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Make Sure Your Prenuptial Agreement Isn’t Ambiguous

Prenup5

Premarital or prenuptial agreements (“prenups”) are, at their core, contracts, and are read as such. That means that where courts can apply common sense, or the obvious meaning of language can be used, that’s how courts will interpret the agreements. But when there is ambiguity in the language used, courts will have to turn to the intentions of the parties at the time the agreement was made.

Sloppy Language Can Cause Problems

This can cause serious problems in prenups. Because people often get sloppy when using language in the agreement, or they use forms they found online or in stores, often what is in the prenup doesn’t clearly state what the parties want it or intended it to state.

Let’s take a basic idea in prenups: That any property owned by a spouse before marriage will remain the property of that spouse in the event that the marriage ever dissolves. This seems pretty straightforward, except that non-marital property can easily be transformed, even unintentionally, into marital property, based on how the couple treated that property during the marriage.

For example, assume the wife owned a business before the marriage in her name only. Over the course of the marriage, the husband works at the business for free, provides labor for free, they share in the profits which are used to pay for family assets, and perhaps the husband even makes a capital contribution in the business.

That business, once owned just by the wife, could easily be interpreted to have been converted into marital property.

Florida Supreme Court Makes Issue Even More Important

The Florida Supreme Court ruled on just this matter recently, when a premarital agreement clearly stated that pre-marital property would belong to the spouse who owned their own property before the marriage. The husband had a house that was his before the marriage. The problem came when the couples lived in the husband’s real estate and otherwise treated the property as belonging to both of them.

The Supreme Court still held the prenup was valid–except it also found that based on the behavior of the parties, during the marriage the husband had “gifted” the home in part to the wife, transforming it into marital property. Actual title to the property remained in the husband’s name only, and there was never a declaration in writing, even informally, that anything was being gifted to the wife. 

Drafting of Prenups is Changing

This calls into question how prenups are drafted, and how to use language to avoid a finding that property belonging to one spouse is deemed as gifted to the other. The standard prenup language won’t cover this kind of situation, and parties who want full protection need to be mindful of this potential problem.

Contact Tampa family law attorneys at the Pawlowski//Mastrilli Law Group for a help and advice about drafting or reviewing any prenuptial agreements you may need.

Resource:

efactssc-public.flcourts.org/casedocuments/2015/1881/2015-1881_disposition_138428.pdf

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