Florida Prenuptial Agreements
Beach wedding, anyone? First things first. Let’s work on your prenup! In Florida, a prenuptial agreement is actually called a premarital agreement (but they mean the same thing). What exactly is a premarital agreement, you ask? To put it simply, it is a private contract between two people who plan to marry; emphasis on the plan to marry as the contract must be completed and signed prior to entering into the marriage. However, the agreement details the financial rights and ownership of certain property during and after the marriage. Prenups go into effect after the marriage begins. In Florida, the “Uniform Premarital Agreement Act” (UPAA) governs premarital agreements.
The Florida UPAA
Florida adopted the Uniform Premarital Agreement Act (UPAA) in 2007. In the UPAA, you will find uniform rules which guide the creation of premarital agreements and help courts determine whether or not they should be enforced (You can read all about the Uniform Premarital Agreement Act here). History lesson time. In 1972, the Florida Supreme Court in the case of Posner v. Posner, 257 So. 2d 530 (Fla. 1972), ruled that a premarital agreement that contained a spousal support provision was legally valid and enforceable. This is important because prior to this case, Florida did not allow couples to contractually make divorce arrangements before entering into the marriage. This concept was once considered to be contrary to public policy. In the following years, premarital agreements would become more and more popular. But, there was a lack of guidance on the topic. Cue the Uniform Premarital Agreement Act which was created in 1983. The UPAA provided uniform guidance as to the validity of prenuptial agreements as well as whether the contracts were enforceable. Joining with numerous other states, in 2007, Florida adopted parts of the UPAA and created it’s very own UPAA.
What can you include in your Florida prenup?
- Non-Marital Property – This refers to property that is not considered marital. While there are laws that govern what is and is not marital property, in your premarital agreement, you can specify and exclude certain property from being considered part of the commingled marital assets.
- Marital Property – This refers to property that is not of the marriage. A Florida premarital agreement can specify what property should be considered or become marital property. This can include assets that were acquired prior to marriage (if you choose to do this- don’t forget about appreciation of otherwise non-marital property), as well as assets that are acquired after the wedding bells.
- Alimony – This is also known as spousal support. In this situation, one spouse provides monetary support to the other spouse. Calculation of alimony is governed by state law. However, in your Florida premarital agreement, you can specify how you would like alimony to be handled. For example, you may choose to set a cap on alimony or you may waive alimony completely. There is a lot of room for customization here.
- Support of Children – Child support and child custody cannot be validly included in a premarital agreement.
What to include in a Florida Prenup?
- Put it in writing
- The terms contained in the prenup must be lawful terms
- You and your fiancé both have to sign the agreement – and, we recommend initialing the bottom of each page!
- You and your fiancé must sign the agreement voluntarily (this means without being under duress, intimidation, deceit, etc.)
- Have your signatures notarized! While this is not a requirement in all states, it is a best practice.
- Financial disclosure (this is what your Schedule A or B financial schedule is for!)
What NOT to include in a Florida Prenup?
- You cannot include provisions which would either violate the public policy of the state or a law imposing a criminal penalty.
- You cannot contract away the right of a child to receive support (nor custody).
Florida Uniform Premarital Agreement Act
• The Florida Uniform Premarital Agreement tells us what can be included in a valid Florida premarital agreement. The definition of a premarital agreement delineated in the Act is as follows:
• “Premarital agreement” means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.”
• The Act states that you may contract with respect to the following:
1. The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;
2. The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
3. The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
4. The establishment, modification, waiver, or elimination of spousal support;
5. The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
6. The ownership rights in and disposition of the death benefit from a life insurance policy;
7. The choice of law governing the construction of the agreement; and
8. Any other matter, including their personal rights and obligations, not in violation of either the public policy of this state or a law imposing a criminal penalty.
(b) The right of a child to support may not be adversely affected by a premarital agreement.
Official term for jointly owned property
Most states follow either a community property theory or an equitable distribution theory when it comes to dividing assets and liabilities upon dissolution. Florida follows the equitable distribution theory. This means that upon divorce, marital property is divided equitably (note: this means that the division may not be equal).
According to the Florida statute, Marital Assets and Liabilities can include:
“Marital assets and liabilities” include:
a. Assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them.
b. The enhancement in value and appreciation of nonmarital assets resulting from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.
c. The paydown of principal of a note and mortgage secured by nonmarital real property and a portion of any passive appreciation in the property, if the note and mortgage secured by the property are paid down from marital funds during the marriage. The portion of passive appreciation in the property characterized as marital and subject to equitable distribution is determined by multiplying a coverture fraction by the passive appreciation in the property during the marriage.
Official term for independently owned property
According to the Florida family law statute, “Nonmarital assets and liabilities” include:
1. Assets acquired and liabilities incurred by either party prior to the marriage, and assets acquired and liabilities incurred in exchange for such assets and liabilities;
2. Assets acquired separately by either party by noninterspousal gift, bequest, devise, or descent, and assets acquired in exchange for such assets;
3. All income derived from nonmarital assets during the marriage unless the income was treated, used, or relied upon by the parties as a marital asset;
4. Assets and liabilities excluded from marital assets and liabilities by valid written agreement of the parties, and assets acquired and liabilities incurred in exchange for such assets and liabilities; and
5. Any liability incurred by forgery or unauthorized signature of one spouse signing the name of the other spouse. Any such liability shall be a nonmarital liability only of the party having committed the forgery or having affixed the unauthorized signature. In determining an award of attorney’s fees and costs pursuant to s. 61.16, the court may consider forgery or an unauthorized signature by a party and may make a separate award for attorney’s fees and costs occasioned by the forgery or unauthorized signature. This subparagraph does not apply to any forged or unauthorized signature that was subsequently ratified by the other spouse.
Alimony Upon Divorce
Let’s go straight to the source:
(1) In a proceeding for dissolution of marriage, the court may grant alimony to either party, which alimony may be bridge-the-gap, rehabilitative, durational, or permanent in nature or any combination of these forms of alimony. In any award of alimony, the court may order periodic payments or payments in lump sum or both. The court may consider the adultery of either spouse and the circumstances thereof in determining the amount of alimony, if any, to be awarded. In all dissolution actions, the court shall include findings of fact relative to the factors enumerated in subsection (2) supporting an award or denial of alimony.
(2) In determining whether to award alimony or maintenance, the court shall first make a specific factual determination as to whether either party has an actual need for alimony or maintenance and whether either party has the ability to pay alimony or maintenance. If the court finds that a party has a need for alimony or maintenance and that the other party has the ability to pay alimony or maintenance, then in determining the proper type and amount of alimony or maintenance under subsections (5)-(8), the court shall consider all relevant factors, including, but not limited to:
(a) The standard of living established during the marriage.
(b) The duration of the marriage.
(c) The age and the physical and emotional condition of each party.
(d) The financial resources of each party, including the nonmarital and the marital assets and liabilities distributed to each.
(e) The earning capacities, educational levels, vocational skills, and employability of the parties and, when applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate employment.
(f) The contribution of each party to the marriage, including, but not limited to, services rendered in homemaking, child care, education, and career building of the other party.
(g) The responsibilities each party will have with regard to any minor children they have in common.
(h) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a nontaxable, nondeductible payment.
(i) All sources of income available to either party, including income available to either party through investments of any asset held by that party.
(j) Any other factor necessary to do equity and justice between the parties.
Florida Divorce Statute:
“Dissolution of Marriage:” Terminology used by the state to refer to divorce.
Florida Prenuptial Agreement Caselaw
Waton v. Waton, 887 So. 2d 419 (Fla. 4th DCA 2004)
The couple in this case was married after only a few months of dating. Prior to the wedding, they entered into a prenuptial agreement in which they decided all property would remain separate and non-marital. They also both waived their right to alimony. As required in Florida, the prenup included a financial disclosure. However, in it, husband listed some of the values of his property and assets as unknown.
Sadly, after 18 years of marriage, they decided to call it quits. During divorce proceedings, wife took issue with the unknown valuations listed in the prenup and challenged the agreement’s validity. However, the court found the husband’s financial disclosure to be sufficient, especially because they did not suspect the husband of attempting to conceal assets from his wife. The asset list gave wife “such general and approximate knowledge of his property as to enable [the spouse] to reach an intelligent decision to enter into the agreement.” Regarding the overall fairness of the prenup itself, the court called the outcome unfair (wife had not worked in 13 years and husband was quite wealthy). However, even unreasonable agreements (which are freely entered into) are enforceable.
Moral of the story: financial disclosures do not need to be minutely detailed. They just need to give the other party knowledge sufficient to allow them to make an informed decision to enter into the agreement. Also, don’t forget, even “unfair” agreements can be enforceable (as long as there is no coercion, duress, fraud, ect.)
Flaherty v. Flaherty, 128 So. 3d 920 (Fla. 2d DCA 2013)
This couple began discussing prenups several months before their wedding. However, when it came to signatures and finalization, it was down to the wire. After wife was previously advised by her attorney not to sign the prenuptial agreement, wife was handed the agreement at 11:30p.m. the night before her wedding. In the frenzy of signing and finding a notary (at 2a.m.!) she didn’t even read the whole thing before signing it. Down the road, the couple split up and wife challenged the validity of the prenuptial agreement which she said was signed under duress. The court agreed and declared the prenup to be invalid.
Moral of the story: while not always evidence that a prenup was signed under duress, it’s best to sign your prenup well in advance of your wedding.
Francavilla v. Francavilla, 969 So. 2d 522 (Fla. 4th DCA 2007)
This is a juicy one. The couple was engaged in a series of break-ups and make-ups and even more than one wedding and divorce (check out the full text for all the details!). Before the couple’s second wedding, the husband insisted on a prenuptial agreement and the parties went through several different drafts of the agreement. Negotiations continued all the way up to the hour before the wedding. When the couple eventually divorced for the second time, wife tried to invalidate the agreement based on duress as the signing occurred shortly before the wedding and at the time, wife was seven months pregnant and unemployed. While the court expressed its sympathy for the wife, it found the agreement to be valid. According to the court, this scenario lacked the time pressure element which is often present in other cases in which duress applies. Here, the couple had been negotiating the prenup for months. Additionally, the court noted that the couple was having a simple courthouse wedding which, in comparison to lavish weddings, could have been easily rescheduled if they needed more time.
Moral of the story: the court looks at the whole picture! But, it’s still best to get your prenup finalized and signed in advance of the wedding.
Aguilar v. Montero, 992 So. 2d 872 (Fla. 3d DCA 2008)
The couple in this case waived their rights to alimony in their prenuptial agreement. However, upon initiation of divorce proceedings, wife sought temporary alimony (pre finalization of divorce). Despite the waiver of alimony, the court granted wife’s request. In doing so, the court definitively declared that parties may not waive alimony during the pendency of a divorce action. Why? because prenuptial agreements govern what occurs after marriage and during divorce proceedings, the couple is still technically married.
Moral of the story: you cannot waive alimony during the period of time prior to the finalization of divorce.
Hahamovitch v. Hahamovitch, 174 So. 3d 983 (Fla. 2015)
In the couple’s prenuptial agreement, wife waived her rights to all of her husband’s separate property (acquired both prior and subsequent to the marriage). When the couple split up, wife argued that she was entitled to an “equitable distribution” of the appreciation in value of husband’s separate property. Appreciation in value was not specifically addressed in the prenup. Based on the broad language waiving rights to all of husband’s separate property, the court found that this was sufficient to extend to the appreciation and enhancement in value, even the appreciation which was due to the marital funds and labor.
Moral of the story: don’t forget about value appreciation in property.
Lashkajani v. Lashkajani, 911 So. 2d 1154 (Fla. 2005)
In this case, the Florida Supreme Court declared that prenup provisions which require payment of the prevailing party’s (the party who “wins” in court) attorney fees, are valid and enforceable. Despite the fact that this technically applies to a period of time while the couple is still married (see the Aguilar case above for a similar discussion!), it is valid nonetheless because it really pertains to distributing assets post-divorce. Plus, they are intended to protect the party which relies on the agreement, and not to enrich them.
Moral of the story: you can include attorney fees provisions in your agreement.
Julia Rodgers is HelloPrenup’s CEO and Co-Founder. She is a Massachusetts family law attorney and true believer in the value of prenuptial agreements. HelloPrenup was created with the goal of automating the prenup process, making it more collaborative, time efficient and cost effective. Julia believes that a healthy marriage is one in which couples can openly communicate about finances and life goals. You can read more about us here Questions? Reach out to Julia directly at [email protected].