A prenuptial agreement is an agreement between two people to be wed, that deals with the financial consequences of their marriage ending.
All marrying couples have a “prenuptial agreement” – it is known as “divorce law,” and it depends upon the state in which the divorce is to take place. However, a lot of people are unhappy with the way divorce law works, and prefer to take control of their lives, rather than leave it in the hands of the government.
Getting a prenuptial agreement is particularly important in Florida, due to the protections the State affords to spouses and ex-spouses, as the case may be.
Although a prenuptial agreement may never be necessary, it is an indispensable agreement to have in place for the following reasons:
1. There is a significant financial disparity between the spouses.
2. If you plan to quit your job to raise children. Quitting your job will negatively impact your income and your wealth. A prenuptial agreement can ensure that the financial burden of raising the children is shared fairly by both partners.
3. You own part (or all) of a business. Without a prenuptial agreement, when your marriage ends, your spouse could end up owning a share of your business. Your business partners may not want this to happen. A prenup can ensure that your spouse does not become an unwanted partner in your business.
4. A spouse plans on remarrying. When a spouse remarries, the legal and financial concerns are often very different than in the first marriage. There may be children from a previous marriage, support obligations, and a home or other significant assets at stake. A prenuptial agreement can ensure that when you pass away, your assets are distributed according to your wishes, and that neither your first family, nor your new family are cut off.
5. To prevent your spouse from overturning your estate plan. A prenuptial agreement can ensure that your estate plan works, and, for instance, ensure that a specific heirloom remains in your family, or that family inheritances remain within the designated beneficiaries.
Points 4 and 5 are principally significant here in the State of Florida, given Florida’s elective share. Florida’s elective share is a broad and encompassing option under the Florida Statute that allows the surviving spouse to bypass his/her widow/widower’s will and elect to take a percentage of the widow/widower’s estate. It is essentially almost impossible to disinherit a spouse in Florida. Florida’s elective share allows the surviving spouse to take 30% of the decedent spouse’s estate. If there are not sufficient assets to satisfy the elective share, the surviving spouse may even be entitled to have the share satisfied through property transferred by the decedent to the extent that at the time of his or her death (a) the decedent possessed the right to, or enjoyed the possession of, the income or principal from the property, or (b) the principal of the property could be distributed or appointed to or for the benefit of the decedent in the discretion of the Trustee.
As such, even in situations where a prenuptial agreement would seem pointless, it could prove beneficial in the long run. What is more, a prenuptial agreement is revocable and modifiable and can always be changed to reflect the parties’ current requirements.