With the recent rash of celebrity divorces, the topic of prenuptial agreements is making its rounds through the rumor mill once again. In our business, we find that the topic of such agreements is fraught with misunderstanding and incorrect assumptions based on “hearsay”. To get a better understanding of prenuptial agreements, I spoke with Claudia Capriles, a partner in the Miami family law firm of HoldenCapriles.
DM: What is a prenuptial agreement and why is it used?
CAPRILES: A prenuptial agreement is a contract entered into between two people prior to their marriage, which sets forth each spouse’s rights and obligations in the event of death, divorce or even during the marriage. Generally, couples decide to enter into prenuptial agreements as a way to take proactive steps to plan for the future. These agreements allow couples to predict and determine the division of marital assets and debts and establish or waive support obligations.
DM: When is it a good idea to use such an agreement?
CAPRILES: People often assume that prenuptial agreements are solely for wealthy individuals who are planning to marry someone whose financial means are disproportionally less than theirs. While this is certainly one instance in which a prenuptial agreement would be a good idea, it is not the only one. As second and third marriages are more prevalent in today’s society, prenuptial agreements are being used to protect one or both spouses in the event the marriage does not last. This is also the case for individuals who are now marrying later in life, after establishing a successful career and amassing a substantial estate.
DM: What are the components of a well written agreement?
CAPRILES: A well written agreement anticipates future events such as separation, divorce, death, illness, remarriage and changed financial circumstances; setting forth specific terms that define each party’s rights and responsibilities in each circumstance. These agreements should define “triggering events” and cut-off deadlines, as well as the types of payments provided to the receiving spouse and the terms for how and when those payments will be made. In addition, a properly constructed agreement should specify how real and personal property will be transferred to each party in the event of divorce or death, and it should limit the circumstances under which a spouse could seek to modify the agreement in the future.
DM: Can such an agreement be challenged in court?
CAPRILES: Prenuptial agreements can be challenged in two different ways. First, a prenuptial agreement can be set aside if it is established that a party did not execute the agreement voluntarily or the agreement was reached under fraud, deceit, duress, coercion or overreaching. Second, one spouse can challenge an agreement by claiming that the terms were unconscionable when it was executed, and before it was executed, the challenging spouse was not provided with fair and reasonable disclosure of the other party’s assets, liabilities and income. However, a bad bargain, by itself, is not enough to set aside a prenuptial agreement.
DM: What are typical clauses in an agreement that could be challenged and why?
CAPRILES: There is a definite shift in the courts’ attitude as it relates to prenuptial agreements. Today, courts are much more inclined to view a prenuptial contract just as any other contract that means what it says and is enforced as written. However, there are certain provisions that are still against Florida’s public policy and will not be upheld. For example, parties to a prenuptial agreement cannot waive temporary support or temporary attorney fees during a pending divorce proceeding. Also, rights regarding child support, parental responsibility, and time-sharing cannot be waived under Florida law in a prenuptial agreement. But, a court can consider the parties’ intentions regarding children’s issues, if they are set forth in an agreement.
Carlos Blanco founded The Big Kaboom www.thebigkaboom.com, which combines people, technology and social elements to support clients through the divorce process. He may be contacted by calling 305-908-1171 or sending an email to email@example.com.