What is a premarital agreement?
A Premarital Agreement is a written contract created by two people planning to be married. In some states, a premarital agreement is known as an “antenuptial agreement,” or in slightly more modern terms, as a “prenuptial agreement” or “prenup.” The agreement typically lists all of the property each person owns, as well as their debts, and it specifies what each person’s property rights will be after they are married. In the event of a divorce, a Premarital Agreement often specifies how property will be divided — and whether spousal maintenance (alimony) will be paid.
Who Needs a Premarital Agreement?
Contrary to popular opinion, Premarital Agreements are not just for the rich. While Premarital Agreements are often used to protect the assets of a wealthy fiancee, couples of more modest means are increasingly turning to them for their own purposes. For example, a marrying couple with children from prior marriages may use a Premarital Agreement to spell out what will happen to their property when they die, so that they can pass on separate property to their children and still provide for each other, if necessary. Without a Premarital Agreement, a surviving spouse might have the right to claim a large portion of the other spouse’s property, leaving much less for the children who are not common to the surviving spouse.
Couples with or without children, wealthy or not, may simply want to clarify their financial rights and responsibilities during marriage. Or they may want to avoid potential arguments if they ever divorce, by specifying in advance how their property will be divided and whether or not either spouse will receive alimony. Premarital Agreements can also be used to protect spouses from each other’s debts, and they may address a multitude of other issues as well.
If You Do not Make a Premarital Agreement
If you do not make a Premarital Agreement, the laws of the State of Arizona will determine whether there was separate property owned before marriage and who owns the property that you acquire during your marriage, as well as what happens to that property at divorce or death. Property acquired during your marriage in Arizona is known as community property, and is generally divided equitably upon divorce, absent a Premarital Agreement specifying otherwise.
Making a Valid Premarital Agreement
A law called the Uniform Premarital Agreement Act, which has been adopted by Arizona, provides legal guidelines for people who wish to make agreements before marriage regarding ownership, management and control of property; property disposition on separation, divorce and death; alimony; wills; and life insurance benefits. Because courts still look carefully at Premarital Agreements, it is important that you negotiate and write up your agreement in a way that is clear, understandable, and legally sound. It is advisable that each party to the agreement have their own independent counsel.
Please consider the Family Law team at Udall Shumway PLC if you need assistance regarding premarital agreements. We would like the opportunity to offer you our experience, knowledge and guidance.