Category: Agreements

Can a Prenuptial Agreement Make You Smile More

Something to make you smile more or less, Amazon founder, Jeff Bezos, did not have a prenuptial agreement when he divorced his first wife, MacKenzie Scott. While his divorce cost him $38 billion, some argue his net worth would hover around $288 billion today. If celebrity net worth lists don’t interest you, the importance of having a prenuptial agreement should.

Amazon prenup

Prenup Prime

At the time of his separation with Scott, Bezos was the wealthiest individual globally, with a net worth of $150 billion, primarily due to his 16 percent ownership in Amazon. Bezos’s divorce is considered a significant shift in the distribution of wealth at the pinnacle of global affluence. That’s because the distribution of the Bezos fortune at the time of the divorce was practically unprecedented in size.

As of February, Jeff Bezos’ wealth is estimated at $191 billion, positioning him near the top of the list of the world’s richest people. Embarrassingly, Bezos is rumored to rank behind Tesla Inc. CEO Elon Musk, whose net worth is $199 billion.

The Musk ranking comes with a caveat. A recent legal decision invalidated $56 billion in options Tesla awarded Musk in 2018, potentially affecting his net worth and standing.

Despite this, Musk’s financial status remains unchanged because of the possibility of an appeal. Both men trail behind Bernard Arnault and his family, who oversee LVMH, with a net worth of $217.6 billion.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are about more than just resolving uncertainty in a marriage.

When a spouse is a major shareholder of company, their wealth can be subject to wide price swings. For example, when the head of Continental Resources was getting divorced, shares of his company dropped 2.9%. Conversely, when Rupert Murdoch announced his divorce, shares of News Corp gained 1.4%. Why? Because in Rupert Murdoch’s case, the divorce announcement stressed his prenuptial agreement, and a divorce would have “zero impact” on the company

A prenuptial agreement (or “prenup” for short) is a contract between people intending to marry. A prenup determines spousal rights when the marriage ends by death or divorce. This can be especially important in second marriages.

If you divorce without a prenup, your property rights are determined under state law, and a spouse may have a claim to alimony while the suit for divorce is pending and after entry of a judgment.

That’s where prenups come in. Prospective spouses may limit or expand state laws by an agreement. Prenups are also used to protect the interests of children from a prior marriage, and to avoid a contested divorce. Prenups can be a reliable guide down rough rivers if they’re done right.

Prime Deals

According to Yahoo! Finance, an intriguing “what if” regarding Bezos’s billionaire ranking develops had he not divorced without a prenup. Before their divorce, Bezos’s 16 percent stake in Amazon was valued at $150 billion.

Following the divorce and subsequent financial decisions, including significant sales of Amazon stock to fund his Blue Origin space venture, Bezos’s share in the company decreased to approximately 10%. These transactions, coupled with the divorce settlement that transferred a 4% stake in Amazon to Scott, have substantially altered Bezos’s potential net worth.

Despite all of that, had Bezos maintained his full share in Amazon, without the divorce, and without liquidating portions of his stock, and without funding Blue Origin, his wealth might have been higher. Given that Amazon’s market cap is now around $1.8 trillion, a 16 percent stake would equate to $288 billion.

Now imagine how much different – and better – his life would have been if he’d only had a prenup?

The Yahoo! Finance imaginary calculation of the Bezos fortune surpasses the wealth of other billionaires, including Musk, Zuckerberg, Gates, and Arnault. Although purely hypothetical, the Yahoo! Finance analysis highlights the importance of having a prenuptial agreement.

The Yahoo! Finance article is here.

When a Prenuptial Agreement Fails

If marriage is a business relationship, a prenuptial agreement is like the incorporation documents. But what happens if during your marriage you find out the prenuptial agreement you paid for fails? For one woman, the results of a prenup fail could mean the loss of her entire inheritance.

Prenup Fails

Protecting Your Assets

After you and your spouse get married, ‘what’s theirs is yours, and what’s yours is now theirs.’ Unless you get a prenup. A prenuptial agreement is a written document between prospective spouses thinking about marriage. A prenup becomes effective upon marriage.

What can you put in a prenup? There are few limitations, but you can agree on your rights to any property either you or your spouse have or will have, who can manage and control the property, and what happens to property in the event of death or divorce. You can also agree to alimony, or to waive alimony,  and many other issues that do not violate some public policy or criminal law.

There are two things she advises before getting married: (1) buy separate comforters for your bed, and (2) get a prenuptial agreement that fully protects you – even if you don’t think your assets are worth much. Without a prenup, you might learn you’re not be protected the hard way.

In the article, the reporter got married right out of graduate school and had no job. Her assets consisted of a used car, a cat, and an inheritance she kept in a trust fund. Her future husband had no assets, but was planning to go to dental school which had a hefty price tag. The Wife’s prenup ensured that her trust fund could not be used to pay for his graduate school tuition.

Notwithstanding her prenup though, during the marriage, the wife used her trust fund monies on their living expenses. Then she decided to ignore the prenup entirely. She used all of her premarital inheritance as a down payment on a marital home. Then she titled the house in both names. Then she also agreed her husband’s salary would pay the mortgage and most other bills related to “their” home.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are not just for the rich and famous. Anyone who brings assets, or a large inheritance, into their marriage can benefit from a prenuptial agreement.

Prenups are important to have in place before a married couple starts investing in businesses, properties, and other investments.

But there can be ‘prenup fails’ too. In addition to being completely ignored, prenups can also be challenged in court. Florida has both case law and a statute to help lawyers, judges, and the parties determine if a prenuptial agreement is enforceable. For example, Florida adopted the Uniform Premarital Agreement Act.

The UPAA is a statute that requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Couples wanting to sign a prenup can enter into an agreement with respect to their rights and obligations in any of their property. Whenever and wherever property was acquired or where it is located; couples can control their right to buy, sell, use, transfer, or otherwise manage and control their property if they separate, divorce, or die.

When ruling on the validity of a prenup, Florida courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure. While prenuptial agreements may be challenged in court, we will have to wait and see if the court will invalidate Costner’s prenuptial agreement.

A Messed-up Prenup?

After seven years, the husband informed his wife that he wanted a divorce. He also wanted to sell their jointly owned house and split the profits equally. Without a house though, the wife couldn’t qualify for a mortgage on a new home, and all of her premarital inheritance money was now tied up in a marital home she had to split with her soon to be ex.

When the wife contacted her lawyer to enforce her prenuptial agreement, and get back the deposit she alone paid for in their joint home, she learned the hard way her prenup would not help her. Why? Because she’d spent her inheritance on a marital home titled in both of their names. Her prenup only protected her trust fund money from being spent on paying off her husband’s student loans.

The couple came to an agreement, which was fleshed out over the next few weeks by their lawyers. They sold the house, and the wife got enough money from the sale of her marital home to pay for rent – with the help of alimony.

She was officially divorced by the end of the year, but she found out the hard way her prenup failed to protect her because she ignored it. The wife could have protected her inheritance in several ways: not putting the home in joint names, or amending her prenuptial agreement to decide how her down payment would be treated in a divorce.

Instead, she learned a few lessons. Her advice now is: “Get a prenup.”

The Business Insider article is here.

Yellowstone S5 E1 Dances with Prenups

Like an episode of Yellowstone, Kevin Costner and his estranged wife Christine Baumgartner are in court fighting over the validity and enforceability of the kind of agreements many celebrities sign before their marriage: prenups.

Yellowstone Prenup

“We’re enemies now”

Costner and Baumgartner have already battled it out over custody and living arrangements with Baumgartner being forced to move out of the family home by July 31. Now the issue is the validity of the prenup. Although not reported in the Costner divorce, some people insist on putting unique clauses in their agreements.

Some couples have ‘anti-cheating’ clauses for instance. An anti-cheating clause tries to penalize a spouse for having an affair. There are also requests for clauses such as the one requiring that a spouse have sex on demand, or one in which a spouse must maintain a certain weight to remain in compliance with the prenup.

These sort of morality and other provisions are not really enforceable and may even violate public policy. Some of the things you can do to make sure your prenup is enforceable is to make sure that the agreement is fully negotiated, both parties have an opportunity to hire a lawyer, and that full financial disclosure is exchanged.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are not just for cowboys on the Yellowstone. Anyone who brings personal or business assets into their marriage can benefit from a prenuptial agreement. Prenups are important to have in place before a married couple starts investing in businesses, properties, and other investments.

But prenups can be challenged in court too. Florida has both case law and a statute to help lawyers, judges, and the parties determine if a prenuptial agreement is enforceable. For example, Florida adopted the Uniform Premarital Agreement Act. The UPAA is a statute that requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Couples wanting to sign a prenup can enter into an agreement with respect to their rights and obligations in any of their property. Whenever and wherever property was acquired or where it is located; couples can control their right to buy, sell, use, transfer, or otherwise manage and control their property if they separate, divorce, or die.

When ruling on the validity of a prenup, Florida courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure. While prenuptial agreements may be challenged in court, we will have to wait and see if the court will invalidate Costner’s prenuptial agreement.

“You are the trailer park. I’m the tornado”

A prenup also has the unintended consequence of forcing people to talk about money before they start their marriage. It is difficult to have conversations about ‘what if’ we break up or one of us dies during marriage”, so couples tend to avoid discussing important questions. Only after people are married do spouses learn each other’s financial expectations. A prenup negotiation gets all that into the open up front.

Divorce attorneys add that some people might not marry after understanding their partner’s financial expectations – like sharing property owned before the marriage equally, and more. Jessica Simpson, who did not sign a premarital agreement when marrying Nick Lachey, later regretted her decision:

“I wish I would have signed a prenup and that’s the funny thing is that Nick wanted me to sign a prenup, but I was, like, so offended. I was like, ‘We’re going to be together for the rest of our lives. We’re saying our vows to God and in front of all of our family and friends. Like, this never gonna end.’ And, we didn’t sign a prenup.”

The reasons for signing a premarital agreement can vary, from a strong distrust that marriage can truly last a lifetime, to the need to control a partner, or simply good planning for the protection of both spouses. Prenups can be complex too. However, prenups can also be a major advantage when it comes to keeping lives in order in the event of divorce.

The Fox article is here.

Celebrities and Prenuptial Agreements

The news from Nashville is that academy award winning actress, Reese Witherspoon, has initiated divorce proceedings against her husband Jim Toth. The divorce announcement is a reminder that prenuptial agreements are not only for protecting celebrities.

Prenuptial agreements

Not So Clueless

Reese Witherspoon is a very successful actress, and winner of an Academy Award, a British Academy Film Award, a Primetime Emmy Award, and two Golden Globe Awards. She ranks among the world’s highest-paid actresses. Witherspoon also owns Hello Sunshine, a media company she started during the marriage with Strand Equity Founder and Managing Partner Seth Rodsky.

Witherspoon has confirmed the couple’s 11-year marriage is ending in divorce. According to court documents, she has cited irreconcilable differences as the reason behind the divorce. The divorce was filed in a circuit court in Nashville, where the couple live with their 10-year-old son.

Reports indicate that court documents she filed reveal that the couple signed a prenuptial agreement in March 2011. In the court documents, Witherspoon alleges that the prenuptial agreement is valid, and that their prenup will provide “adequate and sufficient provisions” for the distribution of their assets and debts.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are not just for celebrity, academy award winning actresses. They are also about more than just resolving what to do with a successful media company created during a marriage.

Any couple who brings any personal or business assets to their marriage can benefit from a prenuptial agreement. They are important to have in place before a couple starts investing in businesses, properties, and other investments.

But prenups are frequently challenged in court. Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement is enforceable. For example, Florida adopted the Uniform Premarital Agreement Act. The Act requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Couples wanting to sign a prenuptial agreement can enter into a premarital agreement with respect to their rights and obligations in any of their property. Whenever and wherever property was acquired or where it is located; couples can control their right to buy, sell, use, transfer, or otherwise manage and control their property if they separate, divorce, or die.

While prenuptial agreements may be challenged in court, we will have to wait and see if Witherspoon’s husband will try to avoid their prenuptial agreement. When ruling on the validity of a prenup, Florida courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure.

Divorce in Pleasantville

In court documents, in addition to alleging the couple has a prenuptial agreement in place, Witherspoon also asks the court to designate her and Toth as joint custodians of their 10-year-old son. Witherspoon and her CAA talent agent husband announced their divorce in a joint statement, just days before their 12th anniversary.

They announced personal news to share. They also stated it was with a great deal of care and consideration that they have made the difficult decision to divorce. They mentioned they have enjoyed so many wonderful years together and are moving forward with deep love, kindness and mutual respect for everything they have created together.

“Our biggest priority is our son and our entire family as we navigate this next chapter. These matters are never easy and are extremely personal. We truly appreciate everyone’s respect for our family’s privacy at this time.”

The People article is here.

Marital Settlement Agreements and Vital Organs

Negotiating for your vital organs is not a part of any martial settlement agreement. However, for one Israeli woman, donating her kidney to save the life of her children’s father, her ex-husband, was a choice she made above and beyond her contractual responsibilities.

Marital Settlement Agreement Kidney

Eilat of Love

Although the ex-wife, Adel, has been divorced for nearly ten years, her divorce and the terms of her marital settlement agreement, did not stop her from donating a kidney to her former husband when she found out his health condition had worsened.

The 41-year-old Rosh Pina resident said in an interview with fashion magazine, Laisha, that she and her spouse have been divorced for nine years, but she did not hesitate to answer the call for help – not least because of the children, of whom the two share custody.

“When I woke up after the surgery, there was some manageable pain. A week later I still feel it, yet anxious to go back to being the Mitzpe Shalom resort manager in the Golan Heights.”

She was aware of her ex-husband’s kidney problems when they met. She states she was 24 at the time and he was 29. He was an accountant and had already been donated one kidney from his mother. He told me right away, but I didn’t care. When I was pregnant with our second child, his father donated another kidney. Seven years later we got divorced. The second kidney held up for 11 years, up until six months ago.

After their divorce their relationship was complicated. But in the last few years things improved:

 We’re both involved with other people now. His girlfriend is wonderful and so is my boyfriend. His name is Eitan, and I told him when we met that if there was a time my ex would need my kidney, he’ll have it. Eitan accepted it right away.

Her ex-husband tested positive for COVID eight months ago and required dialysis and a new kidney. The woman told her ex-mother-in-law, that it was her turn to step up for him. It was very emotional.

Without informing him, she began moving things along. When it was clear she was a match, they informed the kids and then her ex-husband. “He thanked me, but was also concerned about who will attend to the kids while we’re both in surgery.”

Florida Marital Settlement Agreement

I have written about people donating vital organs to their ex spouses before. Erica Arsenault, of Massachusetts, volunteered to donate a kidney to her former mother-in-law years after her divorce. But donations of vital organs are not terms you see in a marital settlement agreement. Donations go beyond the requirements of an agreement.

Most family law cases are resolved by agreement, not by trial. A Marital Settlement Agreement is the method to resolving all of the issues, and is the final product of the negotiations.

A marital settlement agreement puts in writing all the aspects of the divorcing parties’ settlement. Topics covered in the Marital Settlement Agreement include the parenting plan and timesharing schedule, the division of the parties’ assets and liabilities (called “equitable distribution”), alimony, child support, payment of attorney’s fees and costs, and any other items to which the parties have agreed.

A marital settlement agreement entered into by the parties and ratified by a final judgment is a contract, subject to the laws of contract. The enforceability of contracts in Florida is a matter of importance in Florida public policy.

Accordingly, because a marital settlement agreement is treated like any other contract, and is subject to interpretation like any other contract, they can be enforced by the court.

New Heights

According to Adel, there was no hesitation:

It was clear to me I would do this. He’s the great father to my children, and they need an involved parental figure in their lives to be happy. In my opinion, when you get divorced, the children should always be top priority.

Interestingly she did not consult with anyone. Some family members and friends raised an eyebrow, but they realized how determined she was. Her ex-husband and she had some heart-to-heart conversations about this, and there were people who helped move the process along from an operational perspective.

Doctors explained after the operation she would feel no difference in her day-to-day life. It’s like we were born with two kidneys so we would give one away when needed. What Adel did not anticipate is that she would be a match for someone else while waiting for the surgery.

The donation coordinator at Rabin Medical Center called and said there’s a young man who has been waiting for a kidney match for four years and she was ideal for it. She cried, because now there were two people who needed her help to live.

She spoke with both her ex-husband and the other, who said that as far as he’s concerned, the young man’s new kidney would come from her, while her the other person would receive his from another altruistic donor, who is a doctor himself from Soroka Medical Center.

The organ donation department director at Rabin Medical Center, said:

“This a complex multi-donation event. Whenever that happens, we feel very excited to be able to grant someone a new lease on life.”

The Ynet article is here.

Enforceability of Islamic Prenuptial Agreement

The Texas Supreme Court recently had to decide whether an Islamic prenuptial agreement is enforceable. Especially interesting is whether the agreement’s, Arbitration by Fiqh Panel Clause, can be enforced in a family law case involving children.

Texas Islamic Agreement

‘All My Exes Live In Texas’

The Wife, Ayad, and her Husband, Latif married in 2008. In connection with their marriage, they signed an “Islamic Pre-Nuptial Agreement”.

In the Islamic Pre-Nuptial Agreement, they said: “Belief that Islam . . . is binding on them in all spheres of life, and that any conflict which may arise between the husband and the wife will be resolved according to the Qur’an, Sunnah, and Islamic Law in a Muslim court, or in its absence by a Fiqh Panel.”

The three-person Figh Panel will be selected and provides that the panel “will not represent the parties in conflict, but rather, serve as impartial arbitrators and judges, guided by Islamic Law and its principles.” The majority decision of the Fiqh Panel will be binding and final.

Although the Wife’s signature appears on the Islamic Pre-Nuptial Agreement, she alleges that she did not become aware of its contents—or even see it—until she and her husband began experiencing marital difficulties in 2020.

The Wife argues she was “defrauded” into signing a prenup that violated her fundamental rights. In January 2021, she filed for divorce and sought to be appointed joint managing conservator of the couple’s six-year-old son.

Wife argued the term “Islamic Law” was too indefinite; the Agreement was void because it violated public policy; Husband’s previous breaches of the Agreement had excused Ayad from performing; and the Agreement was unconscionable.

The trial court held a hearing on Husband’s motion to enforce, and concluded it would order the parties to arbitrate under the Agreement. The court held a second hearing in which it gave each party twenty minutes to address solely whether the Agreement was entered into voluntarily.

The trial court ruled it had no discretion under the Texas General Arbitration Act but to enforce the Agreement and refer the parties to arbitration per the terms of their Agreement, but would review the award to determine if it violated constitutional rights or public policy, and would hold a hearing to determine whether the award was in the best interest of the child.

The Wife sought review in the Supreme Court of Texas.

Florida and Islamic Prenuptial Agreements

I’ve written about religious prenuptial agreements, such as the Mahr (Islamic Prenuptial Agreement) before. Prenuptial agreements are not just for celebrities. Anyone who brings personal or business assets into their marriage can benefit from a prenuptial agreement.

Prenups are also important to have in place before a couple starts investing in businesses, buying properties, and accumulating mountains of debt. Many religions, especially Islam, have terms couples want to be governed by in the event of divorce.

But just having a prenup is not enough. Prenups are frequently challenged in court. Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement is enforceable.

Florida also adopted the Uniform Premarital Agreement Act. The UPAA requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Because prenuptial agreements may be challenged in court, Florida courts must consider things such as fraud, duress, coercion, in addition to the constitutionality of prenups, whether they violate Florida law or Florida public policy.

‘Deep in the Heart of Texas’

The Supreme Court of Texas agreed with the Wife that the family court was required to hear and determine her challenges to the Agreement’s validity and enforceability before referring the parties to arbitration.

The Family Code, which provides that a trial court “may” refer suits for dissolution of marriage to either binding or nonbinding arbitration based on the parties’ written agreement is subject to certain limits.

Before arbitration, if a party to a divorce asserts that the agreement to arbitrate is not valid or enforceable,” then the court may order arbitration only if it determines that the agreement is valid and enforceable.

Here, the court incorrectly concluded it “must refer parties to arbitration when it is contracted by the parties,” and that it had “no discretion but to enforce the Agreement.” Since the trial court did not resolve the Wife’s challenges in its order compelling arbitration, and incorrectly concluded it could not, the trial court erred.

The Texas Supreme Court opinion is here.

Enforcing an Islamic Mahr Prenuptial Agreement

The extent of a court enforcing a religious prenuptial agreement, like the Islamic Mahr agreement, is big news. A family judge in Florida recently ruled that an Islamic Mahr agreement was not only enforceable, but waived equitable distribution and temporary support. How did an appellate court view the ruling?

Mahr Prenuptial Agreement

The Mahr from Thar

For many religious couples, in lieu of a secular prenuptial agreement, they sign a religious contract. Catholics have prenuptial agreements and Jews have a ketubah. In this recent Florida divorce, the parties signed an Islamic premarital agreement called a “Mahr” or “Mehr” agreement.

Although the agreement was entered in Bangladesh, neither party claimed it should be interpreted under Bangladeshi or Sharia law.

A Mahr is a contract to pay money – frequently expressed in gold coins – promised by a groom to his bride in the event of death or divorce. The amount is agreed to before the marriage and negotiated between the parents of the couple.

This Mahr agreement was two pages long, and had the explicit promise by Former Husband to pay Former Wife a total of 15 Bangladeshi lac Taka upon marriage. Five lac Taka were to be paid up front on marriage, and ten more in the event of a divorce.

At the time of the trial, 10 lac Taka was worth about $12,000. The Bangladeshi Taka has not been appreciating against the dollar lately.

At trial, the Former Wife argued that the ten lac Taka Mahr agreement was only the minimum amount she could ask the Former Husband for. In the Former Wife’s view, the Mehr did not waive her right to equitable distribution and temporary alimony.

The Former Husband, on the other hand, argued that the ten lac Taka under the Mahr agreement was the maximum she could get. The purpose of the Mahr was to guarantee an agreed sum to her. By agreeing to a guaranteed payment in advance, she waived her rights to ask for anything else.

The family law judge found that the Former Wife had built up some equity in the jointly titled, marital home, but then awarded it to the Former Husband. Then the court ordered Former Wife to vacate the house.

Relying on the Mahr agreement, the judge also denied Former Wife temporary alimony, limiting her to the ten lac Taka lump sum.

The Former Wife appealed.

Florida Prenuptial Agreements

I’ve written about religious prenuptial agreements, such as the Mahr, before. Prenuptial agreements are not just for celebrities. Anyone who brings personal or business assets into their marriage can benefit from a prenuptial agreement.

Prenups are also important to have in place before a couple starts investing in businesses, buying properties, and accumulating mountains of debt.

But just having a prenup is not enough. Prenups are frequently challenged in court. Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement is enforceable.

Florida also adopted the Uniform Premarital Agreement Act. The UPAA requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Because prenuptial agreements may be challenged in court, Florida courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure.

Florida the Sunshine Religious State?

Many people don’t realize that religious agreements can be enforceable in Florida. However, there is a limitation, only a religious agreement’s secular terms are enforceable as a contractual obligation. That is true even if the secular terms were agreed to in a religious ceremony.

Here, the parties disputed how the terms of the Mahr agreement should be interpreted. Former Husband argued the Mahr agreement was meant to protect a spouse in the event of a divorce, so the Mahr should be read as the entirety of Former Wife’s recovery.

Former Wife argued the lack of waiver language in the Mahr agreement –stating that the couple intended to waive equitable distribution and alimony – meant she was entitled to ask a Florida court for relief in addition to the Mahr.

The appellate court reversed, holding that parties to a prenuptial agreement — religious or secular — are allowed to contract away their traditional marital rights, but they must do so in a way that comports with Florida law.

To contract away marital rights, a prenuptial agreement’s plain language must unambiguously express a desire to waive equitable distribution. Additionally, any agreement that waives or limits the right to temporary support and attorney’s fees violates Florida public policy.

Because the Mahr did not expressly bar Former Wife from seeking a property division and alimony, it couldn’t overcome Florida’s strong public policy in favor of equitable distribution and temporary alimony.

The opinion is here.

 

Cheap Online Prenups

A segment aired on the ABC television show Shark Tank about a company selling cheap online prenups. There is no question a contract can be done cheaply online – especially when no lawyers are involved.  But lawyers  hired to create, or challenge, or defend real world prenuptial agreements can tell you if the cheap, online prenups are worth it.

Cheap Prenup

“He who represents himself, has a fool for a client”

No one likes to read the fine print on websites they visit. But, maybe you’re the kind of person who is comfortable getting a medical diagnosis from WebMD! Even if you are, you may want to avoid unpleasant surprises and look through the website’s “Terms of Use” (the agreement every user must agree to and abide by in order to use a website or service).

Websites may advertise that their online legal services and prenuptial agreements are prepared by “family lawyers.” However, if you look at the website’s Terms of Use, they may likely reveal that the prenups they are selling you – which will govern years of alimony payments, the division of all your property, tax consequences, and your life after marriage – were created without any “legal advice.” Or my personal favorite: no law was considered about your situation when drafting your prenuptial agreement.

Prenuptial agreements are important documents. So, if you don’t care that your cheap, online prenup did not take into consideration any law, let alone any changes in the law, or that any of the information is current, a cheap online prenup may fit nicely next to your online medical diagnosis.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are not just for tech billionaires, celebrity actors and rock stars. Prenups are about much more than just resolving who gets that expensive Montana ranch acquired during a marriage.

Any couple who brings any personal or business assets (or debts) into their marriage can benefit from a prenuptial agreement. They are important to have in place before a couple starts investing in businesses, buying properties, and accumulating mountains of debt.

But just having a prenup is not sufficient. That’s because prenups are frequently challenged in court. Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement is enforceable.

Florida adopted the Uniform Premarital Agreement Act. The UPAA requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Couples wanting to sign one can enter into a premarital agreement with respect to their rights and obligations in any of their property, whenever and wherever acquired or located; their right to buy, sell, use, transfer, or otherwise manage and control their property and the disposition of their property if they separate, divorce, die, or any other event.

Because prenuptial agreements may be challenged in court, Florida courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure.

Good, Cheap, or Fast? Choose Two

Prenuptial agreements are very technical and one size does not fit all. They are particularly important to protect your future income, children from another marriage, potential inheritances, businesses and your business partners, other assets, and your sources of income.

The last thing that you want to do is wonder if you are protected by a cheap, online prenup; one which may not be enforceable on its face. As mentioned above, Florida adopted the Uniform Premarital Agreement Act. The UPAA is Florida’s recognition that there is not always uniformity in how prenups are enforced, challenged and defended.

There are many nuances in the law of prenups which can differ from state to state. For instance, some provisions in a prenup which are available in one state – such as the ability to waive temporary alimony – may not be available in another state. There may also be differences between states about the sufficiency of the financial disclosures required.

There are also questions about privilege and confidentiality. In Florida, communications with your attorney are generally privileged. This means that communications between a client and their lawyer can be confidential. This can also mean that, absent some exception or waiver, neither an attorney or a client can be compelled to divulge confidential communications made during the rendition of legal services.

What do online, cheap prenup websites offer? As the websites plainly tell you, they are not your law firm. So, communications between you and the website are probably not privileged communications under the attorney-client privilege or work product doctrine.

This could result in your communications not being protected. And if your prenup gets challenged in court, you may be in the uncomfortable position of watching someone you thought was your lawyer testify against you.

One cheap, online prenup website said it best:

“Any Legal Information provided is not a substitute for legal advice from a qualified attorney licensed to practice in an appropriate jurisdiction.”

The JDSupra article is here.

 

Transformer: Marital Settlement Agreement

Actress Megan Fox and her estranged husband Brian Austin Green are transformers: changing from married to single after finalizing their marital settlement agreement. The settlement agreement should resolve all of the parenting and financial issues raised in their divorce.

marital settlement agreement

More Than Meets the Eye

Actress Megan Fox, 35, is one of the stars of the Transformers movie franchise. Her husband, David Austin Green, 48, is also an actor, best known for his portrayal of David Silver on the television series Beverly Hills, 90210

According to many reports, the couple did not have a prenuptial agreement before getting married. This means that, under California law, they will have to divide all of the community property they acquired during their decade-long marriage.

Details about the marital settlement agreement are murky. It is unclear whether either one of the parties will be paying alimony or child support, though the divorce documents refer to a settlement being agreed upon outside of court.

Regarding parenting, the couple agreed to share joint legal and physical custody of their three children, a highly contentious issue for many couples, but a demand which Fox requested when she initially filed for divorce in November 2020.

Fox will also get her legal last name changed back from Green. News reports indicate both Fox and Green have moved on. Fox has been in a highly publicized romance with Machine Gun Kelly since mid-2020, while Green has been dating “DWTS” pro Sharna Burgess.

Florida Marital Settlement Agreements

I’ve written about agreements before. Most family law cases are resolved by agreement, not by trial. A Marital Settlement Agreement is the method to resolving all of the issues, and is the final product of the negotiations.

A marital settlement agreement puts in writing all the aspects of the divorcing parties’ settlement. Topics covered in the Marital Settlement Agreement include the parenting plan and timesharing schedule, the division of the parties’ assets and liabilities (called “equitable distribution”), alimony, child support, payment of attorney’s fees and costs, and any other items to which the parties have agreed.

A marital settlement agreement entered into by the parties and ratified by a final judgment is a contract, subject to the laws of contract. The enforceability of contracts in Florida is a matter of importance in Florida public policy.

Marital Settlement Agreements in Florida are treated differently than prenuptial agreements. There’s a good reason for the difference in treatment, and it turns on the adequacy of the knowledge of the finances involved.

The adequacy of knowledge can be plausibly raised only when an agreement was reached by people in conditions of mutual trust and confidence and who are not dealing at arm’s length – such as when you are negotiating a prenuptial agreement.

But once you are involved in divorce proceedings in court, you are dealing at arm’s length and without the special fiduciary relationship of unestranged spouses. Questions about the adequacy of your knowledge of finances don’t really exist when you are in court and have the opportunity to take financial discovery.

Hope and Faith

The couple had a rollercoaster relationship from the start. After meeting on the set of “Hope & Faith” when Fox was just 18 in 2004, they were engaged and living together by 2006. In 2009, they made a “mutual decision” to end their engagement only to be re-engaged and married by the end of June 2010.

Four years and two kids into their marriage, Fox stated very publicly that there was no “intimacy whatsoever” with her husband during a red carpet interview. Fox has been in a new relationship with Machine Gun Kelly consisting of a  whirlwind of PDA’s and selfies.

Her soon to be ex-husband Green confirmed:

“I’ve never met him, but Megan and I have talked about him. They’re friends at this point, and from what she’s expressed, he’s a really nice, genuine guy, and I trust her judgment.”

The Fox News article is here.

 

Validity of Prenuptial Agreements

Courts which uphold the validity of prenuptial agreements have singer, Kelly Clarkson, singing a happy tune. A family court judge recently declared her prenup was valid. The ruling means Clarkson holds the reins to a $10.4 million Montana ranch where her former husband, Brandon Blackstock, has been living and refusing to leave.

Prenuptial Agreement

Stronger in the Treasure State

Singer, songwriter, and The Voice coach, Kelly Clarkson, gave her fans a sneak peek of her ranch in rural Montana, where she was sheltering-in-place with her family amid the COVID-19 pandemic. Earlier this year, before ruling on ownership of the ranch, the judge ruled that her music manager and ex-husband, Brandon Blackstock, would have to pay $81,000 per month for the upkeep for the Montana ranch where he was then residing.

Although court papers show that he is only making about $10,000 per month – a far cry from his ex’s $1.5 million monthly income – Clarkson was then paying him $150,000 in spousal support and another $45,000 in child support each month.

Recently the family court rejected Blackstock’s argument that the Montana ranch is marital property and should be shared equally by both exes, according to the Sept. 30 order obtained by E! News. Instead, the judge upheld their premarital agreement, and found that the Montana ranch was Clarkson’s non-marital property identified in the prenup.

The family judge’s ruling means Clarkson takes control of the ranch:

“The Court further finds that the Montana Ranch and the other two Montana properties are not titled in both of the Parties’ names either as joint tenants with right of survivorship or as tenants by the entireties, as required under the PMA to create marital property,” reads the decision. “The Court therefore rejects Respondent’s position that the Montana Ranch and other Montana properties are marital property owned 50/50 by the Parties.”

The situation appears to be complicated for the pair: While Clarkson owns the property, her ex-husband is the one living there.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are not just for celebrity singers and songwriters, and they are about much more than just resolving expensive Montana ranches acquired during a marriage.

Any couple who brings any personal or business assets to their marriage can benefit from a prenuptial agreement. They are important to have in place before a couple starts investing in businesses, properties, and other investments.

But prenups are frequently challenged in court.

Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement is enforceable. For example, Florida adopted the Uniform Premarital Agreement Act. The Act requires that all premarital agreements be in writing and signed by both parties. It is enforceable without consideration other than the marriage itself.

Couples wanting to sign one can enter into a premarital agreement with respect to their rights and obligations in any of their property, whenever and wherever acquired or located; their right to buy, sell, use, transfer, or otherwise manage and control their property and the disposition of their property if they separate, divorce, die, or any other event.

Prenuptial agreements may be challenged in court, as Kelly Clarkson’s former husband tried. When ruling on the validity of a prenup, Florida courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure.

Mr. Know It All

In order to beef up his claim to marital property, after their separation, Blackstock made a “deliberate choice” to “change his life” and become a full-time rancher, according to an August filing obtained by E! News. At the time, he was “exclusively using” the Montana ranch as his “residence and business.”

Clarkson previously requested permission to sell the ranch because of the “financial burden” of maintaining a property that was only being used by her ex-husband. The costs of maintaining the ranch are $81,000 per month, the court determined.

However, the judge initially rejected her request to sell the Montana site. Blackstock was ordered to pay the hefty property fees beginning in April 2021. For her part, Clarkson was required to pay nearly $200,000 per month to Blackstock, a former music manager, in spousal and child support. He is responsible for “100% of the cost” of transporting their two children (River, 7, and Remington, 5) to and from Montana. He has a 25 percent custodial timeshare.

After the ruling on the prenuptial agreement, Clarkson now has the right to sell the Montana ranch as she is the one who purchased it, according to the report. The ex couple’s divorce has been ‘bifurcated’ meaning the end of the marriage has officially been declared and some financial issues were reserved on.

The NBC Chicago news article is here.