What is a Postnuptial Agreement?
A postnuptial agreement is a legally binding contract executed by a couple after they have married. Much like a prenuptial agreement, both parties disclose assets and debts in order to reach a common understanding of how they will be distributed in the event of a divorce or death. While prenuptial agreements are executed prior to marriage, postnuptial agreements are signed after the marriage has commenced.
Florida statutes govern the content of postnuptial agreements, which may be used to address any issues relating to asset distribution, debt distribution, spousal maintenance, and even child custody and support in some cases. However, unlike pre- or post-nuptial agreements , the terms relating to children are not enforceable in Florida.
One circumstance under which a couple may choose to enter into a postnuptial agreement is when they acquire significant assets after their marriage that they may want to keep separate in the event of a future divorce. Another scenario where a postnuptial agreement may be used is when one party has developed a significant portion of their wealth, and they wish to leave that property to their postnuptial beneficiaries, i.e., children from a previous marriage. Other reasons include becoming more financially stable after the date of marriage, and having a change in circumstances that prompts a new financial direction.
Requirements under Florida Law
For a postnuptial agreement to be valid and enforceable in Florida, certain legal requirements must be met. As identified in Florida Statute § 61.058, three primary conditions must be satisfied:
The Requirement of a Written Document and Signature
Any postnuptial agreement must be contained in a written document and signed by both parties involved. In addition to this fundamental prerequisite, a divorce court may also require that the agreement is notarized, such as requiring the agreement to be acknowledged in the presence of two witnesses.
The Requirement of Full Disclosure
Prior to signing a postnuptial agreement, both parties must disclose any and all assets and liabilities they possess. This is an extremely important requirement, which is why it has been labeled the necessity for "full disclosure." Essentially, the parties are required to fully divulge to one another their own assets and liabilities, and are each obligated to fairly value those assets and liabilities. A party should never deliberately hide assets or wealth, or intentionally fail to fully disclose. The best practice, in this scenario, is to assume the full disclosure requirement means complete disclosure.
If one of the parties is hesitant to disclose, and the other feels uncomfortable or obligated to proceed, then it may be wise to seek out independent counsel, and explore the need for a request for production in accordance with Florida Statutes § § 61.076 and 61.075.
The Requirement of Workable Terms
Lastly, the terms in the postnuptial agreement must be workable so as not to be unconscionable. The term "unconscionable" is defined as an agreement or stipulation that is so unfair to one party that it shocks the conscious of the court or community at large. An agreement that includes unreasonably disproportionate provisions, is often perceived as unconscionable in Florida.
Although Florida case law supports the freedom to contract, and respects the sanctity of marriage, the law also recognizes that it will subject such agreements to judicial scrutiny for fairness, and unconscionability. Essentially, courts want to ensure that any agreement made by the parties is strong enough to sustain its impact, without stripping away the other party’s rights and entitlement to the law, or to the core elements of a marriage.
Factors Affecting Cost
The final cost of drafting a postnuptial agreement in Florida may vary considerably, contingent on several factors. Attorneys will generally charge fees according to the complexities and the particulars involved in creating an agreement. A more straightforward postnuptial contract could cost anywhere from $1,200 to $2,500, while a sophisticated one may run $5,000 or more. When simple terms require much negotiation, accompanied with revisions or when a postnuptial agreement involving a business is at stake, corresponding attorney fees could skyrocket to $10,000 or higher.
For many individuals, the complexity of the agreement may not be as critical as the other factors that come into play when drafting a postnuptial agreement. An agreement that is affordable at first can end up being costlier than anticipated. Window shopping for agreement templates from numerous sources online can turn out to be expensive when you are left trying to vet the agreements drafted by yourself or others. An otherwise affordable agreement can quickly become costly when terms are not clearly outlined or when one or both spouses fail to fully disclose their finances. When spouses do not use an attorney, the agreement may not hold up in a court of law later on, which could start the expense process all over again. One way to help spouses share the costs is by referring to attorneys specializing in the drafting of postnuptial agreements and seeking bids from several.
Common Price Range
The cost of a postnuptial agreement in Florida can vary depending on the complexity of the terms to be addressed. While simple agreements that define general financial rights and obligations may start at around $1,500 to $2,500 each, more complex agreements addressing detailed provisions regarding support, the disposition of property, debt allocation, alimony, or child custody issues can exceed $5,000 in some cases. Ensure you understand the process engaged in with the attorney involved, including the time expended and how the attorney fees are structured. Many lawyers handle postnuptial agreements on a flat fee basis. However, those representing high net worth individuals or representing both spouses may charge one or more hours at their standard hourly rate to discuss the matter with the client and to draft the agreement.
Choosing a Lawyer
Once you have made the decision to pursue an agreement, then the next step is to find a qualified Florida family law attorney familiar with the process. Many attorneys, especially those focused on marital and family law in Florida, are also familiar with postnuptial agreements, so locating a practitioner with experience handling these documents should not be an insurmountable challenge . Beyond retaining a Florida family law attorney, it is also important to be certain that he or she has experience specifically with postnuptial agreements. While these documents share many key features with traditional prenuptial agreements, they can be legally and procedurally different in some very important ways. An attorney who is already well versed in the area of family law is likely to be able to advise on the particular issue of a postnuptial agreement relatively easily.
Cost versus Value Consideration
Before getting started with a process, it is a good idea to first weigh whether the cost of the process is going to be worth it. It is no different in the family law context, which is why we will now look at the cost-benefit of the postnuptial agreement. The upfront investment of a postnuptial agreement may seem extravagant or unnecessary for some, but for those couples that see the longterm benefits, it is a sound investment. Though the costs and benefits differ from case-to-case, there are some generalizations that can be made. The costs/benefits can be divided into two categories: emotional and financial. While it is difficult to put a numerical amount to the emotional benefits, we can discuss some of what the typical benefits are. Emotional Benefits: In a sense, there is an emotional cost to not having a postnuptial agreement that is a little more difficult to measure, but is equally important. It comes down to peace of mind. Knowing exactly where you and your spouse stand adds tremendous value. Financial Benefits: If you have a postnuptial agreement, your attorneys should be able to work out a settlement if a divorce occurs, without the need for litigation. A postnuptial agreement also saves on legal fees in that it provides a level of predictability during a divorce. A postnuptial agreement gives couples the opportunity to negotiate issues while everything is still good in the marriage. It allows the couple to put pen to paper and agree on the principles behind their finances and gives them an opportunity to have a conversation about how they want to spend their retirement years. The numbers on divorce mediation paint a positive picture as well. The cost of divorce mediation is substantially lower than the upfront cost of a postnuptial agreement. In Florida, the cost of the median divorce is $13,500. The median cost of divorce mediation is $3,000. Even when the upfront cost and overall cost of a postnuptial agreement are factored in, the postnuptial agreement is overall still more cost effective than litigation.
Postnuptial Agreement Alternatives
Not every couple in Florida may find the need for a postnuptial agreement, or may want the lengthy and costly process of formulating an agreement. Thankfully, Florida allows couples other legal options if they do not wish to enter into a postnuptial agreement with their spouse.
Two such alternatives include an informal settlement agreement or an equitable distribution of assets and liabilities not otherwise addressed (described in more detail below). These alternatives are presented as options for those who may want to avoid the process of an agreement , but should not be considered a substitute for a written postnuptial agreement.
A selection of other formal alternatives to a postnuptial agreement may include:
When considering an alternative to a postnuptial agreement, it may be worthwhile to consider how the other proposed agreement will be subject to any court review and approval. Each alternative agreement that is non-postnuptial in Florida will have distinct requirements per Florida law and will often have different effects on the rights of both parties. A failure to review in detail these alternatives with your spouse and your respective counsels could minimize the benefits offered by an alternate agreement.