Tag: Cohabitation Agreements

Validity of Prenuptial Agreements

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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.

 

Viva Las Agreements

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Some lucky hound dog is going to buy Elvis Presley’s marital settlement agreement. It is now or never if you want to bid on the King’s agreement with Priscilla Presley too, because it’s going up for auction.

Return to Sender

As People magazine reports, one of rock-n-roll’s most famous marital settlement agreements will soon be a very expensive keepsake for any fan with a burning love of Elvis.

The document marks that period when Elvis checked into the Heartbreak Hotel, signifying the end of the Elvis and Priscilla Presley marriage, and is dated Aug. 15, 1972.

Fans may be all shook up, because each of the 12 pages contains fascinating details and offers the reader a snapshot into the details, and struggles involved between both parties that only legal documents can give.

Priscilla may have told the King don’t be cruel to her, because the agreement states that the former couple agreed to divide up their property via to avoid “emotional stress.”

Florida Marital Settlement Agreements

Many people don’t realize it, but 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, the division of assets and liabilities, alimony, child support, attorney’s fees, and any other items agreed to.

A marital settlement agreement entered into by the parties, and ratified by a final judgment, is a contract, subject to the laws of contract. Because they are contracts, they are subject to being set aside.

I have written about marital settlement agreements before. You can set aside an agreement in Florida by establishing that it was reached under fraud, deceit, duress, coercion, misrepresentation, or overreaching.

There is another ground to vacate a marital settlement agreement in Florida, and it has a few elements. First, you have to show that the agreement makes unfair or unreasonable provision, given the circumstances of the parties.

Once you have shown the agreement is unreasonable, a presumption arises that there was either concealment by the defending spouse or a presumed lack of knowledge of the finances at the time the agreement was reached.

The burden then shifts to the spouse defending the agreement, who may rebut these presumptions.

Can’t Help Falling in Love

“The parties were married on May 1, 1967 in Las Vegas, Nevada,” the agreement states:

Unfortunate circumstances and unhappy differences have arisen between the parties by reason of which they have lived separate and apart since February 23, 1972, and by reason of which they intend to dissolve their marriage.

For suspicious minds wondering what’s in the settlement signed by both Elvis and Priscilla: the music legend signed over his famous 1971 Mercedes Benz, his 1969 Cadillac Eldorado, a 1971 Harley Davidson motorcycle and $100,00.

Priscilla was definitely not moving into the Ghetto. She also received half the income from their three homes located in Beverly Hills, Los Angeles and Palm Springs, California.

A pre-sale estimate of the settlement is between $26,318 to $32,898. The last time the settlement documents came up for sale in 2011 they sold for just under $8,000.

The former couple married on May 1, 1967. Elvis was 32, while Priscilla was 21. The had daughter Lisa Marie less than a year later in February 1, 1968.

The People magazine article is here.

 

Celebrity Prenups

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Market Watch reports that Katie Holmes and Jamie Foxx were spotted holding hands in Malibu – the first time they were seen together – allegedly because Tom Cruise had a clause in their prenuptial agreement prohibiting her from publicly dating another man after their divorce for a period of time.

Strange Prenup Clauses

There’s been an increase in so-called “lifestyle clauses” in agreements in recent years. The increase, and prenups and marital agreements are subjects I have written about several times.

According to Market Watch, there are agreements which penalize everything from cursing ($100 for each “f-bomb”) to weight gain (eliminating alimony for a woman if she gained 25 pounds from her wedding weight).

For most prenuptial agreements, however, “lifestyle clauses” typically don’t include such demands. The can include requirements that children born from the marriage be raised in a certain country, or under a certain religion.

Strange clauses in agreements can also spell out what can happen during the marriage. For instance, some contract clauses regulate whether one or both parties could cheat, as well as rules dealing with physical appearances.

There is a big question as to whether these lifestyle clauses are enforceable. One bride-to-be limited her future husband to watching one Sunday football game with friends a month.

Another marriage contract limited visits from the bride’s mother-in-law. An increasing number of people who co-parent even have special clauses that limit the amount of time their partner can spend online.

Florida Prenups

Many think prenuptial agreements are for the wealthy or famous. But, you don’t always enter a marriage with riches, or guarantees that the bliss will last. It might not be a bad idea to have a plan in place.

Prenuptial agreements, or “prenups,” are contracts entered into before marriage that outline the division of assets in case of divorce or death. They typically resolve things like alimony, ownership of businesses, title of properties, in addition to the lifestyle clauses of celebrities.

There are many other, more mundane, concerns that can be addressed in the contract:

  • Caring for a parent
  • Going back to school;
  • Shopping habits
  • Credit card debt;
  • Tax liabilities;
  • Alimony and child support from previous relationships; and
  • Death or disability.

Lifestyle Clauses

Arguments are a known predictor of divorce. In order to avoid that, it is better to discuss with each other the terms of a prenuptial agreement when times are good.

Difficult talks about lifestyle choices, in-law visits, and money can uncover things that could be disastrous if put off until several years into the marriage.

Outlandish demands, such as “no public dating” clauses, are much easier to secure in a celebrity relationship than that of the average case. Strange lifestyle clauses are unusual in your basic prenup.

But the issues are different for someone like Tom Cruise, who could put a clause like that in an agreement, and has the leverage to get it.

The Market Watch article is here.

 

Florida Cohabitation Agreements

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There has been a very sharp increase in the number of cohabiting couples over the past 15 years or so. This rise in cohabitating – and not marrying – has led to a rise in complex and often costly legal disputes which could be avoided with a cohabitation agreement.

As the Guardian reports, despite what many believe – and around one in four people living together think they have the same legal protection as married couples  – there is no status in Florida law as a common-law spouse or partner.

The number of unmarried couples has doubled since the mid-1990s to nearly three million, while the number of children living with unmarried parents has risen from 0.9 million in 1996 to 1.8 million in 2012. In addition, there are an estimated 6,000 same-sex couples, not in a civil partnership, who have children.

Basically, the law does not recognize in any meaningful way a living-together relationship outside marriage or civil partnership.

So, if a cohabiting relationship breaks down there is very little protection for the weaker partner. As a result, some cohabiting families can find themselves facing real difficulties should they split up, particularly when children are involved.

Florida Law on Cohabitation Agreements

I have written about agreements, and especially cohabitation agreements before. Florida law recognizes that unmarried cohabitants may agree to enter into an enforceable contract that establishes rights and responsibilities towards each other: “as long as it is clear there is valid, lawful consideration separate and apart from any express or implied agreement regarding sexual relations.”

One of the reasons Florida allows for cohabitation agreements is because the right to contract is one of the most sacrosanct rights guaranteed by our fundamental law.

Should your cohabitation agreement be in writing? While it may be literally true that nothing in Florida’s statute of frauds specifically requires that a cohabitation agreement be in writing, it absolutely should be.

Florida is actually unique in the writing requirement. Among the other states that also recognize contracts between unmarried cohabitants, only three—Minnesota, New Jersey, and Texas — have held that such agreements must be in writing, and all three of those jurisdictions have enacted statutes specifically containing this requirement.

However, given that one of the primary purposes of an agreement is to reduce the risks of protracted litigation and excessive attorney’s fees, failing to have a solid, written cohabitation agreement is counterproductive.

Cohabitation v. Marriage

In Florida, as in many common law countries like England and Wales, when married couples divorce, both parties have a legal right to maintenance and their share of assets, including property and inherited property. Judges have complete discretion under family law to take all the circumstances and history of the relationship into account and decide on a fair division.

However, cohabiting couples have no such rights, regardless of the number of years they have been together and whether they have children.

So, for example, partner A moves into partner B’s property (partner B, whose name is on the deeds, is the sole owner), they live together and maybe have children. If they separate, whether after five, 10 or even 30 years, partner A has no right to personal maintenance from partner B even if she has always been supported financially.

‘No Nups’ What’s in a Cohabitation Agreement?

As the law stands, the only solution for cohabiting couples who want legal protection should they split up is either to marry or to draw up a cohabitation agreement, otherwise known as a “no nup”.

So what is a cohabitation agreement?

Generally, No Nups set out who owns what, and in what proportion, and lets you document how you will split your property, its contents, personal belongings, savings and other assets should the relationship break down.

No Nups can also cover how you will support your children, over and above any legal requirements to maintain them, as well as how you would deal with bank accounts, debts, and joint purchases such as a car.

The agreement can also be used to set out how you and your partner will manage your day-to-day finances while you live together, such as how much each contributes to rent or mortgage and bills, and whether you will take out life insurance on each other.

The Guardian article is here.

 

Marital Settlement Agreements

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“Shahs of Sunset” star Golnesa “GG” Gharachedaghi is having an interesting divorce problem. Her pending divorce from her husband, Shalom Yeroushalmi, has run into a serious roadblock: her husband refuses to sign the divorce papers.

According to a Page Six report:

“There are no issues about spousal support, assets or those typical divorce things at all,” the source said. “He is not asking for anything. What he’s basically doing is tormenting her. He’s not signing just to give her a hard time.”

“He just keeps saying he’s going to sign, then he doesn’t sign,” the source added. “He’s trying to drag it out and prevent her from moving on.”

Marital Settlement Agreements

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.

Conclusion

If Yeroushalmi signs the marital settlement agreement, the divorce petition can make its way through the system, allowing the former couple to sever all formal ties. However, if he doesn’t, a judge may grant GG a default divorce after a considerable amount of time of inactivity on Yeroushalmi’s behalf.

GG and Yeroushalmi had a whirlwind romance. They secretly tied the knot at the end of January 2017, though GG realized within days she had made a terrible mistake.

“I wanted to throw up, “she said. “I was just thinking, ‘My dad’s going to kill me right now. And my mom is going to wake me up and then kill me again.’”

She filed for a divorce after one month of marriage.

The Page Six article is here.

Silicon Valley Prenups

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The billionaire founder of Farmville has found himself in Divorceville. If divorces are tough, Silicon Valley divorces – with sophisticated spouses, high value assets, and hard-to-value assets – can be tougher. There is a reason more people insist on prenuptial agreements.

What are Prenups

I’ve written about prenuptial agreements before. Prenuptial agreements, or “prenups,” are contracts entered into before marriage that outline the division of assets in case of divorce or death.

Prenups, and Post-nups (agreements entered after a marriage) resolve things like alimony, ownership of businesses, title of properties, and even each spouse’s financial responsibilities during the marriage. As the UK Guardian reports, in Silicon Valley, divorces and prenup agreements go hand in hand.

Voiding Prenuptial Agreements

Farmville founder Mark Pincus, who was an early investor in Facebook and Twitter, is worth around $1.28b. Mark is separated from his wife, Alison Gelb Pincus, the co-founder of home decor business One Kings Lane. She also may be trying to get out of her prenup.

The couple married in 2008, a year after his company grew into a $1b company. Mark has a prenup. Unfortunately for him, in filing for divorce, his wife Alison has asked the court to set aside the agreement. Why? Because the value of his company increased so much after the marriage.

Prenuptial agreements are often used in high tech industries, and in Silicon Valley in particular, to protect ideas and future income – not just current salaries and property. This makes perfect sense in an age when intellectual property is so highly valued.

Because of Florida’s policy of enforcing agreements, prenups can be difficult to void – but not impossible. Florida has both case law and a statute to help lawyers, judges and the parties determine if a prenuptial agreement, for example, is enforceable.

In Florida, to test the validity of a prenuptial agreement, courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure.

The Farmville case is a tough one. The spouse challenging the agreement, Alison, is herself very well off. She is the co-founder of One King’s Lane, which she sold to Bed Bath and Beyond for $30m. She is not exactly a stay-at-home mother who cannot work or lacks assets of her own.

Difficult to Value Assets

In divorce, determining the value of certain assets – businesses, stock options and restricted stock – is more complicated than it seems. As the shareholders of Snap Inc. have learned, startups may see their values skyrocket for their IPO, but later fizzle once earning reports become public.

Generally, anything you own before marriage counts as your separate or non-marital property. However, asset or debts acquired after the marriage is generally considered as marital or community property. In the event of a divorce, the law requires it to be distributed equitably, which usually presumes and equal split between partners.

A couple of weeks ago, tech analysts were hailing the IPO of Snap Inc. as a triumph. But a day after Snap posted a $2.2bn loss and decelerating user growth in its first earnings report as a public company, the stock’s value crashed.

Messy divorces don’t come cheap. When Elon Musk divorced his first wife Justine the two sides racked up $4m in legal and accounting bills in two years – around $170,000 per month. A prenuptial agreement can limit the costs of a divorce.

The Guardian article is here.

 

International Prenups

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Welsh actress, Catherine Zeta-Jones married American actor, Michael Douglas. They reportedly have a prenuptial agreement that states she gets $2.8 million for each year of marriage, and a $5 million bonus if Michael has an affair.

While there are many benefits to prenuptial agreements in American marriages, the benefits of international prenups are multiplied when the spouses are from different countries, or hold foreign assets, or who contemplate living in other countries.

Prenuptial Agreements

A prenuptial agreement, sometimes called an “antenuptial agreement”, and/or “premarital agreement”, are commonly called “prenups.”  A prenup is a legal contract, much like any other legal contract, and it is entered into before a marriage by the couple intending to marry.

The contents of prenuptial agreements can vary widely. However, prenups commonly include clauses that spell out how to divide property accumulated before and after the marriage, and support or alimony in the event of divorce or death.

I’ve written on some of the more extreme clauses people insist be put in the prenups before. For example, prenups can include provisions to cover you in the event your spouse engages in excessive drug use, has extra-marital affairs, becomes an excessive spender, or begins a gambling habit.

International Prenuptial Agreements

A prenuptial agreement for international couples is generally a good idea, but international prenups have their own set of unique problems. For example, a prenup that is valid in Florida, may not be valid in another American state, let alone a different country.

When people live in different countries, hold foreign assets, or are planning to either marry overseas, or live in other countries, they should try to consider the law of all jurisdictions where they contemplate living.

There are many advantages and disadvantages to having an international prenup which states that the law of one country governs your divorce.

Issues with International Prenups

International prenups can involve couples from different countries, or couples from one country who live in different countries, or couples who have assets located overseas.

Since the law of each country can be very different, the choice of law clause in international prenups can take on great importance. Additionally, the language used in prenups can be extremely important for two reasons.

First, legal terms in the United States may have different legal meanings in other countries, or may not be terms recognized under foreign law.

Second, the enforceability of international prenups may just depend on whether it was understood by the signors, and they may not speak the language the agreement was written in sufficiently.

Whether in the United States, or in another county, make the effort to disclose all of the finances, even if financial disclosure may be waived in your country.

Additionally, any prenup should be signed well in advance of the wedding. In an ideal situation, the agreement should be fully signed before the wedding invitations even go out.

The Suggest article on the Zeta-Jones prenup is here.

 

Cohabitation Agreements: Prenups for the Unmarried

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Agreements on Wednesday, August 3, 2016.

Increasingly, couples are living together without marrying. Legally, that’s more complicated than marriage, because you don’t have as much legal protection. Fortunately, there is an agreement for that.

According a recent survey of the American Academy of Matrimonial Lawyers (AAML), 45% of the members find that legal disputes between unmarried couples who had previously lived together have been on the rise during the past three years. In all, 26% have cited an increase in cohabitation agreement requests from unmarried couples.

I’ve written about the need for cohabitation agreements before. It is important to remember that not being married does not prevent a partner from attempting to make a claim on your assets once a live-in relationships ends.

Some of the protections that cohabitating couples lose out on are the protections provided by divorce laws: the presumption that the father is the father, inheritance laws, survivor’s benefits and many others.

A cohabitating couple that decided to split up may encounter the same conflicts about dividing the house, splitting the joint bank accounts, paying off the joint loans timesharing and child support that married couples have. However, the laws are not the same.

As the Huffington Post reports, if cohabiting partners do not have a mutual understanding of their financial, the legal consequences may lead to financial devastation for one of the partners. It could also produce significantly complex property disputes that cause both sides to incur substantial legal fees to address.

Cohabitation Agreements are designed primarily to protect financial interests. Before moving in with a partner, a previously signed cohabitation agreement can serve as an effective tool to ensure that your finances and assets are adequately protected.

Many times, unmarried cohabitants put their labor and own money into a live-in relationship, many of which are long in duration, because they ultimately expect that they will receive benefits from the other party arising from the commitment to be in a long term relationship. In many cases, those expectations are dashed when the relationship ends without the benefit of a cohabitation agreement.

In order to minimize doubts, and to ensure that both parties understand each other’s expectations, a legal cohabitation agreement may help. Some general tips for an agreement can include:

– Support payments

– Selling or keeping the jointly owned home

– What to do with jointly owned property if someone dies

– Medical decisions

– Who pays household bills and taxes

Agreements are useful in resolving a big oversight in the law. This is especially important as more and more couples choose to live together rather than marry.

The Huffington Post article is here.

Prenups for Couples Not Marrying?: Cohabitation Agreements

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By The Law Offices of Ronald H. Kauffman of Ronald H. Kauffman, P.A. posted in Agreements on Tuesday, September 22, 2015.

More and more couples are choosing to live together and not get married. Not marrying may seem like it’s simpler. But legally, it is more complicated because you don’t have any legal protection. Fortunately, there is an agreement for that.

I’ve written about cohabitation many times. Living together and having children is becoming more common than ever before. Between 2006 and 2010, nearly half of heterosexual women said they were not married to their spouse or partner when they first lived with them, the report says. That’s up from 43 percent in 2002, and 34 percent in 1995.

There are a lot of reasons why couples choose to live together rather than get married. One factor that is likely considered is fear of a stressful and expensive divorce.

However, while cohabitating couples may think they are simplifying their lives, they miss out on many legal protections of that married couples have.

Some of the protections that cohabitating couples lose out on are the protections provided by divorce laws: the presumption that the father is the father, inheritance laws, survivor’s benefits and many others.

A cohabitating couple that decided to split up may encounter the same conflicts about dividing the house, splitting the joint bank accounts, paying off the joint loans timesharing and child support that married couples have. However, the laws are not the same.

One way cohabitating couples can remedy this oversight is to create the missing legal rights for themselves, by drafting a cohabitation agreement. Just like a prenuptial agreements, a cohabitation agreement is a written legal document reached between a couple who have chosen to live together but are not legally married.

An agreement can help a couple against expensive litigation should their relationship end. Agreements can provide for property divisions and inheritance rights and level the playing field with married couples.

Cohabitation agreements can address:

– Support payments

– Selling or keeping the jointly owned home

– What to do with jointly owned property if someone dies

– Medical decisions

– Who pays household bills and taxes

Agreements are useful in resolving a big oversight in the law. This is especially important as more and more couples choose to live together rather than marry.