Amidst the excitement of getting married, negotiating a prenuptial agreement can be sensitive. No one wants to enter into an engagement planning how they might handle a divorce from the person they love, and many find it difficult to broach the topic of a “prenup” with their partner. In reality, a prenuptial agreement, or sometimes called a “premarital agreement,” can protect both parties. A well-drafted prenuptial agreement also ensures that everyone knows what to expect going into the marriage.
At Lincoln & Wenk, the family law attorneys have extensive experience drafting and negotiating prenuptial agreements. They have also handled plenty of divorce cases involving prenups. That means we prepare your prenuptial agreement with an in-depth understanding of how courts will interpret the terms of your agreement and how your interests will be affected.
How Prenuptial Agreements Protect You
Who Needs a Prenuptial Agreement?
Any couple can benefit from the proactive planning that goes into writing a prenup. However, this type of planning might be more critical for some couples than others. Some situations in which you should seriously consider a prenuptial agreement include:
- When one person owns a business
- When one person has significantly more resources than the other
- When one or both parties have children from a prior relationship
- When one or both parties have interests in family businesses, family real estate, or other assets they want to keep in the family
- When the couple is getting married later in life, and each has their own resources and separate heirs they want to provide for
- When one party is expecting a significant inheritance
If you’re uncertain about whether a prenuptial agreement would be useful in your situation, consult a local family law attorney. An attorney experienced with preparing these prenuptial agreements can advise you how a prenup may be beneficial in your situation. Your attorney can also help ensure that you’ve considered all possible issues you may want to address in your premarital agreement.
What’s in a Prenuptial Agreement?
A prenuptial agreement is a contract between two people who plan to marry. The exact contents will depend on their situations in life, their goals, and other financial factors. However, there are some common elements in prenuptial agreements, and some topics that are off limits.
Arizona is a community property state. That means that generally, all property one party or the other brings into the marriage remains their separate property. A few types of property acquired during the marriage are also classified as separate property, such as gifts one spouse receives from someone outside the marriage and inheritances. Any income from or increase in value of property brought into the marriage is also separate property.
But, sometimes determining what is and is not separate property can be complicated, especially after a long marriage. For instance, if one person owns a home before the marriage and that home doubles in value during the marriage, it remains separate property of the original owner. But, if there was a mortgage on the property that was paid in part out of community funds, or if the property was improved using marital funds, then some portion of the value may be community property subject to division.
A prenuptial agreement can simplify this type of issue by specifying in advance how property will be classified. In Arizona, the couple has the option of agreeing to treat the income of each party as separate property, though by default it would be considered community property. Similarly, the couple can agree that each is responsible only for their own debts.
A prenuptial agreement can be used to resolve how each party’s business interests will be classified and treated, how household expenses will be paid, how retirement accounts will be treated in a divorce, whether either spouse will be entitled to spousal maintenance and even how that amount will be determined at the time of divorce.
One thing prenups can’t do is try to sort out issues like child custody and child support. The parties can’t agree on these issues in advance for two reasons. First, the right to child support and direct care from a parent belongs to the child, not to either parent. So, neither parent has the authority to waive or limit those rights. For the same reason, only the family court judge can determine custody and child support issues. And, that determination is made in the best interests of the child or children.
Validity of Prenuptial Agreements in Arizona
ARS 25-202 explicitly provides for premarital agreements in Arizona. However, the statute lays out a list of requirements for a prenuptial agreement to be valid and enforceable. The agreement must be in writing and signed by both parties. In addition, an Arizona prenup is not enforceable against a party if:
- The party was somehow coerced into signing the document
- The agreement was unconscionable when executed (signed), meaning it would be unfair to enforce its terms
- The party was not provided with a reasonable disclosure of the other’s assets and financial obligations, didn’t waive the right to such disclosure, and didn’t have (or reasonably couldn’t have had) adequate knowledge of the other’s property and obligations
Though a prenuptial agreement is signed prior to the marriage, it does not become effective until the parties marry. If a premarital agreement is valid under the terms of the statute, it will generally be honored by an Arizona divorce court. However, if limitations on spousal support in the prenuptial agreement would leave one spouse so impoverished that they would be eligible for public benefits, the court may order support sufficient to remedy that situation.
Talk to an Arizona Prenuptial Agreement Attorney
Once you’ve entered into a binding prenuptial agreement, you likely cannot change the terms unless your spouse agrees to modify it. So, it’s very important to make sure you thoroughly understand the ramifications of any prenuptial agreement you sign, and that you try to be as objective as possible when considering possible outcomes.
To learn more about how Lincoln & Wenk can help, call 623-294-2464 or fill out the contact form on this site.