November 20, 2009
/24-7PressRelease/ --
When Marriage Strikes Out: Florida Pre- and Postnuptial Agreements
Article provided by The Lasky Law Firm
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www.laskylawfirm.com
One of the biggest stories this fall in the baseball world is the divorce battle between Frank McCourt, the owner of the Los Angeles Dodgers, and his wife, Jamie. Until recently, Jamie was the team's CEO and, if her argument is successful, she may be found to be the team's co-owner.
In 2004, two months after the McCourts purchased the Dodgers, they entered into a postnuptial agreement that purports to grant Frank sole ownership of the team. According to Frank McCourt, the purpose of the agreement was to protect the couple's assets and to avoid California's community property laws, which dictate that marital assets are evenly split in the event of a divorce. The fate of the team and the couple's nearly $1.4 billion in assets now rests on the interpretation of an agreement that Jamie signed without consulting an attorney.
Game On
It may not be romantic, but it is true: nearly half of all first marriages and over seventy percent of all second marriages in the United States end in divorce. In light of these odds, it makes sense to plan ahead with an attorney, both for couples considering marriage or remarriage, and those who have been married for many years.
Protective Paperwork
A prenuptial agreement is a contract created before marriage that defines each person's rights and obligations with respect to issues such as alimony and property division in the event of a divorce. A postnuptial agreement operates in the same manner, but is created during the marriage. In some cases, a postnuptial agreement may modify a prenuptial agreement because of an increase in income or assets for one spouse.
Divorce and Property Distribution in Florida
Every state has different laws regarding divorce, and different rules for defining and dividing marital assets. For example, New York is a "fault" state, where a party seeking a divorce must prove the marriage is broken by cause, which may include, for example, abandonment or adultery. By contrast, Florida is a "no fault" state. A party must only prove residency and declare the marriage to be irretrievably broken.
Florida is also an "equitable distribution" state, which means that the marital assets and debts are divided equitably between spouses by the divorce court. Under Florida law, a marital asset is generally defined as anything acquired or earned by the spouses during the course of their marriage so long as those assets were earned or obtained from marital sources such as income, or marital effort. This can include, for example, businesses and real property, regardless of whose name is on the title. In addition, either party may earn an equitable interest in the other party's non-marital property by enhancing the value of that non-marital property. Lastly, either party can gift a non-marital asset to the other, converting that asset to a marital asset, subject to equitable distribution. If Frank and Jamie McCourt had brought the Dodgers to Florida, the dispute could be easily resolved if the Dodgers were declared a marital asset. On the other hand, it would be much more complex if the Court awarded the Dodgers to Frank and then had to calculate Jamie's equitable interest due to the enhancement in value of the Dodger's due to Jamie's efforts.
Cover Your Bases
Ideally, when properly drafted, pre- and postnuptial agreements help parties plan ahead and prevent the expense of litigation. As the McCourts are discovering, whether a particular agreement is valid, either because of language or circumstances, may depend on complex legal questions. It may also depend on when the agreement was executed, who drafted the agreement, and whether one or both parties had the opportunity to retain an attorney to review the agreement. In sum, it makes sense to consult with an attorney who is experienced in the areas of marital contracts and dissolution of marriage laws for advice on how to clearly define the rights and obligations of each party and how to best protect the interests of their client.
Article provided by The Lasky Law Firm
Visit us at
www.laskylawfirm.com---
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