision, the court reviewed other Florida cases. In Weymouth, the appellate court ruled that the wife did not waive any claim to appreciation in value of a house where the prenuptial agreement merely stated that the wife "specifically waives any and all claim or claims which she might have in and to the real and personal property of the husband, owned prior to marriage."

The Valdes case ruled that a wife did not waive her right to seek equitable distribution of the enhanced value of non-marital property where the prenuptial agreement was silent on the issue of enhancement or appreciation in value of non-marital property. And, in Irwin, the court ruled that if the prenuptial agreement does not specifically designate a spouse's earnings as separate property, assets acquired with those earnings will be treated as marital and divisible in divorce. The Whirley case held that a simple waiver of appreciation in value waives only passive appreciation and not active appreciation attributable to marital labor and funds.

After review of other Florida cases in the area, the Hahamovitch court ruled the wife waived all claims to property or assets owned by the husband at time of the agreement or acquired thereafter, including any enhancement in value of such property. Unlike the language in other cases reviewed by the court, the language was broad enough to waive those rights. But, the court acknowledged that two other courts had considered prenuptial agreements with substantially similar language and reached a contrary conclusion.

Drafting a prenuptial agreement not only requires knowledge of statutes, but also of history and Florida cases. Matters must be addressed in detail and specificity and cannot be cured with hindsight. Prenuptial agreements are enforceable in Florida, but wording is critical. For that reason, you should retain an experienced attorney and not proceed with your "do-it-yourself" prenuptial plan.

By: William G. Morris, Esquire

William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney.

Questions for this column can be sent to: William G. Morris, e-mail: wgmorrislaw@embarqmail.com or by fax, (239) 642-0722 or

The Marco Island Eagle

Other articles of interest can be viewed at our website, www.wgmorrislaw.com.