Florida Supreme Court Decides Prenuptial Agreement Blocks Wife’s Claim to Increase in Value of Non-marital Assets

An important new Florida Supreme Court decision helps clarify the applicability of waivers in prenuptial agreements. The court concluded that, if a prenuptial agreement’s terms made it clear that a spouse was waiving and releasing all rights and claims to the other spouse’s separate property, that waiver included the increase in value of those non-marital assets, even if the agreement did not expressly cover increased value, and the increase was due to marital efforts or funds.

The case brought to a conclusion the divorce dispute between H.H. (husband), a mortgage broker, and his wife, D.H. The couple married in February 1986 and remained married for 22 years. The month before their marriage, both spouses signed a prenuptial agreement. The agreement stated that, if the spouses purchased a property in both their names, the asset was presumed to be owned 50-50 between them, but if the husband purchased an asset in his own name, even during the marriage, that asset was his separate property.

The wife, at the time of the couple’s divorce, argued that, since the prenuptial agreement did not explicitly cover the increase in value of separate assets, she should be entitled to the appreciated worth of non-marital assets if that increased value could be traced to marital efforts or funds.

A decade ago, in Valdes v. Valdes, a case originating in Miami, the 3d DCA had ruled that, if the prenuptial agreement is silent on the matter, increases in value of a non-marital asset are subject to equitable distribution if marital assets or efforts were used to contribute to that increase. The 4th DCA reached the opposite conclusion in this case decision last year, concluding that the totality of the language in the prenuptial agreement was broad enough to encompass increased values of non-marital properties.

The Supreme Court agreed with the 4th DCA. In thiscase, the prenuptial agreement was valid, so it simply came down to construing the wording in the document. The agreement contained language that established a waiver and release with regard to “all rights and claims to the other spouse’s non-marital property.” This waiver and release verbiage was sufficient to include increases in value of non-marital assets. Allowing the other spouse to seek equitable distribution of increases in value of a spouse’s non-marital assets, even when the couple has a prenuptial agreement as broad as the couple had, simply because the prenuptial agreement fails to expressly include such increases in value runs contrary to the agreement’s actual language “that expressly waives all of the other spouse’s rights and claims in such property,” according to the court’s decision.

One of the attorneys who unsuccessfully represented the husband in the Valdes case told the Daily Business Review that many in the legal community applauded the court’s decision because it “made it a lot simpler to apply the principles of waiver.”

For answers to your questions about prenuptial agreements and equitable distribution, talk to the South Florida family law attorneys at Sandy T. Fox, P.A. Our experienced attorneys have the up-to-date knowledge and extensive experience necessary to provide you with the representation you need.

More blog posts:

Domestic Violence in Florida, Fort Lauderdale Divorce Lawyer Blog, June 20, 2013
Important Updates to Florida’s Alimony/Child Custody Legislation, Fort Lauderdale Divorce Lawyer Blog, May 8, 2013