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Prenuptial Agreements and Probate

Written by on Nov 19, 2008| Posted in: Estate Litigation

Fifth District Rules Plain Language Govern Interpretation of Ante-Nuptial Agreement

What is a Prenuptial Agreement?
A Premarital or prenuptial or antenuptial agreement means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage. The agreement typically speaks to issues relating to property and can involve virtually any interest or rights in any present or future real or personal property rights. Prenuptial agreements can also allocate rights and risks to the parties’ income and earnings, both active and passive.

What are the Formalities of a Prenuptial Agreement?

A premarital agreement must be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

What is contained in a Premartial Agreement? Parties to a premarital agreement may contract with respect to (a) the rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located (b) the right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property; (c) the disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event; (d) the establishment, modification, waiver, or elimination of spousal support; (e) the making of a will, trust, or other arrangement to carry out the provisions of the agreement; (f) the ownership rights in and disposition of the death benefit from a life insurance policy; (g) the choice of law governing the construction of the agreement.

So long as the parties don’t contract for something in violation of Florida’s public policy or a law imposing a criminal penalty, the parties can agree to just about anything they want with the exception that they cannot enter into an agreement that adversely affects the rights of a child to support.

A premarital agreement becomes effective upon marriage of the parties, and after marriage, a premarital agreement may be amended, revoked, or abandoned only by a written agreement signed by the parties.

My probate litigation practice frequently deals with issues involving challenges to the enforceability of a prenuptial agreement. These cases generally fall into the following categories: (a) One of the parties did not execute the agreement voluntarily; (b) the agreement was the product of fraud, duress, coercion, or overreaching; or (c) one of the parties was not provided a fair and reasonable disclosure of the property or financial obligations of the other party.

There is very little decisional case law in Florida governing the interpretation and enforcement of prenuptial agreements, so I was delighted to learn that the Florida Fifth District has provided practitioners and litigators with some clarity on the law of prenuptial agreements in its opinion released on November 14, 2008 in Herpich v. Estate of Herpich –So.2d –, 2008 WL 4889135, 33 Fla.L.Weekly D2653a. In this case, Mr. and Mrs. Herpich signed a prenuptial agreement that was made “in anticipation of marriage” on the day before their marriage. “Under the terms of the prenuptial agreement, the parties waived any right to property brought into the marriage by the other party or any property separately titled to the other party. The agreement also provided that “in the event of separation and reconciliation the parties understand that matters dealing with property division shall continue to be binding unless agreed to otherwise in writing.” [Emphasis added] The couple separated in March 2003 and divorced in early 2005. As part of the divorce proceedings, they executed a marital settlement agreement dividing all their marital assets.” Id.
Mr. and Mrs. Herpich remarried only six months after their divorce, and Mr. Herpich died, with Mrs. Herpich as his spouse, but without a will, just two years later. Mrs. Herpich asked the probate court for her family allowance (in Florida a surviving spouse can ask the court for up to $18,000.00 out of the estate as an allowance, and can also ask for homestead property and exempt property-discussed in my blog entry of November 14, 2008 Exempt Property and Pretermitted Spouses) and Mr. Herpich’s children objected, arguing that the prenuptial agreement prevented Mrs. Herpich from receiving an allowance or any part of Mr. Herpich’s estate.

Mrs. Herpich’s children argued that the prenuptial agreement remained valid and binding even after Mr. and Mrs. Herpich divorced and remarried because the terms “separation and reconciliation” encompass “divorce and remarriage.” Therefore, the children argued agreement was still effective and Mrs. Herpich was barred from making a claim upon Mr. Herpich’s estate.

Mrs. Herpich disagreed. She argued that the words “separation and reconciliation” do not encompass the terms “divorce and remarriage.” She argued that that the plain meaning of “separation and reconciliation” is distinct from “divorce and remarriage.”

The case worked its way through the system, and finally was heard by the Fifth District Court of Appeals, who noted that as a general proposition, a prenuptial agreement does not survive divorce, because the agreement is terminated upon divorce. The Court examined the language of the agreement between Mr. and Mrs. Hertich which stated that in “the event of separation and reconciliation the parties understand that matters dealing with property division shall continue to be binding unless agreed to otherwise in writing.” The Court found that this language was clear and unambiguous and that the common meaning of “separation and reconciliation” connotes a situation where a married couple decides to live apart for a period of time and recommences to cohabitate; as opposed to the childrens’ argument, which would have the language include a legal termination of the marital relationship.

Hats off to the Fifth District for its plain meaning interpretation of the contract language. However, there was no mention of who drafted the agreement. Had there been a finding that the language was vague or ambiguous, then the law in Florida requires that the Court view the language against the drafter of the agreement.

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