Tag: Getting Around a Prenup

Can a Prenuptial Agreement Make You Smile More

Posted by Ron Kauffman on

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

Posted by Ron Kauffman on

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.

Celebrities and Prenuptial Agreements

Posted by Ron Kauffman on

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.

Enforceability of Islamic Prenuptial Agreement

Posted by Ron Kauffman on

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.

Google Divorce and Prenups

Posted by Ron Kauffman on

If you google divorce and prenups, you will find different results based on which state you are in. One thing is for sure, Elon Musk’s brief affair with the wife of Google co-founder Sergey Brin, will get you much different search results, and may even call into question an expensive prenup.

Divorce Prenups

I’m Feeling Lucky

Elon Musk is the richest person in the world, with an estimated fortune of $240 billion. While Sergey Brin is no slouch himself, he is clearly struggling to catch up in the rankings with a meager $95 billion.

Despite their competitiveness, Brin provided Musk with about $500,000 for Tesla during the 2008 financial crisis, when Tesla was struggling to increase production. In 2015, Musk gave Brin one of Tesla’s first all-electric sport-utility vehicles.

But in recent months, there has been growing tension between the two. Reportedly, Brin ordered his financial advisers to sell his personal investments in Musk’s companies

Brin filed for divorce from Nicole Shanahan in January of this year, citing “irreconcilable differences,” according to records filed in Santa Clara County Superior Court. The divorce filing was made several weeks after Brin learned of the brief affair, people have said.

At the time of the alleged liaison in early December, Brin and his wife were separated but still living together, according to a person close to Shanahan. In the divorce filing, Brin cited Dec. 15, 2021, as the date of the couple’s separation.

But Shanahan’s side is arguing that the prenuptial agreement they entered was signed under duress, while pregnant.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements before. Prenuptial agreements are not just for computer programmers and awesome car makers, and they are about much more than just resolving expensive millions of Tesla stock acquired during a marriage.

Any couple who brings any personal or business assets into their marriage can benefit from a prenuptial agreement. Prenups are important to have in place before a couple starts investing in start-up, electric car companies, DNA ancestry search companies, 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 Shanahan may be attempting using the duress defense. When ruling on the validity of a prenup, Florida courts must consider things such as fraud, coercion, in addition to the unfairness of the agreement, whether there was any financial disclosure, and of course, duress.

Ludicrous Mode

About 11 hours after the Wall Street Journal article about the affair was published online, Musk tweeted:

This is total bs. Sergey and I are friends and were at a party together last night!”

Over the past two months, Musk’s personal life has drawn considerable attention. He has been accused of exposing himself to a flight attendant at SpaceX, which he denied. He also reportedly had two children late last year with a female executive at another company he co-founded, Neuralink. One of his 10 children has publicly disavowed him.

Then there’s Twitter. Earlier this month, Musk sought to back out of an agreement to buy Twitter, saying the company hasn’t provided the necessary information to assess the prevalence of fake or spam accounts. Twitter has sued Musk to force him to honor the deal, and a Delaware court has agreed to an expedited trial in October.

Brin and Shanahan already were facing problems in their marriage in the fall of 2021, primarily because of Covid pandemic shutdowns and the care of their 3-year-old daughter.

The liaison with Musk took place in early December 2021, at the Art Basel event in Miami. The alleged affair happened after Musk had broken up with his on-again, off-again girlfriend, the singer Grimes, in September.

Brin and Shanahan are now involved in divorce mediation, with Shanahan seeking more than $1 billion. The two sides have yet to come to an agreement, with Brin’s side claiming that Shanahan is asking for much more than her prenuptial agreement entitles her to.

The Wall Street Journal article is here.

Enforcing an Islamic Mahr Prenuptial Agreement

Posted by Ron Kauffman on

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

Posted by Ron Kauffman on

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.

 

Prenuptial Agreements and Waiving Alimony

Posted by Ron Kauffman on

Actor Robert De Niro is wondering why he signed a prenuptial agreement since it doesn’t seem to be waiving alimony very well. De Niro’s lawyer is claiming the actor is being worked to death to keep up with his estranged wife’s extravagant lifestyle — including her “thirst for Stella McCartney” and $1 million-plus diamond rings.

Prenup Alimony

Aging Bull

According to De Niro’s lawyer during a virtual court divorce hearing:

“Mr. De Niro is 77 years old, and while he loves his craft, he should not be forced to work at this prodigious pace because he has to/ When does he get the opportunity to not take every project that comes along and not work six-day weeks, 12-hour days so he can keep pace with Ms. Hightower’s thirst for Stella McCartney?”

He could get sick tomorrow, and the party’s over,” she said of the famed “Raging Bull” and “The Irishman” star. De Niro phoned into the proceeding, while Hightower appeared by video link.

She also claims De Niro is already a tax delinquent again — with the paychecks from his next two movies to offset his latest multimillion-dollar bill to Uncle Sam, his divorce lawyer claimed.

Florida Prenuptial Agreements

I’ve written about prenuptial agreements and the De Niro divorce before. Prenuptial agreements are not just for celebrity sports figures, and they are about much more than just resolving uncertainty in a marriage.

Any couple who brings any personal or business assets to the union can benefit from one. They are also 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 courts must consider things such as fraud, duress, coercion, in addition to the unfairness of the agreement, and whether there was any financial disclosure.

And as Robert De Niro is figuring out, even though a prenuptial agreement can waive alimony, temporary support during the divorce proceedings, and child support, may not be waivable in a prenuptial agreement. Florida courts have, recognized that, notwithstanding language in the prenuptial agreement to the contrary, spouses are still entitled to temporary support. In Florida, it is against the public policy to enforce any provisions waiving temporary support.

The War With Grandpa

The recent New York hearing came as the couple squabbles over how much temporary support De Niro should have to pay to Hightower until the divorce is finalized.

Hightower’s lawyer, Kevin McDonough, argued that since filing for divorce in 2018, De Niro has unfairly continued to cut the amount of money he has been sending his estranged spouse, including involving her credit-card expenses, going from $375,000 a month to just $100,000 monthly as recently as January.

But Krauss claimed that in the years leading up to their separation, Hightower was spending more and more. In just 2019, she had spent $1.67 million — including buying a diamond worth $1.2 million from jeweler Kwiat, the lawyer said.

Krauss said De Niro is behind millions of dollars on his taxes and that the money from his next two movie projects will go toward paying off those liabilities. De Niro — who was clobbered with a $6.4 million tax lien in 2015 — has previously said the pandemic decimated his finances.

“If he wants to direct or compel his family to leave their longtime home while he’s spending millions and millions and millions on himself, on his own homes, on renovating what his lawyers tongue-in-cheek call his cottage in Montauk, which he has poured millions and millions into over the past couple of years, he can take that position,” McDonough claimed of the actor.

“There have been no cutbacks and no slowdowns in Mr. De Niro’s lifestyle whatsoever,” McDonough said. Until the prenuptial agreement goes into effect, De Niro is supposed to pay her so she can “maintain the status quo” lifestyle she had when they were married — while also crying foul on Krauss’ claims that De Niro is struggling financially.

The Fox news article is here.

Prenups for Millennials

Posted by Ron Kauffman on

Millennials are often known to buck convention, and that may be true with prenups. While prenups have been most common among celebrities, the rich, and couples entering second and third marriages, more young people are requesting them.

Millennial Prenups

Closing Time

The term Millennials generally refers to the generation of people born between the early 1980s and 1990s, and as the Wall Street Journal reports, younger adults of all income levels are drafting prenups.

Millennials are not only trying to protect assets accumulated before and during marriage but to address societal realities that weren’t necessarily present or common years ago, such as a desire to keep finances separate, student debt, social-media use, embryo ownership and even pet care.

Experts point to the fact that many millennials are children of divorced parents and have had an intimate look at what can happen financially when a marriage dissolves. At the same time, the stigma or taboo that used to be associated with discussing money before marriage is slowly disappearing.

Some millennial couples who want to maintain a clear separation of their finances during marriage are using prenups as a workaround for state laws that would otherwise treat certain assets as marital property.

This mind-set change is even true for clients who don’t have significant assets to protect going into the marriage, lawyers say. Some millennials want to keep their finances—current and future—separate and businesslike, which would allow them to leave a marriage, if necessary, without many strings attached.

Florida Prenups

I’ve written about prenuptial agreements before. Prenuptial agreements are about more than just exploring the strange new world of marriage. 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.

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.

All the Small Things

As the Wall Street Journal article further explains, for young couples who haven’t been married before and don’t have children, prenups need to anticipate all sorts of questions related to potential alimony payments, such as: Will one of you stay home with children or do you both plan to continue working? What might each of your potential incomes be? Will you need job training?

Many younger professionals might think to waive alimony completely, especially if they both have their own careers and lead separate financial lives. However, if there is a chance that one spouse could be out of the workforce for a considerable time, beyond a standard maternity or paternity leave, to raise children, it could impact future employability and earning capacity.

Many millennials are also going into a marriage with significant student and credit-card debt, which also is a change from the past. A recent Fidelity Investments report, for example, found that millennials in 2020 had an average loan balance of $52,000.

As a result, handling debt issues are making their way into prenuptial agreements. One couple, where a wife-to-be had $75,000 in student-loan and credit-card debt, the couple added a provision to their prenup that said any marital assets used to pay off her debt had to be reimbursed in the event of the divorce.

Another couple used a prenup to address how any future student debt taken on during the marriage would be handled. They agreed that this type of debt would be considered the borrowing party’s personal debt, not a marital debt.

As more couples decide to delay having children until later in life, more prenuptial agreements are including directions for dealing with genetic material in the event of divorce. In a prenuptial agreement, a couple can agree that in the event of a divorce, their embryos would be donated to stem-cell research through a local stem-cell bank. Neither party could use the embryos without the consent of the other party.

Pet provisions also are becoming more commonplace in today’s prenups by people who view their pets as their de facto families. A prenup can be crafted with a visitation schedule, a plan to split vet bills and pet insurance costs and address what would happen if one of the partners moved far away from the other.

Some millennials want to address social media in prenups to ensure that one spouse can’t write nasty things about the other in the event they break up. However, it is easy to run into First Amendment issues.

The Wall Street Journal article is here.

 

Da Vinci Code meets the Family Code: Setting Aside a Settlement Agreement

Posted by Ron Kauffman on

The Da Vinci Code meets the Family Code as popular author Dan Brown’s ex-wife has filed a claim to set aside their settlement agreement – after their divorce ended – and sued him for money damages. The inferno in New Hampshire will deal with fraudulent financial affidavits and other claims to set aside a marital settlement agreement.

Setting Aside Agreements

Deception Point

In a lawsuit filed this week, Blythe Brown is suing Dan Brown for misrepresenting the couple’s wealth in a sworn financial affidavit he signed as part of their divorce agreement, and for intentional and negligent infliction of emotional distress.

Author Dan Brown, is a New Hampshire native. He is best known for his thriller novels, including the Robert Langdon novels Angels & Demons, The Da Vinci Code, The Lost Symbol, Inferno, and Origin. His novels are treasure hunts that usually take place over a period of 24 hours. They feature recurring themes of cryptography, art, and conspiracy theories.

Dan Brown’s books have been translated into 57 languages and, as of 2012, have sold over 200 million copies. Three of them, Angels & Demons, The Da Vinci Code, and Inferno, have been made into films.

He is being sued by his ex-wife, who now claims he engaged in “unlawful and egregious conduct” that amounted to a “proverbial life of lies” during the last several years of their marriage.

In the lawsuit filed in New Hampshire, Blythe Brown alleges that the 56-year-old author, to whom she was married from 1997 until last December, “secretly siphoned” off vast sums of money “to conduct sordid, extra-marital affairs” with women, including a Dutch horse trainer on whom he lavished extravagant gifts.

According to the former wife the lawsuit is about standing up for myself and asserting my self-worth. I have continually tried to absorb the shocking truth withheld during our divorce that Dan had been leading a double life for years during our marriage, all while coming home to me.

Florida Marital Settlement Agreements

I have written on the topic of agreements before. In Florida, different types of agreements are treated differently. A prenuptial agreement, for example would be covered under the Premarital Agreement Act.

An agreement reached, not before a marriage like a prenup, but after divorce case has already been filed, is treated with a different standard.

That’s because after a couple become involved in full-fledged litigation over divorce property and alimony rights, they are necessarily dealing at arm’s length and without any kind of special fiduciary relationship of un-estranged marital parties or single people.

In cases like the Brown case, which involved a stipulated settlement agreement made in the course of what was likely fierce divorce litigation, a former spouse challenging a litigated settlement agreement is limited to showing fraud, misrepresentation or coercion. Any kind of inquiry into the “unreasonableness” or “unfairness” of the settlement agreement to either party is usually not permitted.

Angels and Demons

Blythe also claimed credit for inspiring much of his work and coming up with the premise for “The Da Vinci Code.” She also alleged that Brown hid scores of future projects worth “millions” from her, including a television series as well as a children’s book due out in September.

The most explosive allegations, however, are the extramarital affairs. Describing Brown’s behavior as “unlawful and egregious,” Brown said she only learned about it after the pair divorced in 2019 after 21 years of marriage.

She accuses the best-selling author of secretly diverting funds to pay for gifts to an unnamed horse trainer, including several Friesian horses and financing for his lover’s horse training business. She alleges the “illegal behavior” took place in New Hampshire, Europe and the Caribbean.

“Dan has lived a proverbial life of lies for at least the past six years, seeming to be the epitome of a world-famous novelist leading a simple life in his home state of New Hampshire, while in reality he was something quite different,” the lawsuit claims.

For years, she alleges, that Dan has secretly removed substantial funds from his and Blythe’s hard-earned marital assets to conduct sordid, extra-marital affairs with women — one half his age — and to pursue a clandestine life.

Dan Brown, in a statement, said he was “stunned” by the allegations and called the complaint “written without regard for the truth.” He said he never misled his ex-wife on their finances during their divorce and that she ended up with half their holdings after they divorced.

“For reasons known only to her and possibly her lawyer, Blythe Brown has created through this suit a fictional and vindictive account of aspects of our marriage designed to hurt and embarrass me.”

Blythe Brown, a horse enthusiast who is involved in horse and carriage driving competitions, insisted she was only filing the lawsuit to stand up for herself and assert her “self-worth.”

In her lawsuit, Blythe Brown portrayed herself as inspiring Brown to give up songwriting after the pair met in 1990 and recognizing his “unlimited potential as a writer of fiction.” She also alleges she helped craft key themes and ideas for many of his books, “served as lead researcher, first-line editor, and critic, and was Dan’s literary partner in the fullest sense.”

“Indeed, Blythe and Dan formed a partnership in the literary world that was to last for nearly thirty years, taking them places that they could never have imagined,” according to the lawsuit, in which she seeks unspecified damages.

During a 2006 trial against the publisher of the “The Da Vinci Code,” the court heard how Blythe Brown was an essential contributor to his million-selling historical thriller.

Two authors unsuccessfully sued, claiming that Brown “appropriated the architecture” of their book in a high-profile London court case.

According to witness statements and court testimony, Blythe Brown led the massive research effort, supplied countless notes and suggestions and offered an invaluable “female perspective” for a book immersed in “the sacred feminine.”

In a statement, Dan Brown told the Globe he’s “stunned” that his ex-wife is “making false claims” and says he was fair and truthful in their divorce settlement. On the day that Blythe and I married, I never remotely thought that we eventually would grow so far apart.

The Boston Globe article is here.