Premarital Agreements are Alive and Well in Florida

Unfortunately, the reality in our society is that we cannot rely on the promise of a lifelong marriage. The United States currently has the highest divorce rate at about 50 percent for first marriages and almost 70 percent for remarriages. If you live in Florida, the picture becomes even more bleak. A CDC National Vital Statistics Report reveals that in the month of October 2008, Florida had the highest number of divorces (7,007) among the 44 responding states.Considering the Census Bureau's projection that Florida's population of people over age 65 will continue to be the highest in the U.S., the chance of being an older Floridian in a shaky second marriage soars, as does the possibility of being widowed. Fortunately, a premarital agreement can bring predictability and security to the circumstances surrounding settlement of your personal affairs following a marriage or remarriage.Personal Security in MarriageThe premarital agreement is a carefully thought-out contract between two people in anticipation of their marriage. Such agreements may also be referred to as antenuptial or prenuptial agreements, and informally as prenups. The couple planning to be married decides how important financial matters will be resolved in case of divorce, separation or death.Common issues prospective spouses negotiate include the following:

• Division of real property and assets acquired during the marriage
• Property entitlement and control in the event of divorce or death
• Responsibility for liabilities incurred during the marriage
• Designation of each prospective spouse's "separate property," and whether or not that property will remain nonmarital or become marital depending upon how it is titled
• Determination of joint and separate living expenses and how they will be paid during the marriage
• Designation of how assets acquired and liabilities incurred during the marriage will be titled
• Determination of rights to each other's retirement assets and waiver of beneficiary rights
• Spousal support, also known as alimony or spousal maintenance
• Life insurance rights
• Estate planning tools like wills and trusts
• Choice of which jurisdiction's law will apply to the agreement

Florida Uniform Premarital Agreement ActFlorida adopted the Uniform Premarital Agreement Act (UPAA) effective October 1, 2007. The Act applies to prenuptial agreements entered into from that date forward. Some major provisions of the Florida UPAA (Fla. Stat. § 61.079) are as follows:

• The agreement must be in writing
• The agreement must be signed by both parties
• Any personal right or obligation may be dealt with as long as the arrangement does not conflict with criminal law or Florida public policy
• Child support may not be predetermined
• Revocation of or modifications to the agreement after marriage must be in writing
• Execution must be voluntary
• The agreement may not be influenced by fraud, duress, coercion or overreaching
• The agreement may not be unconscionable; before entering into the contract, both parties must either receive fair disclosure of the other's assets, income and liabilities, or voluntarily and in writing waive the right to such disclosure
• If the parties agree to a level of spousal support that would impoverish one party, making him or her liable for public assistance, the court may award additional alimony necessary to avoid such public assistance

Typical ScenariosMarriages today do not typically look like they did 50 years ago. In the past, it was common for two young adults in their 20s to marry for life, raise children, build financial security and accumulate assets, with the husband working for one company for many years to support the family and the wife staying home to tend to the home and raise the kids. Nowadays, divorce and remarriage are more common. In addition, people wait longer to marry and are more often financially secure before marrying; gender roles are not so strictly defined, with either or both parties bringing in significant assets; and spouses frequently enter marriages or remarriages with children from previous marriages or relationships.Prenuptial agreements allow modern spouses to control assets, liabilities and other matters in nontraditional scenarios. Here are a few common examples:

• Two people enter a second marriage later in life, financially sound and with adult children. They want their individual estates to go to their own children and not to each other upon divorce or death. Neither needs the assets of the other, already being financially independent. Instead, for support and sentimental reasons, they want their children from past marriages and relationships to inherit the wealth, real estate and personal property (especially family heirlooms) accumulated during their earlier years and prior to the second marriage. Such a couple may use a prenuptial agreement to waive legal rights each may have otherwise had in the other's individual property upon death or divorce to ensure that it goes to their respective children instead.
• Two independent high-income professionals contemplating marriage, one or both of which may own a business that was formed prior to the marriage, may decide that they want to use a prenup to designate their future earnings during the marriage as completely separate property not subject to division upon divorce, and/or to designate that the business formed prior to the marriage and any appreciation in the value of that business will remain a nonmarital asset.
• A potential spouse may want the protection of an agreement before marriage that he or she will not be liable for the other's premarital debt.

Legal Counsel is CriticalEach party to a Florida prenuptial agreement should ideally have the advice of an experienced family law attorney. The legal requirements of an enforceable agreement are complex. The lawyer should be thoroughly familiar with Florida statutes and cases affecting prenups, as well as with issues and laws pertaining to divorce, pension and retirement plan rights and tax concerns. Formal, unhurried negotiation with the assistance of counsel lessens the probability of either party entering into the premarital agreement under duress, without full knowledge of the other's financial position, or lacking meaningful understanding of the legal and practical implications of the agreement.