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What You Need To Know About Premarital Agreements

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Here in Florida, there is a strong undercurrent in family law in favor of spousal agreements, because even if the parties cannot reach a satisfactory accord on all issues, they can at least narrow the disputes that remain.

That trend is particularly strong in terms of premarital agreements, largely thanks to the Uniform Premarital and Marital Agreements Act. This law brought together some of the diverse elements that governed decisions in this area, resulting in harmony among the different appeals circuits and even consistency with results in other states.

As a result, all people who are entering subsequent marriages, particularly if any previous relationship ended in divorce, should consider making a premarital agreement.

Coverage Area

Many people consider premarital agreements to be property agreements, and in fact, that is their primary function in most cases. In fact, premarital agreements can even designate certain property items as marital or nonmarital, and since this designation often consumes significant resources during litigation, these provisions could literally save the parties thousands of dollars.

But premarital agreements can accomplish other objectives as well, specifically in the area of inheritance and succession planning. In most cases, stepchildren have no rights in this area, and if that is not your wish, there must be a written agreement that says otherwise. In fact, many people also draw up executory documents, such as wills and trusts, to make sure their wishes are fully carried out.

Premarital agreements can cover almost any subject other than child custody or child support, because the judge must decide these issues in accordance with the best interests of the children as opposed to the best interests of their parents.

Breaking Premarital Agreements

If both sides are represented by independent attorneys, it is almost impossible to overturn premarital agreements. Even in the absence of such representation, challenging a premarital agreement is not easy. There are essentially two potential grounds:

  • Involuntary: The signing party must be under such extreme duress that closed off any other options, including calling off the wedding. For example, if Groom presents Bride with a premarital agreement a few hours before an expensive destination wedding and all guest travel arrangements have already been paid for, a judge might consider an involuntariness defense.
  • Unconscionable: Basically, “unconscionable” means “grossly uneven” as opposed to simply unfair. Moreover, the agreement must have been unconscionable when it was made. Subsequent events, like dramatic increases or decreases in value, do not render valid agreements invalid.

In each situation, if there is an issue about missing information, the challenging party must also establish that s/he had no way to obtain this information except through the other spouse.

A Case Study

To better understand how the law works, consider the example of a billionaire power couple who once owned the Los Angeles Dodgers. California, like Florida, is a UPMAA state, so the outcome would have been much the same in either jurisdiction.

When the couple entered divorce proceedings, the team was bankrupt and essentially valueless. So, the wife agreed to give up her share of the team in exchange for about $180 million in cash and property. A few years later, when he ex-husband sold the team for over $2 billion, she sued to overturn the prior agreement.

A court threw out her claim, ruling that she “simply chose the security of a guaranteed $131 million payment, plus more than $50 million in real and personal property, over the uncertainty and risk presented by the valuation and sale of the Dodger assets.” In other words, the agreement was not unconscionable when it was made. Furthermore, the court ruled that, as a former co-owner, her claims that her ex-husband misled her were misplaced.

Reach Out to Experienced Lawyers

Premarital agreements are a significant part of divorce planning. For a free consultation with an experienced family law attorney in Port St. Lucie, contact Eighmie Law Firm, P.A. After hours appointments are available.

Resource:

uniformlaws.org/shared/docs/premarital%20and%20marital%20agreements/2012_pmaa_final.pdf

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