Be Careful with Prenuptial Agreements!
The drafting of a prenuptial agreement is a very complicated process. You should always have legal advice. Generally (not always) a family law attorney will draft such an agreement with the help and advice of an experienced estate planning attorney.
In a recent Florida Supreme court case, Hahamovitch v. Hahamovitch, the Court decided a conflict between Florida Circuit Courts and determined whether the language in a prenuptial agreement was specific enough to prevent a wife from claiming an equitable interest in her husband’s assets that were acquired or enhanced during the marriage with marital labor or earnings (“Husband’s Marital Labor Assets”).
Diane and Harry entered into a prenuptial agreement prior to marriage on January 20, 1986. The Prenuptial Agreement provided in part:
Except as otherwise provided for herein, in the event either of the Parties hereto institutes legal proceedings for dissolution of marriage DIANNE hereby waives and releases, and is hereby barred from any and all rights and claims of every kind, nature and description that she may acquire or to which she may be entitled under the laws of any jurisdiction as a result of the marriage between the Parties, in and to any of HARRY’s property,including, but without intending thereby to limit the generality of the foregoing, any and all right to alimony, either lump sum, rehabilitative, permanent, or otherwise, support and maintenance,equitable distribution, division of property,special equities, attorney’s fees, or any other rights that DIANNE may have against HARRY relative to financial issues.
RETENTION OF SOLE PROPERTY
Except to the extent that the Parties may otherwise desire, HARRY and DIANNE shall,during their respective lifetimes, keep and retain sole ownership,control, enjoyment and power of disposition with respect to all property, real, personal or mixed, now owned or hereby acquired by each of them respectively, free and clear of any claim by the other.
In consideration of the marriage of the Parties to each other, and in consideration of the other provisions herein contained, each party agrees that neither will ever claim any interest in the other’s property and that the property of every kind, nature and description which either one has on the date of the marriage will remain the respective separate property of each after said marriage, and each agrees not to make any claim against the property of the other.
It is additionally understood that if HARRY purchases, acquires, or otherwise obtains, property and title to said property is in HARRY’s name with DIANNE and no explanation is made as to the percentages of interest that either party has, then it shall be presumed that they shall be 50% 50% owners of said property. If HARRY purchases, [a]cquires, or otherwise obtains,property in his own name, then HARRY shall be the sole owner of same. If DIANNE purchases property in her name, then DIANNE shall be the sole owner of same.
The issue in Hahamovitch was whether the above language was specific enough to prevent Dianne from claiming an equitable interest in her Husband’s Marital Labor Assets. In Irwin v. Irwin and Valdes v. Valdes, the courts held that when a prenuptial agreement includes broad provisions but does not specifically waive a spouse’s claim to the other spouse’s earnings, assets acquired with those earnings, and the enhanced value of the other spouse’s property which result from marital labor or funds, then the prenuptial agreement is NOT sufficient to waive a spouse’s right to seek equitable distributions. Thus, Dianne would have been successful under Irwin and Valdes.
The lower court decision in Hahamovitch, however, disagreed with Irwin and Valdes, ruled against Dianne and certified the following question to he Florida Supreme Court.
“Where a prenuptial agreement provides that neither spouse will ever claim any interest in the other’s property, states that each spouse shall be the sole owner of property purchased or acquired in his or her name, and contains language purporting to waive and release all rights and claims that a spouse may be entitled to as a result of the marriage, do such provisions serve to waive a spouse’s right to any share of assets titled in the other spouse’s name , even if those assets were acquired during the marriage due to the parties’ marital efforts or appreciated in value during the marriage due to the parties’ marital efforts? ”
The Florida Supreme Court answered YES, the language was sufficient to waive Dianne’s interest in the Husband’s Marital Labor Assets. The Court pointed to the “broad language” which includes the waiver and release of all rights and claims to the other spouse’s non-marital property. Thus, Dianne was not successful and could not claim an equitable interest in Husband’s Marital Labor Assets.
ADVICE: When preparing or reviewing a prenuptial agreement it is best to be as specific as possible. However, this Florida Supreme Court case is very favorable in allowing broad language to encompass the specific language. It appears that the language used in the Hahamovich decision may be the form to use.
New Word of the Week: Appellee vs. Appellant. When a party wants a court decision to be reviewed by an appeals court, the appellant is the party making the request for the review. The appellee is the party in whose favor the lower court decision was rendered. . If the case is affirmed by the appeals court, then the appellee is successful. If the lower court decision is reversed by the appeals court, then the appellant is successful.
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