If you are someone with high-value assets, a prenuptial agreement can be a vital part of your premarital planning. A well-drafted prenuptial agreement can offer a strong degree of protection in the possibility of a future divorce. In the case of one Florida man, his prenuptial agreement offered protection not when he divorced but when he died. In a recent ruling, the Second District Court of Appeal decided that the man and his wife’s prenuptial agreement prevented her from getting an additional half-million dollar payment from the man’s estate.
The case centered on the 2009 prenuptial agreement signed by Natalia and Andrew Shaw. Prenuptial agreements can provide certain protections to each spouse, especially in situations in which the spouses enter the marriage with high-value collections of assets. In the Shaws’ situation, they agreed that the wife would, upon the occasion of the husband’s death, receive the sum of one-half million dollars, as long as neither of them had filed for divorce prior to the man’s death.
In 2012, the husband died. When he did, the wife received $480,000 as the named beneficiary of the man’s IRA. She also got $108,000 from her share of a life estate in the man’s primary residence, as well as gifts the husband had given her, which had a value of more than $103,000. After receiving these things, the wife filed a claim demanding a $500,000 payment from the man’s estate. The estate denied the claim, and the wife sued for breach of contract, based upon the alleged violation of the terms of the prenuptial agreement. The wife claimed that the prenuptial agreement called for her to get the $500,000 in addition to the IRA proceeds, the life estate, and the gifts.
The appeal did not succeed. The reason it failed was due to the wording included in the prenuptial agreement. Had that document limited the parameters of “estate” to the husband’s probate estate alone, the wife might have succeeded, since assets like the $480,000 death benefit from the IRA would not have been a part of the man’s probate estate. However, the prenuptial agreement expressly stated that “estate” included the probate estate, along with any living trusts, life insurance, individual retirement accounts, deferred compensation plans, and other assets with transfer-on-death designations.
Given that broad definition of “estate,” the court determined that the personal representative was correct that the wife had already received the half-million dollars from the husband’s estate that the prenuptial agreement promised her. The $480,000 she received from his IRA and the $103,000 in testamentary gifts both counted as distributions from the “estate.” As this total, $583,000, exceeded the $500,000 amount stated in the agreement, the distribution obligation term contained in the prenuptial agreement was satisfied, and the wife was not entitled to any additional distribution.
If you are facing a high net worth divorce, the terms of the prenuptial agreement (if you have one) may go a long way in guiding the outcome of your case. The experienced Florida high-asset divorce attorneys at Stok Folk + Kon are here to help you. Our hardworking and knowledgeable attorneys have many years of experience and can help you pursue a strategy that will best protect your long-term financial situation.
Contact us online or by calling (954) 237-1777 to schedule your consultation.
More blog posts:
New Florida Supreme Court Decision Offers Beneficial Information for High-Asset Individuals Contemplating Prenuptial Agreements, Florida Business Lawyers Blog, Jan. 14, 2016
South Florida Wife Loses Claim Based Upon Increased Value of Husband’s Auto Dealership, Florida Business Lawyers Blog, Dec. 18, 2015