Prenup trumps state law in Florida Supreme Court ruling
September 12, 2015 2 comments
A voluntarily-executed prenuptial agreement that is clear and unambiguous should stand even if it puts one spouse at a disadvantage and disagrees with state laws, the Florida Supreme Court has ruled.
Justice Ricky Polston ruled on the case of Dianne Hahamovitch and her ex-husband Harry. The Boca Raton couple married in 1986 when they were 28 and 46 respectively. They were married for 22 years before filing for divorce in 2008. Both signed a prenup that said each would have no right to claim on property held in the other’s sole name, even if it was bought during their marriage, or it went up in value while they were married. The prenup also stated that property bought in both their names would be split 50/50 if the marriage failed. Mr Hahamovitch is a property investor.
Lower state courts, including the Fourth District Court of Appeal, had previously upheld the terms of the prenup. However, the Florida Supreme Court agreed to hear the case because similar prenups had been ruled against in other appeal courts. Those rulings said that prenups couldn’t overturn a spouse’s claim to their partners “earnings, assets acquired with those earnings and the enhanced value of the other spouse’s non-marital property resulting from marital labor or funds.”
Mrs Hahamovitch argued that the prenup made no specific reference to the “enhancement in value of non-marital property” so that value should be subject to equal distribution. She also argued that the agreement didn’t have specific reference to the husband’s earnings as separate property, so they shouldn’t be considered protected assets. The Supreme Court judge disagreed saying that the “broad language of the [prenup] includes a waiver and release of all rights to the other spouse’s non-marital property.”
In upholding the Fourth District Court of Appeal ruling, Justice Polston wrote:
“Where a contract is clear and unambiguous, it must be enforced pursuant to its plain language.”
The judge ruled that the couple both had lawyers working for them when the agreement was drawn up. The agreement went through a number of drafts and Mrs Hahamovitch had many chances to express concern with the terms of the agreement if she had been unhappy.
Under the terms of the prenup, Mrs Hahamovitch will receive $1.9 million over seven years. Mr Hahamovitch’s attorney, Joel Weissman, acknowledged that she would have received more if the Florida Supreme Court had upheld the decisions of other appellate courts that required greater detail before they would let a prenup trump the laws of the state.
Weissman said the ruling would “clear up roughly 20 years of confusion and that would ultimately benefit couples who craft prenuptial agreements.”
Read the judgment here.
Photo by Adam Tinworth via Flickr
September 12, 2015
Categories: Prenuptial Agreements