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PRENUPTIAL – PREMARITAL AGREEMENTS – ARE THEY ENFORCEABLE?

Every couple expects, when they marry, that their marriage will last forever.  Unfortunately, however, the statistics indicate that at least half of these couples are wrong.

A prenuptial agreement can provide financial stability as well as reduce certain conflicts that may arise in the event the marriage is subsequently dissolved.  Typically, they address the division of assets and treatment of future earnings and are most often designed to protect the spouse with greater premarital assets and earnings from losing an unfair part of that wealth in the event the marriage is subsequently dissolved.

Until fairly recently, such contracts were considered difficult to set aside.  More and more courts, however, are recognizing grounds for invalidity.  Needless to say, a poorly-drafted prenup can be a source of lengthy and costly litigation.

Although not an exhaustive list, the following are some of the most common mistakes couples make that can weaken or completely invalidate a prenuptial agreement:

 

  1. No Independent Legal Representation. Each party should have their own attorney prior to executing their premarital agreement to ensure that both sides comprehend and voluntarily agree to its terms.
  2. Not Properly Executed: The prenup must be in writing, signed prior to the wedding, and witnessed by a notary public. Perhaps one of the most infamous prenup fails was between Steven Spielberg and Amy Irving; they wrote their prenup on a napkin and neither signature was notarized.  Ultimately, this little blunder cost Spielberg $100 million!
  3. Involuntariness: If one party is pressured into executing the agreement (duress) or lacked mental capacity (such as being under the influence), the contract will likely be invalidated.
  4. False or Incomplete Information: The agreement is valid only if entered into after full and accurate disclosure by both parties. If one party fraudulently misrepresented a material fact and the other party relied on that information in signing, the agreement will likely be thrown out.
  5. Provisions Against Public Policy: Although divorce judges may not routinely scrutinize atypical provisions, there can be exceptions such as clauses relating to weight gain, sexual relations, or the like.
  6. Too Soon Before Wedding: If executed too soon before the wedding, a spouse may be able to argue that he/she was coerced into signing for fear of cancellation of the wedding.
  7. Unconscionable: Where the court determines that the agreement is so one-sided as to be “shocking to the conscience” it will be thrown out.
  8. Ambiguous: Just as with any contract, if the verbiage is unclear or otherwise subject to interpretation, it may be successfully challenged.

In sum, if you are contemplating executing a prenuptial agreement or are going through a divorce and believe that your agreement may be invalid, you should contact an experienced matrimonial attorney.

 

Divorce and Social Media

The rise of the internet, wireless networks, and smartphones have given way to a hyper-connected world where events – large or small- can spread worldwide in a matter of seconds. This unprecedented access to information sharing- particularly on social media- has made our personal lives public. Under such circumstances, personal matters such as divorce can also fall under public scrutiny.

As such, I strongly urge you to practice a measure of restraint on social media during the divorce process.

What To Do

Opting out of social media might feel odd in this day and age, but it is the safest way to progress through your case. If you do feel the urge to post something, consider it over carefully from every possible angle as an observer. Would it be easy to twist your words to work against you? When in doubt, simply do not hit the “enter” tab!

Never post details of your case online, ever. Even private messages are not a safe place for such sensitive subject matter inasmuch as they can still be hacked and used to damage your case. When you do need to talk about your case, your spouse, the ways in which you are being wronged- discuss it in person. Similarly, criticizing the judge, the system, or your ex’s lawyer will only damage your character, and could very well have grave consequences for your case.

Navigating these and the very many other details of your divorce proceeding are certainly difficult.  Contact my office to schedule a no-obligation consultation to explore the path to streamlining your divorce today.

 

ALIMONY: IMPACT OF THE NEW TAX LAWS

For the past 75 years, one rule has been clear: the spouse paying alimony can deduct it from taxable income and the spouse receiving the money must include it as income. However, with the advent of the new Tax Cuts and Jobs Act (“TCJA”) signed by President Trump during December, 2017, all of that changes for people signing divorce agreements after December 31, 2018.

For those required to pay alimony (a.k.a “spousal support” or “spousal maintenance”), the tax impact could be significant and, as such, will likely affect the way divorcing couples arrive at a settlement including the timing of the settlement itself.

To give you an idea as to how far-reaching this tax change is, the Census Bureau states that 243,000 people received alimony last year – 98% of them women. The IRS says 361,000 taxpayers claimed paying $9.6 billion in alimony in 2015. Although these figures are inconsistent- you get the point. In fact, this new measure is expected to generate $6.9 billion in new tax revenue over a ten year period.

The bottom line is: if you are either contemplating divorce or in the midst of divorce proceedings and want deductible alimony treatment of your payments, the TCJA provides a big incentive to get your divorce settlement finalized by December 31, 2018. If, on the other hand, you will be the recipient of payments, you have incentive to put off finalizing your agreement until next year, as the payments would be tax-free to you.