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A premarital agreement is an enforceable contract that is entered into between two parties prior to their marriage, which typically provides how the parties’ property will be divided and/or whether either spouse shall receive alimony in the event of a divorce. In order for a premarital agreement to be valid, it must be freely and voluntarily entered into by both parties after each party has fully disclosed all of his or her income and assets to the other party.

A premarital agreement can be set aside if one of the following grounds exists: (1) the agreement was executed under fraud, deceit, duress, misrepresentation, coercion, or by overreaching; and/or (2) the agreement is unfair or unreasonable due to the fact that one spouse concealed information regarding his or her finances prior to the execution of the agreement.

Full Disclosure Prior to the Execution of a Premarital Agreement

Under Florida law, full disclosure does not require a party to provide his or her prospective spouse with an accounting detailing the exact value of his or her assets. Instead, a party is deemed to have fully disclosed his or her financial status when he or she has provided his or her prospective spouse with “general and approximate knowledge” of the “character and extent” of his or her property and income. See Waton v. Waton, 887 So. 2d 419, 424 (Fla. 4th DCA 2004). Full disclosure requires that each party provide information that would enable the other party to comprehend the nature and amount of his or her prospective spouse’s income and property so that each party is able to make an informed decision as to whether or not to accept the proposed terms of the premarital agreement.

It is important to note that, in the absence of full financial disclosure, a premarital agreement is enforceable in a dissolution of marriage proceeding if the spouse that is challenging the premarital agreement possessed independent knowledge of the income and assets of his or her prospective spouse at the time the premarital agreement was executed. To be safe, we recommend disclosing more than what Florida law requires. Our premarital agreements attach a sworn financial affidavit and the last 3 years of tax returns, as well as, any supporting documentation that evidences the value of any asset or debt. These disclosures provide the purported spouse from any future claim by the non-purported spouse as to nondisclosure or concealment.

Voluntary Execution of a Premarital Agreement

When full financial disclosure has been made to each party, a premarital agreement will be enforceable so long as the agreement was freely and voluntarily entered into by both parties. On the other hand, if a premarital agreement was the product of fraud, duress, coercion, or overreaching, the agreement is not enforceable against the party who was defrauded and/or coerced into executing the agreement. Coercion may be deemed to exist if one party threatens to cancel the wedding if the premarital agreement is not signed prior to the wedding. Similarly, the presentation of a premarital agreement less than 24 hours before the wedding may also be deemed coercive. See Bakos v. Bakos, 969 So. 2d 522, 525 (Fla. 4th DCA 2007).

Postnuptial Agreements

A postnuptial agreement is a contract that spouses can enter into at any time during their marriage. Postnuptial agreements are typically entered into by spouses who intend to remain married to each other but seek to enter into a legally enforceable contract which addresses how the parties’ property will be divided, and whether either spousal support will be provided to either party in the event that either party subsequently files for divorce.

As with a premarital agreement, a postnuptial agreement must be freely and voluntarily entered into by both parties after each party has fully disclosed all of his or her income and assets to the other party in order for the agreement to be enforceable

Donative Intent and Premarital Agreements

Many premarital agreements provide that each party’s premarital assets and any appreciation of those assets shall constitute non-marital assets that are not subject to equitable distribution in the event of divorce.  The parties to the recent Supreme Court of Florida decision of Hooker v. Hooker executed a premarital agreement which contained this language; however, despite the existence of the agreement, the Supreme Court held that two of the Husband’s premarital properties constituted marital property subject to equitable distribution upon the dissolution of the marriage.  The Supreme Court reached this holding after finding that there was “substantial competent evidence” of Husband’s intent to make an interspousal gift of his premarital properties to his Wife.  

One of the premarital properties at issue in the case was the parties’ marital residence in Wellington, Florida [hereafter the “Homestead Property”].  The finding that there was substantial competent evidence of Husband’s intent to make an interspousal gift of the Homestead Property was based on testimony that the Wife “treated” the Homestead Property as her own and evidence that the Wife signed the deed to transfer title to the Homestead Property.  Specifically, the Supreme Court noted that:

Only … Husband was listed as the seller, but both parties signed the warranty deed transferring title of [Hickstead] to [Hooker Hollow].

The Supreme Court’s consideration of Wife’s signature on the deed as evidence of the donative intent is puzzling because, pursuant to the Florida Constitution, if a homeowner is married, he or she cannot transfer the homestead without the signature of his or her spouse – even if the homestead property was purchased prior to the marriage.   

The Hooker decision highlights the importance of ensuring that interspousal gifts are clearly addressed in premarital agreements as failure to do so may result in premarital assets being subject to equitable distribution.

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