Prenuptial agreements are commonly regarded as a means by which a spouse can protect assets in the event of divorce. A prenuptial agreement is an agreement entered into by a couple in contemplation of marriage, to be effective at the time of the marriage. While prenuptial agreements are a useful tool for outlining the rights of a spouse in the event of divorce, prenuptial agreements can also be a useful tool in estate planning to help ensure that assets are protected in the event of death and distributed as intended upon death.
A Prenuptial agreement, entered into before marriage, is enforceable in Florida if it complies with Florida’s Uniform Premarital Agreement Act. Postnuptial agreements are another type of marital agreement recognized in Florida which deal with similar issues, but a postnuptial agreement is an agreement entered into by a couple after they are already married. While this article focuses on prenuptial agreements, the discussion applies to postnuptial agreements as well.
More couples are entering into prenuptial agreements, and certain circumstances may warrant a prenuptial agreement, such as if either or both spouses have significant assets of their own, have significantly different earning capacities, have been married previously, have children from prior relationships or are expecting to receive a substantial inheritance.
Prenuptial Agreement as an Estate Planning Tool
Under Florida law, absent a valid marital agreement, a surviving spouse has certain rights with respect to the assets of the deceased spouse. Florida law generally prevents a spouse from completely disinheriting a surviving spouse. Under Florida law, if a deceased spouse did not provide adequately for the surviving spouse in the deceased spouse’s estate plan, the surviving spouse is entitled to receive what is referred to as the “elective share” in a deceased spouse’s estate. The elective share is an amount equal to 30% of the decedent’s elective estate and involves a complex calculation. Depending on the circumstances, other rights of a surviving spouse include those to an intestate share, pretermitted share, homestead, exempt property, or family allowance. However, a spouse may waive his or her right to receive an interest in the deceased spouse’s estate by a prenuptial agreement so long as it complies with the statutory requirements for such a waiver.
While a spouse may waive certain rights in a prenuptial agreement, prenuptial agreements may also outline what a spouse is entitled to receive in the event the marriage terminates by death. For example, a prenuptial agreement may provide that if one spouse dies, the surviving spouse is entitled to receive a certain amount from the estate of a deceased spouse or certain items of tangible personal property of the deceased spouse as agreed upon by the parties.
While the premise of a prenuptial agreement is to define or limit a spouse’s right upon death or divorce, it is noteworthy that a spouse may voluntarily make additional bequests to the surviving spouse in his or her estate planning documents which are more generous than what the surviving spouse is to receive under the terms of the prenuptial agreement.
One of the most important things to remember with respect to prenuptial and postnuptial agreements is that your estate plan be executed or revised after the execution of the prenuptial or postnuptial agreement and specifically mention such agreement in that updated estate plan. Failure to do this can result in disastrous and unintended consequences.
Counsel should always review any operative prenuptial agreements when drafting or reviewing estate planning documents.
To speak with Giannina Smith and the estate planning attorneys at Comiter, Singer, Baseman & Braun to discuss the interplay between a prenuptial agreement and your estate plan please call us at 561-626-2101 or toll-free at 800-226-1484. We work with clients throughout the state of Florida.