What is a Post-Nuptial Agreement?
A post-nuptial agreement is a contract entered into by a married couple that comes into effect during their marriage. It typically addresses how assets and debts of each spouse will be handled in the event of a divorce. In the event the parties separate or divorce, it is enforceable in a Florida court, although it would need to be ratified as part of the dissolution of marriage process.
Post-nuptial agreements are not the same as prenuptial agreements. Prenuptial agreements are made prior to marriage and post-nuptial agreements are made after legally spending time as husband and wife. The key difference between the two is the nature of consideration. There has to be some sort of consideration (something of value) in a contract in order for it to be binding. When you enter into a contract before marriage, the consideration is the marriage itself. However, if a couple is already married, that consideration is not enough. Most commonly, the consideration for a post-nuptial agreement is a change in marital status. For example, if the parties exemplify a significant change in their finances that will impact the outcome of a divorce agreement, they may wish to discuss a post-nuptial agreement.
There could also be other situations where a post-nuptial agreement may be appropriate . For example, if a couple is experiencing marital problems, one spouse may not be ready to divorce. However, understanding that a divorce may be the future, the couple may wish to put a post-nuptial agreement in place to protect assets in the event the marriage does not last. Other couples may have recently inherited or purchased property, which they may want to protect in the event of divorce. Or if a spouse is receiving funds from a financial windfall, this may also be the right time to create a post-nuptial agreement.
One point to keep in mind is that post-nuptial agreements are not always successful. This is because if a spouse files for divorce and the other spouse learns that a post-nuptial agreement exists, that spouse may feel pressured to sign a ratification of the agreement, if doing so would provide that spouse with certain benefits that he or she would not otherwise be entitled to. In the event a lawsuit is filed and one spouse has filed a motion to enforce a post-nuptial agreement, the judge will inquire into whether the agreement was entered into voluntarily and either spouse had adequate legal counsel. The judge will also determine if the terms of the agreement are unconscionable or unfair—considering all factors.
Legal Requirements in Florida
To be legally enforceable in Florida, a post-nuptial agreement must meet certain requirements. First and foremost, both spouses must enter into the agreement voluntarily and in good faith, free from fraud or undue influence. Additionally, one spouse cannot be prohibited from seeking independent legal counsel before deciding whether to sign the document. However, the agreement may still be enforceable if this requirement is not met.
Further, the post-nuptial agreement must be in writing, signed by both spouses, and include appropriate notarization to prove its validity. No particular form language is required. Yet, the agreement must contain fair financial disclosure by each spouse. Specifically, if one spouse obscures his or her assets and liabilities, the agreement may be unenforceable. Fair financial disclosure requires knowledge of the material facts of the other spouse’s financial situation as necessary for him or her to make an informed decision about the transaction.
Under Florida Statutes, Chapter 61.079, [insert link], any post-nuptial agreement executed after October 1, 2013 must also contain a specific statement signed by both spouses indicating that the party signs it voluntarily and without coercion, fraud, or duress. Additionally, according to the Turner v. Turner, 244 So.3d 469, 471-72 (Fla. 3d DCA 2018) requiring more than the checklist described in the statute would defeat its legislative purpose. But such requirements are not enforceable to events that occurred prior to October 1, 2013.
Benefits of Post-Nuptial Agreements
Post-nuptial agreements in Florida function in largely the same way as pre-nuptial agreements, but they are completed after marriage. Both pre and post-nuptial agreements are enforced in Florida as long as they do not contain conditions for divorce, are not unconscionable, and were entered into voluntarily. Additional criteria that must be met for a post-nuptial agreement to be enforceable include:
Their ability to be customized and tailored to meet the needs of the parties and their circumstances is what makes them a valuable option in Florida.
For couples that decide to enter into a post-nuptial agreement, the initial question is how it can benefit the marriage. That really should not be the first question. The question should be how it could benefit the couple if they were to one day divorce. They are designed to address matters related to divorce so that the post-nuptial agreement can be referenced during the divorce as part of the evidence that is used to reach a determination. They cannot be legally enforced during the marriage. They are however, a good communication tool for couples to use to ensure that they are on the same page regarding issues such as debt, estate planning and finances.
As with a pre-nuptial agreement, a post-nuptial agreement can offer the benefit of financial protection with regard to assets that belong solely to one spouse, while protecting the other from incurring debt. They provide a legal framework for dividing debt and can also prevent disputes arising from many other common issues such as spousal and child support, alimony, property, debt division and child custody.
In the case of a high asset marriage, there may be a significant amount of wealth that belongs to only one spouse. Since Florida is not a community property state, it can be difficult to make certain that all wealth that is created by one spouse is protected in the event of a divorce. A post-nuptial agreement can address this issue and specify that the wealth that is owned by only one spouse at the time of the post-nuptial agreement signing will remain the property of that spouse during the marriage and in the event of divorce. For those who decide to create a post-nuptial agreement, it can quite literally be insurance for a future divorce.
Common Conditions in Florida Post-Nuptial Agreements
Post-nuptial agreements in Florida typically contain clauses that specify how property will be divided upon divorce or death, spousal support (also known as alimony), and debt responsibility. While these agreements are not meant to divide marital assets or alimony, they often contain clauses spelling out terms of how assets should be divided if a later divorce occurs. When it comes to alimony or spousal support, many clauses address alimony amounts, whether there should be a waiver of alimony, and the duration of support. Contracts may also limit or reduce the duration of the marriage that would be required to receive permanent alimony in the future.
Regarding debts, many post-nuptial agreements include provisions determining the responsibility for paying down credit card bills, mortgages, and car payments. While provision of post-nuptial agreements should not be overly one-sided, it is important to have specific language that covers areas of concern so that the specific intentions of the parties are clear. Pursuant to Florida Statute 61.058, if a divorce action is filed, the courts will often look to the contract to apply to marital assets and liabilities in the absence of any other agreement between the parties which is consistent with the terms of the prenuptial agreement.
Pitfalls and Limitations
Despite their unique benefits, post-nuptial agreements in Florida can also be fraught with pitfalls for the unwary. Over the years, the courts have identified a number of factors that can lead to the invalidation of a post-nuptial agreement. When drafting any prenuptial or post-nuptial agreement, it is critical for the attorney to ensure that the agreement meets these minimum requirements.
Evidentiary Findings
Even if a post-nuptial agreement is not subject to the above statutory format requirements and evidentiary findings, there are still a number of hurdles that a party must meet in order to secure a favorable outcome in the event of a divorce. The court will certainly examine whether the agreement is fair, reasonable and just, and whether the party against whom the agreement is being enforced had full knowledge of the financial standing of the other party at the time the agreement was executed . Additionally, the court may invalidate an agreement if it was unconscionable at the time it was executed, and if the spouse did not have full and fair knowledge of the other spouse’s assets and liabilities at the time of execution. If the signing spouse was unduly coerced, misled, or pressured to sign the agreement, the court may find a reason to invalidate it.
Conclusions
While the above factors are only a few of the issues that should be addressed when drafting any post-nuptial agreement in Florida, it is clear that the potential for post-nuptial agreements is far greater than it once was, and the second (and often overlooked) prong of the statutory rules regarding post-nuptial agreements provides exciting new opportunities for married couples to further enhance and solidify their marital estate within Florida.
How to Create a Florida Post-Nuptial Agreement
The process for creating a post-nuptial agreement starts with each party identifying his or her goals, and then bringing those to a legal representative. Because these agreements are legally binding, Florida requires counseling for both parties from independent legal counsel. It is recommended that you do not use the same attorney for both yourself and your spouse, as this can create an ethical conflict of interest.
Next, formulating the post-nuptial agreement will generally begin with the exchanging of documentation. Each party should be prepared to provide thorough and complete responses regarding their assets and finances, such as bank and stock statements, the deed for marital real estate, and other information that relates to their income and portfolios. Be prepared to be open and honest when discussing the financial situation with your attorney, as a post-nuptial agreement that is deemed to be unfair to either party may later be disregarded in full by the court.
The next step in the process is the drafting of the agreement. A post-nuptial agreement in Florida requires the acceptance and understanding of both parties. There are a number of Florida statutes that govern what a post-nuptial agreement must include in order to be valid, so your attorney will use the documents they have gathered to ensure the agreement covers all of these requirements.
It is recommended that each party seek a consultation with an independent legal counsel before signing the agreement that has been drafted. After the review, both parties will need to sign the agreement, as well as a notarization from a witness.
When to Seek Revision of an Agreement
A post-nuptial agreement is not set in stone and, in fact, should be closely re-evaluated as a couple goes through the various stages of their relationship. Often, a couple chooses to begin developing a post-nuptial agreement when they are going through or anticipating business challenges that could affect their marital estate – but that’s not always the end of the matter. Even if a couple had no issues that they felt needed to be addressed when they executed a post-nuptial agreement, things can change . Children may come along, either the natural addition to the family or through adoption. Real property may be acquired that requires new valuation due to market conditions. A spouse may change jobs—resulting in a change in future income. Or, a new business may be started or acquired that ultimately has a material impact on the viability of the original post-nuptial agreement. Change is constant; so too, should be an ongoing review of your protections under your existing post-nuptial agreement.