To many people marriage is the final step of an emotional relationship, but marriage is also a significant financial event in your life. Your savings, possessions and life's work will now be tied in to somebody else.
Statistics show that almost 50% of first marriages will fail, and although no one wants to be the one to bring up the word "prenup", a prenuptial agreement can help ease the division of property after a divorce.
(To find out how marital property is divided in an Arizona divorce without a prenuptial agreement, see Divorce in Arizona: Dividing Property).
What is a Prenuptial Agreement?
In Arizona a prenuptial agreement (also referred to as a premarital agreement) is defined as, "an agreement between prospective spouses that is made in contemplation of marriage and that is effective on marriage.”
A prenuptial agreement can protect you down the line if you and your new spouse part ways in the future. Arizona is one of nine states classified as a "community property state". What this means is that if you have a divorce, all property acquired after marriage will be split evenly during the divorce process. Failing to make a prenuptial agreement will result in the courts having power over your estate.
Who Should Have a Prenup?
Prenuptial agreements may not be for everyone. If one of the following situations applies to you, you may be a good candidate for a prenuptial agreement:
- When one spouse is substantially wealthier than the other
- One of you owns a business
- One of you is about to fall in to a lucrative career- medicine etc.
- You have the potential to earn a large amount in the future (stocks or inheritance)
- If you have previous children or elderly grandparents that must be taken care of
In order for a prenuptial agreement to be valid it must be a formal document, signed in front of a notary or attorney. Keep in mind that the prenuptial agreement must be fair to each party, and has to be entered in to willingly. Many judges will dismiss prenuptial agreements that blatantly set one spouse at a disadvantage.
How Long Do These Agreements Last?
Generally speaking, prenuptial agreements are permanent, but feelings do change, and you may reach a point in your marriage where you no longer feel a prenuptial agreement is necessary. If you or your spouse decide that you no longer wish to have a prenuptial agreement, a signed document with you and your spouse's written agreement will revoke the terms of the prenup. You can also add a "sunset clause" to your prenuptial agreement that sets a specified time in which the document expires. This can be any length of time, from 2-30 years if you'd like.
If you are already married and wish you had considered filing a prenuptial agreement, a postnuptial agreement can offer you the same sense of financial security. Talk to a family law attorney to learn more about these important agreements.