Spouses Need to Exercise Care in Transferring Property between Them When Subject to a Marital Agreement [Florida]

Many prenuptial and postnuptial agreements provide for a class of property known as Separate Property. Such Separate Property will often not be subject to claim by or transfer to the non-owning spouse upon death or divorce. When Separate Property is provided for in the agreement, the participants need to exercise care in transferring property between and among them to avoid unintended consequences.

This was illustrated in a recent case when a Separate Property provision was included in a prenuptial agreement. The agreement also contained a paragraph that provided if a party acquires real property in his or her own name it shall be that party's Separate Property.

What occurred is that the husband transferred funds from his own separate account to a separate account of his wife. The wife then acquired real property in her name with those funds. Eight months later, she transferred the property by quitclaim deed to the husband, where it remained until divorce.

The trial court found the property to be the Separate Property of the wife at the time of divorce, and thus belonged to her. This was based on the above-described provision that if a party acquires real property in her own name it shall be her Separate Property.

The appellate court reversed the trial court and found the property to be the Separate Property of the husband. It determined that when the property was first acquired, it was the wife's Separate Property because it was in her name. However, since the agreement also allowed a party to gift away his or her Separate Property, when she quit claimed that property to her husband it was then titled in his name and became his Separate Property.

The fact pattern here is pretty specific. However, there is a general lesson here. Transfers of property between and among spouses can have unintended consequences when there is a marital agreement in place. If some type of erroneous transfer occurs, and the parties seek to correct it, they should consider an amendment to the agreement so as to clarify the treatment of the correction. Further, such transfers may invoke difficult contractual interpretations, as evidenced by this case with the trial court and the appellate court reach different conclusions, again suggesting care in such transfers.

Colino v. Volino, 41 Fla. L. weekly D1990b (5th DCA, August 26, 2016)