The topic of nuptial agreements—whether a prenup or a postnuptial agreement—was previously a more sensitive topic amongst couples. Mainly, because it was typically one sided and aimed at protecting one partner’s wealth and assets. The agreement itself was not proposed with the intent of hurting the other spouse; but rather it was only relevant for purposes of protecting the more affluent of the two. However, times have changed. As a society, individuals are now marrying later in life. This delay in marriage not only results in educational degrees being acquired, and professions being established, but it is no longer the case that only one spouse is reaching these accomplishments. This results in a higher percentage of marriages wherein both individuals—not just one— may have financial interests to protect in the event the relationship ends in divorce. Below are three reasons why couples today might consider entering into these agreements.
1. Personal Business Ventures
In Florida, any and all assets (or liabilities) that are acquired during the marriage are considered marital property. In a divorce, and per Florida law, marital property is equally divided between parties. This includes business ventures that were begun during the marriage, as well as any increase in value or growth of a business venture that was begun prior to the marriage. The way to avoid this distribution to occur is to prepare either a prenuptial or postnuptial agreement in which the business venture is protected by being fully categorized as non-marital property. Therefore, in the event of a divorce, this asset will not be equitably divided between the parties because it was previously designated as non-marital property. This means that this asset solely belongs to the individual who’s on title with the other spouse having waived any and all interest in that particular asset.
2. A Partner’s Poor Financial Management
In Florida, all debts that are incurred during the marriage—with the exception of instances of dissipation— are considered marital debt that must be equitably divided between the parties in a divorce. Sometimes, individuals are surprised to find out that even though their bank and/or credit accounts are titled solely in their own name, and their finances are “separate”, this does not mean that they are not each responsible for debts that have been incurred during the marriage by their partner. Per Florida law, any debts incurred during the marriage are considered marital debt and therefore both individual’s responsibility. The only way to avoid being responsible for your spouse’s debt, is to enter into a prenup or postnup in which each spouse agrees to be solely responsible for any and all debt titled in their respective name. Therefore, in a divorce, where a prenup/postnup is in place, the unnamed spouse would not be responsible for a debt they did not specifically assume either in their sole or joint name.
3. Peace of Mind
Entering a marriage is one of the happiest times in a couple’s relationship. It is an exciting time in which two individuals become one and look forward to sharing in all experiences. That being said, it is also a time to be practical and pragmatic. Understanding the legal aspects of a marriage and what a divorce could entail is an appropriate exercise for any person about to embark on their marital relationship. If the laws associated with a divorce seem unfair or are such that result in a feeling of unease—couples can jointly obtain peace of mind by entering into an agreement that provides comfort and protection for both individuals.
If you or anyone you know has questions about pre or postnuptial and the benefits associated with these agreements, contact EHB Family & Collaborative Law to obtain more information.