Category: Agreements

Prenuptial Agreements For Men and Women

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Tuesday, December 31, 2013.

Prenuptial property division are important. They help keep your property yours. You get to make your own standards for alimony. And, divorce becomes a lot cheaper, simpler and faster to resolve. Interestingly, a recent study found that millionaire men mostly don’t require prenuptial agreements, but millionaire women mostly do want prenups.

As San Francisco Weekly reports, a study prepared by Millionairematch.com did a random sample of 524 millionaires in the San Francisco Bay Area where there’s plenty of “new money” to be found. Especially in Silicon Valley.

The survey results were surprising:

  • 82.6 % of millionaire men in Silicon Valley are most likely to seek out non-millionaire women.
  • Only 16.2 % of millionaire men in Silicon Valley insist on a prenuptial agreements.
  • Millionaire women, however, were quite the opposite
  • 86.7% of millionaire women preferred dating other millionaires.
  • 92.4% of millionaire women insist on prenups.

Apparently to marry a non-millionaire means to be charitable. The more popular responses from men polled had to do with dating “somebody who appreciates things” and not dating “bossy, middle-aged women who can take care of themselves.”

For women it’s a matter of “not carrying the whole financial burden,” according to a female member worth $100 million. (What financial burden is she referring to when one member of the couple is worth $100 million?) Must be tough when one decides love does cost a thing.

With many first marriages ending in divorce, and most second or third ones hitting the skids, a prenup is smart financial planning. A prenuptial agreement and the discussions that go with it can help ensure the financial well-being of the marriage.

The article can be read here.

Postnuptial Agreements: The Agreement for Couples Already Married

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Thursday, August 22, 2013.

What is a postnuptial property division, and why have one? Some people say “take money out of the equation, and a lot of marriages would not end in divorce.”

That’s why many people sign prenuptial agreements before they marry. Because money problems are at the root of a lot of divorces, more and more couples are signing postnuptial agreements.

Postnuptial agreements are similar to prenups, except they are for married couples. Postnups are prepared after the marriage, and state what your rights and obligations are if you divorce or die.

As USA Today reports, postnups are on the rise across the country:

Postnup agreements can cover everything from how to divide financial assets in divorce to limits on partners’ weight gain, just as prenups can.

And in a survey of divorce lawyers by the American Academy of Matrimonial Lawyers, 51% saw an increase in postnups.

Now that the Supreme Court has struck down the Defense of Marriage Act, or DOMA, experts say more postnups could be in the offing.

It’s not because newly married same-sex couples’ unions are likely to suddenly founder. On the contrary: They will need to re-allocate some of their property now that they can tie the knot.

“You can anticipate that couples are going to want to address property rights in a postnup for property that otherwise would have been deemed separate, because they acquired it before the marriage,” she said. “Many couples will want to give recognition to those assets and put them in the marital estate.”

After the Supreme Court’s DOMA decision, spouses who have the benefits may want to protect them, and couples who rushed to get married after the DOMA decision, and who did not want to delay their weddings by negotiating a prenup, are rushing to get postnups.

There are some good reasons for a postnup:

  • You ran out of time to hire an attorney to prepare a prenup;
  • You want to give your marriage a last-ditch effort by working out the financial problems;
  • Asset protection – when you receive a large gift or inheritance;
  • You have done something you feel guilty about, and want to make concessions to save your marriage;
  • You want a say in how to distribute your assets before you die;
  • You want to define both spouses’ obligations during the marriage – who pays for what, or do you file taxes jointly or separately?

In 2007, Florida adopted the Uniform Premarital Agreement Act to establish some uniformity in agreements and hopefully reduce litigation. Whatever your reason for a postnup, relationship planning can save you a lot of money down the road.

Stay or Move Out of Home During Divorce?

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Friday, July 19, 2013.

Many clients going through divorce are unsure if they should stay in the marital home, or move out. Does staying help you? Does leaving mean that you are giving up your rights? Will it be harder to enter an agreement?

The marital home is many things. First, it’s a valuable asset, maybe your most valuable asset – assuming your house isn’t underwater. Second, the home is a place for you to live in . . . with your children if you have them. Third it is an important, and possibly big part, of the final settlement.

Marital Asset

The home remains a marital asset, which is subject to equitable distribution, regardless of who lives there during the divorce process. If a home is marital then both parties have equal rights to buy – out the other’s share. Both may also be on the hook for liabilities.

Children’s Issues

Until a parenting plan in place, if you are interested in maintaining a meaningful relationship in your child’s life, leaving the home before a timesharing agreement is entered may show a lack of real interest in the child’s daily life. Moving out can also create the appearance of a new ‘primary parent’ by default. Worse, if the process takes a long time, it creates a new status quo.

Settlement

Staying in the same home could create an incentive to negotiate a final settlement because living with your soon to be ex-spouse is very uncomfortable. However, if someone moves out, the person remaining in the home is sitting pretty, and may be less inclined to settle.

Also, the person leaving may still have to pay for the home’s expenses while also paying for a second place. It can be costly to maintain two households, and prohibitive expensive when you know that the process will take a long time.

If you are going to leave, you should consider the following before moving:

  • There should be some discussions about maintaining the home.
  • Decide who is paying for which expenses.
  • Inventory the personal property, things like artwork, LP records, clothes, tools, silverware etc.
  • Create boundaries for when the ‘out-spouse’ can use and enjoy the home after leaving it. Create a schedule everyone can agree to.

Top Reasons to Have a Prenuptial Agreement

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Monday, June 3, 2013.

Property division are important for couples planning to marry. Many people believe prenuptial agreements are only for the rich and famous. However, prenuptial agreements help all couples. Here are a few reasons why:

Keeps Your Non-Marital Property Non-Marital. The property you brought into the marriage is yours. But over time it is common for people to start mixing things up. Inheritance funds get deposited into joint accounts, properties get transferred into joint names…and all for good reason. Unfortunately, tracing commingled property is expensive, and hard to prove. But, if you put it in writing at the beginning, you can avoid this task and save some money down the road.

You Can Change the Law. Right now in Florida, there has been an ongoing debate about alimony. When you go to court, a judge has to follow state law regarding alimony. However, through an agreement you can modify Florida’s legal standards for awarding alimony, in addition to modifying what the current law says about the amount of support and the duration of the alimony period.

Avoid Expensive Divorces. Let’s face it, divorce can be expensive, and the cases don’t end quickly. A prenuptial agreement can simplify things by resolving issues ahead of time, way before the divorce is even filed. Once you have entered an agreement spelling out what happens in the event of a divorce, the case becomes a lot more cheaper, simpler and faster to resolve.

Protects Your Children’s Inheritance. Prenuptial agreements protect property from falling into the hands of the new spouse, often seen by children from earlier marriages as a “gold digger.” An agreement helps assure your children that any inheritance is protected, and they don’t need to resent the new spouse.

It is important to be aware of all of the consequences of marriage, and do what planning you can to avoid complications and costs in advance

Florida Alimony Change : The Midnight Battle

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sfsaOn behalf of Ronald H. Kauffman, P.A. posted in Alimony on Thursday, May 2, 2013.

Believe it or not, the law does not change at a fast pace. With that in mind, Florida’s attempt at alimony changes is like watching a NASCAR race!

Last month, the Florida Senate passed bill 718 making major changes to Florida’s alimony law (like prohibiting permanent alimony) and timesharing law (creating a policy that equal timesharing is in the best interest of the child).

A few weeks later, the Florida House adopted the Senate’s bill, by an overwhelming vote.

As the Miami Herald reports, late last night, Governor Scott vetoed Senate bill 718 to everyone’s shock. His veto came only 4 hours before the midnight deadline, after which the bill would have automatically become law.

The HUGE constitutional problems with the bill was that bill applied retroactively (people could rely on the new law to overturn court orders and settlement agreements entered years ago.)

What’s the Constitution’s problem with retroactivity? There are two big problems actually:

1. The legislature can’t make laws impairing existing contracts. Since the alimony bill would overturn agreements entered years ago, the bill is probably unconstitutional.

2. Our constitution separates the three branches of government, and prohibits one branch from exercising the powers of another branch. The alimony bill effectively allows the legislative branch to un-do court orders entered by the judicial branch.

The Governor wrote the Senate President a letter late last night outlining his reasons:

The retroactive adjustment of alimony could result in unfair, unanticipated results. Current Florida law already provides for the adjustment of alimony under the proper circumstances. The law also ensures that spouses who have sacrificed their careers to raise a family do not suffer financial catastrophe upon divorce and that the lower-earning spouse and stay-at-home parent will not be financially punished.

The Legislature now has the opportunity to override the Governor’s veto by a two-thirds vote in each house, or take out the offensive retroactive language and try again.

This is almost as much drama as Vikings. Stay tuned!

Enforcing Religious Marriage Contracts: How to Get a Get

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Wednesday, March 27, 2013.

Divorce can be tricky when the divorcing couple is religious. Religious issues have arisen for clients of all faiths. This is especially true during religious holidays like Passover/Easter, and usually deal with decisions over holiday timesharing and religious upbringing.

However, different religions can have unique issues. For instance, Muslim clients sometimes have had disputes over the interpretation and enforcement of Mahr agreements – a religious prenuptial agreement.

For Jewish clients, a frequent problem is the “chained wife” or agunah. In Judaism, for a divorce to be effective, Jewish law requires that a man grant his wife a get. An agunah, or chained wife, is legally divorced in Florida, but the ex-husband refuses to sign a get.

There has historically been an imbalance of power, giving men the upper hand when religious couples negotiate child custody, division of assets and other issues. In some cases, wives and their families have paid hundreds of thousands of dollars for their husband to grant them a get.

Recently, a Connecticut trial court affirmed the constitutionality of the Modern Orthodox prenuptial agreement created by Beth Din of America aimed at protecting chained wives.

The Jewish Daily Forward reports that Rachel Light, a former wife, entered into a prenuptial agreement which had a ‘damages for delay’ clause requiring the husband to pay roughly $100 per day for every day he refused to sign a get. Ms. Light may possibly claim damages of more tha $100,000 from her ex-husband because he refused to sign a get.

Susan Aranoff, director of the advocacy group Agunah International, called the decision a ‘breakthrough for women,’ saying, “The unanswered question with regard to the prenup was always will it be enforceable in court. Now that is has been enforced husbands know there is a cost for withholding a get.”

Last July Rachel sued arguing that while she and Eben had separated years earlier, Eben refused to grant her a get. Rachel asked the court to enforce the provision in the prenup in which Eben agreed to pay $100, plus adjusted inflation, for every day he refused to grant the get. Eben argued that the prenup was a religious matter, and as such, it was unconstitutional for a secular court to enforce the document.

In his opinion, the judge found that enforcing the prenup was no different from enforcing a secular contract. He cited several cases, including Odatalla v. Odatalla, where a New Jersey court enforced an Islamic mahr agreement, and Avitzur v. Avitzur, which ruled that it was constitutional for a secular court to enforce a ketubah, or Jewish marriage contract.

How To Void a Prenuptial Agreement

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Wednesday, March 13, 2013.

Having a prenuptial agreement shoved under your nose days before your wedding can be frightening. It also can raise issues many people don’t want to face: things like finances and the possibility of divorce.

Because of Florida’s policy of enforcing agreements, prenups can be difficult to void – but not impossible.

In Long Island, Elizabeth Petrakis felt forced by her future Husband to sign her prenup 4 days before her 1998 wedding to millionaire Peter Petrakis.

According to Elizabeth, her future Husband promised to rip up their agreement once they had children. But after having twin sons and a daughter, the prenup stayed intact.

A trial court in New York voided the prenup on the grounds of “fraud in the inducement” and recently an appellate court approved of that ruling – recognizing that the Husband misled the Wife in the contract, and finding his “credibility to be suspect.” As her attorney said:

“You can enter into prenups, but you shouldn’t when you’re marginalizing your spouse or being too greedy.” “The argument was helped by inequality of the prenuptial agreement.”

Another attorney further explained the court’s decision:

“Many couples discuss the terms of their prenups and say they will do or say things in the future that are not memorialized in writing,” she said. “However, this fraudulent inducement to buy a house put the marital home in joint name and make other financial incentives after the parties wed appeared to sway the appellate panel who agreed to set aside the prenuptial agreement based on fraud.”

Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement is enforceable. 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.

Shared Custody Agreements and Religion

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Friday, January 18, 2013.

Joint child custody in parenting plans and agreements help resolve a lot of the child timesharing issues after the divorce. But sometimes the provisions conflict with each other. The Volokh Conspiracy recently reported on the interesting New York case of Katz v. Katz. Katz involves two ultra-orthodox Jewish parents. The parties separated religiously, but never had a court approve their agreement. The agreement said:

(7) JOYOUS OCCASIONS. The Child will participate in every joyous occasion of the relatives who are disqualified as witnesses, such as engagement, wedding . . .

(8) EDUCATION. The 2 parties are obligating themselves to raise The Child to appropriately respect the 2 parents. . . No party will take The Child to any place which is incompatible with the aforementioned style and manner, not even temporarily . . .

The mother wanted to travel to Israel with the child for her brother’s wedding. The father objected, citing his religious beliefs that travel to Israel violated the religious views of his Jewish sect. He argued travel to Israel would undermine the child’s religious beliefs, confuse the child and “would be against the child’s best interests because he is too young to understand the differences that he will be exposed to in Israel . . .”

The mother noted that the father himself has already traveled to Israel – in fact he acknowledged that he traveled to Israel three times, and as recently as within the last 12 months, but that each time he traveled to Israel it was in his adult life, not as a child.

Strangely, the judge ruled:

At this juncture, it is not in this child’s best interest to require him to travel to Israel for a celebration; the emotional risk to him outweighs any benefit that conceivably would be derived from the experience. Furthermore, the mother did not demonstrate any serious adverse affects that would be contrary to the child’s best interests if he were to stay.

As a side note, religion and divorce often get thrown together, such as in the Muslim Mehr agreements I blogged about earlier. The establishment clause tries to separate government and religion, but Katz shows why it can’t be avoided sometimes. However, the Establishment Clause is usually not violated when neutral principles of law, such as the best interest of the child test, can resolve a dispute without relying on religious doctrines.

Bad Gift Idea for a Second Marriage: A Muslim Prenup

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Tuesday, September 11, 2012.

In an earlier post I hinted that a prenup made a fine gift for a second marriage. But not all prenuptial agreements are created equal. An interesting case out of Kansas City refused to enforce a Muslim divorce. News of the case comes from The Volokh Conspiracy.

The Muslim premarital agreement is known as a mahr agreement. Mahr agreements are negotiated before the marriage between the groom and the bride’s family. Mahr agreements have two parts: a premarital payment in exchange for marriage vows, and a post-nuptial payment made if the marriage ends in divorce or death (a sort of deferred settlement). According to the wife in the Kansas case, her mahr agreement required the Husband pay her the deferred payment of 1,354 gold coins – worth about $677,000.

There were a lot of problems with the mahr agreement in the Kansas case. These problems often arise in marriage contracts from foreign countries which are primarily for religious purposes, or intended to be enforced in religious or foreign courts. The most important grounds the court gave for not enforcing the mahr included:

1. The mahr was never translated into English;

2. The mahr would function as a penalty, and Kansas is a no-fault state;

3. The mahr created tension between the Establishment and Equal Protection Clauses; and

4. The court suggested the mahr might not even qualify as a prenuptial agreement.

Florida law is slightly different from Kansas in this area. There are very few Florida appellate cases, and no Florida Supreme Court cases about mahr agreements. However, at least one Florida court has held muslim religious agreements may be enforceable in Florida, if they comply with secular contract law.

Whether you have a foreign premarital agreement, or want to enter into one, you can incorporate your religious or secular customs into a legal agreement, and have them enforced in Florida. As the Kansas case shows though, this is not something to be left for the imams back home.

Good Gift Idea for a Second Marriage: A Prenup

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On behalf of Ronald H. Kauffman, P.A. posted in Agreements on Thursday, September 6, 2012.

The probability of divorce is around 50% for first marriages. For second marriages, it’s more like 67%. The National Center for Family and Marriage Research recently analyzed the data, and found that the overall divorce rate was greater for second marriages.

What some clients don’t realize is that going through a second, third, or fourth divorce can be more complicated than first-time divorces. In multiple divorces, couples are older, and have less time to make up for losses. Also, couples are competing for dwindling resources. Child-support, alimony, and dividing up of the retirement accounts may still be pending, and there can be little left to divide in a second divorce.

Prenuptial agreements can be extremely important if you are thinking of marrying again, and they are not just for the ultra-rich. You can limit what’s in a prenup. Some can simply state what assets each party has brought into the marriage, and what assets each party will take away if the marriage ends. Or, if there is a disparity in incomes, you can add to the contract how much the lower-income spouse will receive. Also, if you have children from previous marriages, you can also provide some protection for an inheritance.

Of course, a prenup isn’t a requirement, you could just live together without the vows.

That may turn out swell if you are both earning about the same amount of income. Boback cautions, however, “It’s good for the person with all the stuff — and money. But the person who takes care of the home or kids and has nothing of their own after, say, 10 years of living together and then splitting up? They’re out of luck.”