The Law Firm of Anthony Diaz

(407) 204-9069
Listen to the Divorce Hour

Prenuptial Agreements

Protecting Your Assets: Pre and Postnuptial Agreements Explained

By

We have all heard people facing divorce lament that they will “lose all their stuff” in the divorce, whether that is actually true or not.

For many people, the uncertainty of what could happen to their assets and property or money in a divorce is a deterrent to even getting married in the first place. It should not, and need not, be or feel this way, and one way that couples can go into a marriage with some security should things not work out as planned is through the use of prenuptial agreements, executed before marriage, and postnuptial agreements, which are executed during the marriage.

What Do These Agreements Do?

Husband and Wife

Both of these types of agreements do the same thing: they set forth the rights of the spouses in the event that there is a divorce later on down the road.

These agreements are most often used to protect property or assets, providing that one spouse or the other will or will not receive certain property or setting out how much of a given asset each spouse would get in the event of a divorce.

These agreements can also provide or take away rights to alimony, but they cannot be used for predetermined rights that have to do with children, such as custody, timesharing, or child support.

Marital and Non-marital Property

Pre and postnuptial agreements will often list property that is owned by the couple, or list property that either one spouse, individually, is bringing into the marriage. The agreement will often state that the property or assets will remain that of one spouse or another, even on divorce.

These agreements often prevent the common problem of non-marital property from becoming marital upon marriage.

For example, even though a wife may have had, started, and owned a business before marriage, if the couples are married, and the assets of the business are used for marital purposes, or if the husband puts marital time, money, or assets in the business, that could transform the business from non-marital (the wife’s alone) to marital property subject to division by a court.

However, the use of prenuptial and postnuptial agreements avoids this problem. You can state that whatever asset you want that is non-marital stays that way.

Prenuptials can even state who gets property when that property or asset does not exist at the time the contract is executed. So, for example, it could say that should either spouse start a business or get an inheritance in the future, the assets will remain the property of that spouse.

Protection for Relatives

Because pre- and postnuptial agreements ensure that nonmarital property listed in the agreement stays that way, they can also allow relatives more freedom to give assets to the marriage.

So, for example, a wife’s mother who wants to pay for the couple to own their first home can ensure that the husband does not get the home in the event of a divorce, so long as the spouses agree to this in the agreement. Relatives are free to give whatever they want to the marriage safely, knowing that if there is a divorce, their relative will get that asset or property.

Use and Possession of Property

These agreements can also provide other benefits that do not have to do with which spouse gets what.

For example, parties can agree on who will get to use or live in the marital home while the divorce is pending. It can state which spouse gets to use other assets, like vehicles, boats, or other benefits.

If spouses own a business, it can address what happens to both spouses in relation to the business—for example, whether both spouses will continue to get dividends or profits from the business, and what level of management both spouses will continue to have in the business.

Elective Share

Parties can also waive elective share in pre- and post-nuptials. The elective share is property one spouse gets from the other, should the other spouse pass away. Parties may prefer that children of a prior marriage, parents, or some other relative receive their assets instead of the new spouse, and this can be accomplished through a pre or postnuptial.

Attorneys Fees if There is a Divorce

The agreements also can state who will pay attorneys fees in the event of a divorce, including temporary fees, incurred while the divorce is going on. This can avoid a situation where a spouse with lesser assets feels powerless in a divorce, or feels like they “can’t afford a divorce.”

While these agreements cannot alter any rights regarding child custody or child support, knowing that the other spouse will have to pay attorneys’ fees can help a spouse fight for rights regarding the children, if need be, in a divorce.

Flexibility

Because these are both contracts, you and your spouse are free to tailor them how you see fit. You can include all your assets or only some of them. You can state who gets what asset in a divorce or come up with a method or formula to be used later on in the event of divorce that will tell the spouses how much of a given asset that they get. You can determine in advance how assets that don not have a definitive value will be valued or appraised.

Making Them Legal and Enforceable

Both pre and postnuptial agreements are similar in their procedural requirements—that is, what it takes to make them legally binding and enforceable.

One absolutely mandatory requirement is that both parties must disclose to the other, in full, all of the assets that they own before the contract is signed. It does not matter that the other spouse may know what you own anyway. Disclosures of every kind of asset (often done with a financial affidavit form) are mandatory.

Also mandatory is providing the other side the opportunity to get their own attorney if they so choose. When it comes to prenuptials, that means that the agreements must be exchanged with enough time for both parties to get their own attorney. Parties should never coerce, pressure, or threaten the other spouse, in order to get them to agree to either type of agreement.

Both agreements can be challenged if they are not executed properly and with these procedural requirements, so it is important to make sure you are not pressuring the other spouse to sign and to make sure you have fully disclosed to the other spouse every asset that you own.

Let us help you get some peace of mind with enforceable pre or post nuptial agreements.

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124, Winter Park, FL. 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email an*****@************aw.com or visit anthonydiazlaw.com for more information.

And if you found this article helpful, please leave us a review HERE.

Postnuptial Agreements: Weighing the Benefits

By

If someone asked you what the benefit of a prenuptial agreement is, you likely would have some kind of answer or at least, a general understanding of why people sign prenuptial agreements. But postnuptials are less often used and are seen as a bit more controversial to many.

But there are benefits to postnuptial agreements, and in the right situation, a postnuptial agreement can help you in ways you probably didn’t think about.

What is a Postnuptial Agreement?

Premarital Agreement

A postnuptial agreement is, as the name implies, an agreement that you sign with your spouse that is almost exactly like a prenuptial, except for the fact that it is signed during the marriage, not beforehand.

The agreement can address things like who will get what property, what property is considered marital or non-marital, alimony, use of the marital home, and other issues.

Married couples are not supposed to be adversaries, and they certainly are not at “arm’s length” from each other, as parties to a contract are supposed to be. There is the inherent risk of coercion, pressure, or misrepresentation between spouses who are signing a contract between them, whether done purposely or whether it happens just because of the nature of the marital relationship.

To be valid, there must be witnesses to the signing of the agreement, which must be in writing, and although a married couple likely already knows each others’ finances, assets, and possessions, a full financial disclosure to each spouse must be made.

This means producing all relevant books and records—it is not enough to just say a spouse had access to records or “could have looked at my bank account.”

The Benefits of a Postnuptial

So why would anybody want a postnuptial agreement?

In many ways, the reasons are the same that anybody would want a prenuptial agreement: to minimize or avoid completely the time, heartache, and expense of a contentious, bitter divorce, should that happen.

A postnuptial agreement can give the parties some security, knowing what exactly they will get, keep, or give up in the event of a divorce. That is in addition to the security of knowing that there will be no or minimal fighting over these things should a divorce happen.

Postnuptials may help keep marriages intact. A couple on the verge of a divorce may opt to stay together and try to make things work if they know that there is a postnuptial in place. So, a party may say, “We can try to work on the marriage if we come to an agreement as to what happens if things don’t work out.”

Avoiding Risks or Waste of Marital Assets

A spouse may opt to stay in a marriage despite knowing that one spouse is taking a big business financial risk or knowing that a spouse is wasting money. A spouse may just have a sense that something is being hidden, money is being spent, or that loans are being taken out by the other spouse. Rather than just leave the marriage, that spouse may be more inclined to stay and work things out, knowing a postnuptial is in place.

Inheritances

A postnuptial can help you keep assets that are yours but which you may want to use to help the marriage.

For example, imagine that you come into an inheritance. That is, at least at first, your property. But the marriage needs that money—perhaps you want to pay off the mortgage, help with debt, help your spouse start his or her business, or use the money for anything else that benefits the marriage.

By doing that, you potentially transform that inheritance from non-marital property, not subject to division, into marital property that could be divided in a divorce.

But a postnuptial can prevent that. If the spouses agree that the inheritance is and remains non-marital property, it frees that money up to be used to benefit the marriage, without the inheriting spouse fearing that if there is a divorce, that non-marital property will be considered to be marital.

Using Non-Marital Assets

A postnuptial agreement can allow spouses to put one spouse’s money into an interest-bearing account or into some other kind of investment and use the interest however they choose, without fear that doing so would make the principal investment into marital property, subject to division in divorce.

Protecting Outsiders Gifting Assets

Even third parties outside the marriage may benefit from a postnuptial.

Take the parents of a spouse who want to help the new couple buy a home. However, they want to make sure that if there is a divorce, the home (or money from the sale of the home) goes to their child—that it is not divided up between the spouses on divorce.

A postnuptial can specify that a gift from someone outside the marriage to a spouse remains the property of that spouse, thus allowing the third party (the parent in our example) to give whatever is needed and allowing the marriage to benefit from the use of the gift.

Sacrifices for the Marriage

Postnuptial agreements can make it easier and safer for one spouse to forego their career for the benefit of the marriage.

Imagine a spouse who gives up a career opportunity to help the other spouse with their business or to help raise kids. That spouse can be protected in the event of a divorce through the use of a postnuptial, making it safer and more palatable for the spouse to give up career or other personal opportunities to help benefit the marriage.

Changes in Your Life

Any change in lifestyle or situation that could affect finances may call for a postnuptial agreement. This can include blended families, or someone losing a job, or getting a  significant promotion. Inheritances, bonuses, financial windfalls, or even medical hardships may cause a couple to want to make sure they are protected in the event of a divorce.

A postnuptial agreement can be a valuable tool to help you protect your assets and your marriage.

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124, Winter Park, FL. 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email an*****@************aw.com or visit anthonydiazlaw.com for more information.

And if you found this article helpful, please leave us a review HERE.

Prenuptial Agreements: What You Need to Know

By

Many of us think we are familiar with what a prenuptial agreement is and what it does. But there are many misconceptions out there about prenuptial agreements. Here are some things that you may not know—and that you really should know—when it comes to prenuptial agreements.

You are Not Getting Divorced

Some people feel that if their soon-to-be spouse asks for a prenuptial, it must mean that they anticipate the marriage falling apart in the future. This is simply not true.

Think of a prenuptial agreement as security or insurance. It is peace of mind, not to mention an assurance that fighting will be minimal should a divorce happen. You may also find that the things you want to protect in a prenuptial agreement are not major concerns for your spouse after all. For example, if you want to make sure your share of your mom’s family business never goes to your husband in a divorce, you may find that he is perfectly OK with that.

Disclosing Everything

If you do want a prenuptial agreement, you will have to make a full disclosure of your assets. Many people skip this step, assuming that their soon-to-be spouse “knows all about my finances anyway.” But that is not good enough. A full disclosure, on paper, with supporting documents is necessary.

Disclosing all assets means all assets. That includes cryptocurrency, interests in businesses, dividends from stocks, or perks from work. It can also include contingent assets that have not been received yet, such as anticipated bonuses from work or inheritances from ill relatives you anticipate receiving.

Remember that one big way that people try to get out of prenuptial agreements after they are signed is by saying that money, property, or assets were concealed from them when the prenuptial was signed. Do not risk having a problem later on. Your marital and family attorney can help you draft the forms and affidavits and help you compile the documents that you need to make full disclosure to your soon-to-be spouse.

No Stress or Coercion

One other way that people who sign prenuptial agreements try to get out of them later is by saying that they were pressured or coerced. One way this happens is by forcing a spouse to sign a prenuptial agreement too close to the marriage date.

Both spouses should have enough time to read, consider and negotiate a prenuptial agreement. Drafting an agreement five days before your wedding day will open the door to a spouse one day saying, “I signed it because it was so close to the marriage that I couldn’t say no.”

Do not ever discourage your spouse from getting legal representation. Saying things like, “Why do you need an attorney to review the prenuptial; why don’t you trust me?” is classic coercion—never do anything to discourage the other side from having a proposed prenuptial from being reviewed by an attorney. That includes giving someone a proposed prenuptial so close to the marriage date that there is no time to have an attorney review and negotiate it.

It should go without saying–never threaten your spouse, in any way, as a way to entice him or her to sign an agreement.

Do Not Forget Debts

Everybody wants to agree on who gets what in a prenuptial agreement. But what about debts?

Often a spouse will marry another spouse who is in debt or who anticipates borrowing money during the marriage, and the non-borrowing spouse wants to make sure that they are never liable for that debt. Any debt that you may acquire, either jointly in both your names or individually, should be referenced in your prenuptial agreement.

Do not forget about how any debts will be divided, keeping in mind that in some cases, you may have joint accounts, and you may be unable to remove a spouse’s name from that debt, even after your divorce.

 Children, Custody, and Support

As a general rule, you cannot agree on issues regarding the kids in prenuptial agreements. In other words, you could not agree on who will get custody or who will have visitation. That is not to say that you cannot agree to those things later as part of a negotiated settlement of your divorce. It just means that you could not say that mom will have the kids 60% of the time in a prenuptial, and years later, upon a divorce, assume that this provision will be legally binding.

The same goes for child support. Child support will be determined by the courts at the time of the divorce. An agreement before the marriage to pay a certain dollar figure will usually not be legally enforceable.

Death Before Divorce

Your prenuptial agreement may or may not apply if a spouse dies. Do not assume that the death of a spouse (during the marriage) will automatically trigger the division of property that you contemplated in your prenuptial agreement.

If your prenuptial agreement conflicts with either your or your spouse’s estate planning documents (like a will or trust), there is a good chance that the prenuptial agreement will govern. Of course, that issue will ultimately be decided by the probate judge, but it is a good reason to have your prenup expertly crafted by an experienced attorney.

Sentimental Value

Do not forget the items that have value to you but do not have actual significant financial value. You may have collections, family heirlooms, or items of sentimental value, like items that your kids make for you, all of which you can include in your prenuptial agreement.

That includes pets, which are treated like property by New Jersey courts. But you can, in a prenup, agree in advance that your dog will remain your dog, even should the marriage not work out.

It is never too early to start planning for the future. A prenuptial agreement is there to keep both you and your soon-to-be spouse safe. Ask us about how we can help.

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124, Winter Park, FL. 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email an*****@************aw.com or visit anthonydiazlaw.com for more information.

And if you found this article helpful, please leave us a review HERE.

Why Do Couples Sign Postnuptial Agreements?

By

You have probably heard of, or you are aware of, a prenuptial agreement. A prenuptial agreement is an agreement that details what will happen to certain property named in the agreement, in the event of a divorce. It may also account for things other than property, such as alimony or attorneys fees.

What About After the Marriage?

Prenuptial agreements, as the name implies, are signed before the marriage takes place. But many people are unaware that there is another type of agreement that can be entered into between married couples after the marriage, called the postnuptial agreement. Although not as well known and certainly not as common as a prenuptial agreement, a postnuptial agreement may have some use to some married couples.

What is in a Postnuptial Agreement?

A postnuptial agreement does and can include everything in a prenuptial agreement. The only real difference is the time of the signing of the agreement, as a postnuptial will be signed while the parties are actually already married.

The postnuptial agreement can discuss what property will remain that of either spouse as non-marital property, thus making that property non-divisible on divorce. It may specify that some property will be divided on divorce and state exactly how the property will be divided between the spouses.

It may detail which spouse will be liable for which debts, who will live in the marital home upon divorce, or who will pay temporary attorneys fees or expenses while the divorce is going on.

Benefits of a Postnuptial Agreement

Just like a prenuptial, a postnuptial has the benefit of minimizing fighting later on in the event of a divorce. By agreeing to certain issues beforehand, the parties are minimizing what will be fought over when and if the divorce happens. In that way, a divorce may be cheaper, or quicker, given that there are fewer issues to fight about.

Are They Valid and Binding?

But one problem with a postnuptial is that the parties are already married when the agreement is signed. This can be a problem; the law doesn’t want a husband and wife to be at odds or to be in an adversarial position to each other.

Whenever contracts are signed in any capacity, the law wants the parties to a binding contract to be at “arm’s length” from each other, meaning that they are independent, neutral, and to some extent, both looking out for themselves–something that a married couple definitely is not.

Requirements for a Binding Agreement

This means that if certain requirements are not met, the postnuptial agreement can be challenged in court and potentially invalidated.

While in many cases, oral agreements are enforceable, when it comes to postnuptial agreements, they are not—postnuptial agreements must be in writing. Additionally, simply having a husband and wife sign the agreement will be insufficient; the law requires that there be two witnesses to the signing of the agreement.

There must be a full financial disclosure between the spouses. Simply saying, “We were married, he had access to the accounts, he knows what property I had when we signed the agreement,” will not suffice. It does not matter how much each spouse actually knows about the other’s property, holdings, income, bank accounts, or finances—full disclosure must be made by each spouse to the other before the agreement is signed.

Holding something back, or being less than truthful about finances, is one way that an aggrieved spouse, upon a divorce, will try to challenge the validity of the postnuptial agreement.

Although in most cases, courts do not look at who made out better in a contract, the divorce court will, with a postnuptial agreement. That means that one side should not get everything, and the other get nothing. Effort should be made for the agreement to be somewhat balanced as to both spouses.

Why Sign or Enter Into a Postnuptial Agreement?

There are many reasons you may want to enter into a postnuptial agreement. Often, the reasons may have to do with a spouse who has done something wrong or where there is suspicion of wrongdoing or wasting of marital assets.

For example, if a spouse were to develop a gambling habit, or where a spouse may be spending excess money on drugs or alcohol, the other spouse may not want to leave the marriage—but that spouse may want to protect him or herself, knowing that if the problem continues, a divorce may be a possible option.

If a spouse suddenly incurs significant debt, that may be a reason. For example, imagine a spouse who, against the wishes of the other spouse, takes out thousands of dollars in debt to fund a business. The other spouse may be supportive—but also may not want to be saddled with that debt in the event that there is a divorce.

Sometimes, a spouse just suspects something is off. Perhaps your spouse seems to be hiding money, finding money in places you did not know existed, or buying things you did not think you could afford. Maybe there is money in joint bank accounts that seems to be disappearing faster than you can explain.

If you suspect that another spouse is exerting excess control over what should be marital money, you may want to immediately know what assets are there, what the other spouse actually owns or makes, and to make sure that when and if a divorce happens, you are not left with nothing, or having to search endlessly for the financial truth about your spouse’s finances when a divorce happens.

One situation where a postnuptial may benefit you would be to protect the inheritance of children from a separate, prior marriage. You may not want to lose property in a divorce that you are holding for your children of a previous marriage to inherit. A postnuptial can protect this property.

Could a postnuptial agreement be right for you? We can help you make that determination and help you understand what can and should be included in your postnuptial agreement.

Anthony J. Diaz is an experienced family law attorney focusing on Mediation and Collaborative Divorce. His offices are located at 2431 Aloma Ave Suite #124, Winter Park, FL. 32792 and 3720 Suntree Blvd., Suite 103G, Melbourne, FL. 32940.

You may contact Anthony Diaz by calling 407-212-7807 or by email an*****@************aw.com or visit anthonydiazlaw.com for more information.

And if you found this article helpful, please leave us a review HERE.