Connecticut couples facing divorce proceedings may be aware of the difficulties of arranging appropriate spousal and child support. Some think that having a prenuptial agreement absolves them of the need to negotiate in the future, but a recent divorce case suggests otherwise. In this particular case, a married couple made a prenuptial agreement that stated, in the event of a divorce, gifts and inheritances received individually would not be subjected to division. Similarly, growth and appreciation from individual business efforts would also not be divided.
In this divorce case, the husband started a phone company shortly after the marriage. The company became so successful that his wife was able to stop working to take care of the four children they had together. During initial divorce proceedings, the ex-husband was ordered to pay spousal support and child support. The prenuptial agreement was ruled invalid because so many circumstances had changed since the beginning of their marriage. Namely, the ex-wife had stopped working to care for the children, a turn of events that was not predicted in the making of the prenup.
The ex-husband also argued that he had no reportable income, claiming that he lived on gifts from his ex-wife’s family and from the cofounder of his phone company. The court did not find these claims credible as the ex-husband took lavish vacations, lived in an expensive home and drove a Mercedes paid for by the company. The company was found to commingle personal and business finances as well, which made it difficult for the court to determine the approximate amount of income he was receiving from the business.
This divorce is one of countless court proceedings that illustrates the potential messiness of the process. It presents the interesting caveat that prenuptial agreements are not absolute. Couples who are marrying may benefit from drawing up a prenuptial agreement that sets out many potential scenarios.
Source: Forbes, “The High-Flying Debtor Gets His Wings Clipped In Newcomer“, Jay Adkisson, December 28, 2013