Many people ask whether they should enter into a prenuptial agreement before getting married. For Florida residents, there are many non-adversarial reasons to enter into a prenuptial agreement.
Many people ask whether they should enter into a prenuptial agreement before getting married. For Florida residents, there are many non-adversarial reasons to enter into a prenuptial agreement. Here are some important factors for consideration.
To fix the amount of alimony in case of divorce
The expectations of the parties regarding their role in the marriage, and the resulting economic consequences should the marriage end, make fixing the terms of alimony in a marital agreement of paramount importance. Interestingly, because the Florida legislature attempted to remove some of the discretion previously given to trial courts regarding the length of marriage by the new short term / moderate-term / and long term concept, we have heard of situations where a divorce petition is filed in the 6th year of marriage (to guarantee against having to pay permanent alimony), or in the 16th year of marriage (to eliminate the near-certainty of having to pay permanent alimony).
Rather than relying on the Florida legislature’s views on alimony, a premarital agreement provides the flexibility necessary to take into account the needs, wants and individual expectations of the parties to the marriage/
To protect children from earlier marriages in the case of death or divorce. Marriages with children from earlier marriages can greatly benefit from a premarital agreement. Even without expensive college bills and a large estate, the economic consequence of a divorce may severely interfere with being able to carry out pre-existing plans for children from earlier marriages.
To protect a family-owned business. If one party to the marriage works at and owns part of a family-owned business, the business itself, as well the income derived from the business, can be at risk in a divorce, as the result of equitable distribution and alimony. In a divorce proceeding without a prenuptial agreement in place, the other spouse would end up getting full access to the books and records of the business would be able to take the deposition of the key officers and employees of the business, and otherwise, put the business under a microscope. In the end, the former spouse could end up owning part of the business
To limit the rights of surviving spouses at death. Florida law gives a large bundle of benefits to a surviving spouse, including a minimum of 30% of the value of the estate (in the form of the elective share). The elective share applies to assets acquired during the marriage, as well as assets owned before the marriage. The elective share also covers inherited assets. A prenuptial agreement can eliminate the elective share and other spousal entitlements so that the spouse can receive a predetermined amount of assets at death. Florida law also gives surviving spouse rights to an existing Florida homestead property, in the form of a life estate or a 50% tenant in common interest in the property. A valid prenuptial agreement can contemplate and modify these rights.
To determine how the marriage is going to operate. Open communication in a relationship, before and after marriage, can be critical to the success of the marriage. Because a prenuptial agreement requires that issues be properly dealt with, it requires discussion and agreement of issues. For example, if the economically stronger spouse is going to continue to support young adult children and have an estate plan mostly in their favor, this should be identified before marriage.
To ensure that both parties are getting married for the right reasons. There are some people who do get married for economic reasons. Eliminating the economic uncertainty involved in a marriage can ensure that the marriage is being entered into for valid non-economic reasons.
To protect an inheritance in the event of death or divorce. For purposes of equitable distribution, inherited money is not really in play in terms of giving inherited assets to the non-inheriting spouse. But inherited assets can be considered in how to divide up the marital property, and inherited assets can also e considered in the award of alimony. By fixing the term and amount of alimony in a prenuptial agreement, entangling an inheritance with a divorce can be avoided. In case of death, inherited assets are treated just like any other asset. Therefore, in the absence of a prenuptial agreement, inherited assets are subject to spousal claims just like any other asset.