A year before their marriage, Decedent and Wife discussed making a prenuptial agreement and the subject was not again brought up until the day of their wedding. On the day of the wedding at 7:00 am Decedent woke Wife demanding her to find a prenuptial agreement online and sign it. Decedent told her that if she did not sign it, then they would not get married.
The wedding was taking place in Martha’s Vineyard, all the guests were there and “feeling pressured by the significant embarrassment of canceling the wedding the Wife reluctantly followed Decedent downstairs” and found a website with the form. Decedent drove Wife to a notary and they signed the prenuptial agreement (the “Agreement”) and married at 4:00 pm that day. It appears there was no disclosure of assets.
Four years later Decedent died intestate. Wife filed an action to void the Agreement, made an elective share election and petitioned for her intestate share. She also inquired as to whether Massachusetts law or Florida law applied as to the enforceability of the Agreement.
The children, at the lower court, won on the issue of fraud or duress and also that full disclosure of assets was not required under Florida law for the Agreement. The lower court also denied Wife’s argument that Decedent represented to Wife that the Agreement only applied at divorce and not death.
The children also argued that Wife was not coerced into signing “as verified by the notary’s affidavit filed in support of the motion stating that the notary did not indicate that anything unusual occurred when the prenuptial agreement was signed.” Startlingly (at least to this author), the lower court granted summary judgment on the issues of duress and coercion. Wife appealed.
In deciding that Florida law applied to the Agreement, the appellate court determined that the public policy exception should apply because protecting parties in marital agreements is a particularly important public policy, and, as discussed below, because the Florida homestead was an issue, the Wife and children stood to benefit in the Decedent’s homestead. Florida has a strong public policy to protect homestead and Florida has specific statutes regarding the waiver of homestead protection.
Wife argued that, even if the Agreement was valid, the Agreement did not apply to the Decedent’s homestead. Paragraph 2 of the Agreement stated “2. RESIDENCE. It is intention of the parties that the residence presently owned by [the decedent] located at 601 NW12street, Delray Beach, Florida shall not be affected by this Agreement (emphasis added)”. The same paragraph provided that Decedent would pay mortgage payments, real estate taxes and insurance premiums.
The children argued that the Agreement was unambiguous and Wife waived any interest in the homestead at Decedent’s death as paragraph 2 of the Agreement only applied during Decedent’s lifetime (because the expenses related to lifetime expenses). Paragraph 10 of the Agreement stated that each party had “no claim to any part of the real or personal property of the other. In consideration of such promise…each party…waives and relinquishes any right of … homestead…”
The appellate court agreed with the Wife’s interpretation that, by excepting out the homestead in paragraph 2, the homestead was not addressed in the Agreement. The court ruled against the children because the language “shall not be affected by the Agreement” would be superfluous, the listed expenses of the mortgage, real estate taxes and insurance premiums would be payable after the Decedent’s death and the listed expenses did not include maintenance expenses of the homestead (if the paragraph only applied during lifetime the maintenance expenses would be included). Thus, paragraph 2 applied after death. The case was remanded to the trial court to determine Wife’s interest in the homestead property.
ADVICE: This is a great example how online agreements, not reviewed by an attorney, can create unnecessary ambiguity and more expense and time. It is better practice to give the parties to a prenuptial agreement plenty of time to discuss with their attorney to avoid the duress and coercion arguments and to have an attorney draft these agreements to avoid ambiguity.
WORD OF THE WEEK: Lex loci contractus is a Latin term for “law of the place where the contract is made”. Thus, in this case, Massachusetts law would apply but for the public policy exception to such a rule.
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