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Prenuptial agreements and hidden assets

| Apr 9, 2019 | Divorce |

Whether considering a first, second or even a third marriage, prospective marital partners may want to make an estate plan that includes a prenuptial (premarital) agreement stating how to divide assets if they divorce. A premarital agreement is a legal contract. As such, the law protects the rights of both people who make the agreement.

When partners dissolve their marriage without having made a prenuptial agreement, Florida law applies equitable distribution to the couple’s assets. The court does not split the property straight down the middle as it would in a community property state; instead, Florida’s equitable distribution law will govern fair—but not necessarily equal—division of the partners’ assets. Equitable distribution does not mean equal distribution.

How are assets treated during a Florida divorce?

Under equitable distribution, a divorce court allocates assets as fairly as possible according to many complex factors covered by Chapter 61 of the 2018 Florida Statutes. This is one reason people considering marriage prefer to formalize how they wish to divide their assets should they divorce, or else the court will make the decision for them.

What happens if a person is deceptive about their assets?

If one prospective marital partner suspects the other partner may hide assets to avoid sharing them in the event of a divorce, the person may watch for possible signs of hidden assets, such as when a partner:

  • Claims to earn a moderate salary but drives an expensive car
  • Spends money lavishly and impulsively on discretionary items
  • Does not want to discuss assets
  • Has an excellent credit score despite spendthrift habits
  • Routinely makes large ATM cash withdrawals
  • Denies he owns a business, but his office receptionist says he is the owner

If signs are present—and unless spousal surveillance is court-ordered during a divorce proceeding to discover missing assets–a prospective marital partner who undertakes aggressive surveillance activity, either before or after marriage, can be guilty of breaking the law. Spying on another person can potentially result in charges of unlawful stalking and invasion of privacy.

How to avoid a fraudulent or dishonest prenuptial agreement

The most important protection is for partners to use an experienced estate planner to set up their premarital agreement. There is no need to source an expensive practitioner in a large city. Smaller areas have perfectly qualified estate planners.

Partners should each read the final draft of the agreement, and they should make sure the document contains both their names in full with correct spelling. The couple should verify that the terms of the agreement accord with their desires. Both members of the couple must sign the final prenuptial agreement to make it valid.

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