Don’t Forget to Define Separate Property in Your Prenup
Many prenuptial agreements contemplate that one spouse will receive alimony, and it is difficult to imagine a prenup that does not establish an intention to delineate between separate and marital property. However, a failure to define terms can result in confusion. The recent Tennessee Court of Appeals case Seifert v. Seifert presented just such a situation.
In Seifert, the parties’ prenup established that all property received by either spouse during the marriage would be separate unless it was otherwise titled. However, since property was an undefined term, the parties disagreed as to whether this included income and retirement accounts. The Court, looking to the plain meaning, determined that it did.
Seifert is also noteworthy because the Court also disregarded a portion of the parties’ written agreement with respect to the determination of alimony. The prenup provided that “separate property […] shall be eliminated from consideration by the courts of this or any other state or jurisdiction in the event of any divorce or other matrimonial action between the parties in the future.” The Court of Appeals noted that the prenup specifically contemplated that a party might be awarded alimony by a court and the law of the state requires that an alimony award be made by giving consideration to factors like the amount of separate property. Accordingly, the provision purporting to restrict the court’s ability to apply Tennessee law was disregarded.