Some Columbus couples create prenuptial agreements to protect individual assets in case a marriage doesn’t work out. Before any financial agreement is solidified, the parties should understand the differences between separate and marital assets, according to Ohio laws, and know what makes a prenuptial contract valid.
A couple with a prenuptial agreement included a provision within the contract that kept the business assets of the individuals separate. During the marriage, the husband and a business partner launched a successful phone company. The wife left the paid workforce to stay home with the couple’s four children.
A year after the business was established, the couple divorced. When the ex-husband refused to live up to orders to pay $4,500 per month in child and spousal support, the ex-wife went to court.
The phone company president claimed he owned no stake in the business he helped start, although the position he held gave him access to company money. Millions of dollars from the business were funneled through the former husband’s personal bank accounts.
Business money and loans allowed the man to afford an affluent lifestyle, yet he purported to have no income except for funds from his former in-laws that kept the divorcing couple’s mortgage payments up-to-date. The man also told the court he had been “fired” by his partner.
A court awarded the ex-wife the marital home and ordered the husband to pay back support of over $146,000. The former spouses appealed, with the ex-husband asserting that the prenuptial agreement insulated him from paying support. The court didn’t buy it.
The appellate court agreed that the original prenuptial contract, signed before the couple’s 1992 wedding, was invalid due to unanticipated changes within the marriage. The “voluntarily” jobless husband’s imputed income, the money the man was or should have been earning, was assessed at $150,000 per year.
Prenuptial agreements can be invalidated, when parties fail to make full financial disclosures. While there were other issues in this case, one thing to remember is that a prenuptial agreement is not infallible. There are several instances when a prenuptial agreement could be ruled invalid. This is why it is so important to seek legal advice before entering into such an agreement.
Source: Forbes, “The High-Flying Debtor Gets His Wings Clipped In Newcomer” Jay Adkisson, Dec. 28, 2013