Signing a Prenup? You’re Going to Want to Read This

Signing a Prenup? You're Going to Want to Read ThisLast Thursday, September 10, was an important day for prenup-signers everywhere.

The Ruling

The Florida Supreme Court upheld a provision in a prenuptial agreement signed 22 years prior, that stated the wife had no right to property titled in the husband’s name, even if he purchased it or it increased in value during the marriage.

The Question

The major question up for review in this case was as follows:

When a prenuptial agreement provides that

  • neither spouse will ever claim any interest in the other’s property,
  • each spouse shall be the sole owner of property purchased or acquired in his/her name, and
  • each spouse waives and releases all rights and claims that they may be otherwise entitled to

does that mean the wife waives her right to any share of assets titled in the husband’s name, EVEN IF those assets were acquired during the marriage due to the parties’ efforts as a married couple, or the assets appreciated in value during the marriage due to the parties’ efforts as a married couple?

The Court said yes, the wife waives her right. The basic idea for parties to a prenuptial agreement is, if the contract is clear and unambiguous, there was no fraud, and the parties entered into it willingly, then it must be enforced. Just because it’s a bad deal for one of the parties does not make it unenforceable in court. 

You can read the Court’s opinion here.

Why was this question being asked?

Under Florida law, spouses share the “fruits of the marriage”. That means that when one spouse acquires something during the marriage, or something they owned before the marriage increases in value during the marriage, it’s considered marital property to be divided equitably between the spouses in a divorce. (Note: ‘Equitably’ is not necessarily the same as ‘equally’. Read a previous post about equitable distribution here.)

However, spouses can enter into a contract before (prenuptial) or during (postnuptial) that essentially trumps the state law.

The wife’s main argument in this case was that the prenuptial agreement did not specifically reference an increase in value of nonmarital property due to “marital labor or funds”, nor did it specifically state that the husband’s earnings would be his separate property and therefore these should not be protected assets under the prenup.

The Court found, however, as did the lower courts, that the language in the prenup was general enough to cover those types of assets. The parties waived all claims and rights to each other’s separate property. Both spouses were represented by competent legal counsel and entered into the prenuptial agreement freely and voluntarily, and the Court held that both the husband and wife intended to be bound by the provisions in the prenup.

The Court found that the language of a contract is the best evidence of the parties’ intent, and where it is clear and unambiguous, it must be enforced pursuant to its plain language and meaning.

What does this mean for you?

The takeaway from this case is that as long as a prenuptial agreement is signed freely and voluntarily, and the court finds evidence that you intended to be bound by the terms of the agreement, it will be enforced. Remember, a “bad deal” does not make it unenforceable!

Therefore, if you don’t want it to happen, don’t agree to it. Contact an attorney who is experienced at drafting, reviewing, and litigating prenuptial agreements, so you can be sure that you understand the terms of the prenup, and that what you are signing is fair and reasonable for you.

George Gelb has over 35 years drafting prenuptial and postnuptial agreements in Jupiter and the surrounding areas. Contact him today for a free consultation.

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