Kaine Fisher, Chairman of Rose Law Group Family Law Department, discusses protecting your premarital interests with a prenuptial agreement
Arizona is only one of nine community property states in the country although many people contemplating marriage here don’t understand how that may impact their financial future. It’s a fairly straightforward concept if you boil it down. “Community property” is a legal term of art that refers to property or debt acquired during marriage. This term does not include property and debt obtained during the marriage by gift, devise or descent before, during or after the marriage. But it might include sole and separate property which has been commingled or its character transmuted. For the most part, community property is divided equally in the event of divorce. For some people, this may seem fair and equitable, but for others, this result is not acceptable. Primarily, it is this reason people choose to enter into prenuptial or antenuptial agreements.
Historically, as far back as 1926, Arizona courts oddly did not recognize prenuptial and antenuptial agreement because of public policy reasons. Some 64 years later, the courts ultimately reversed their position, thus opening the gates for a wave of prenuptial planning. Then, in 1991, the state legislature went one step further and actually formally recognized such agreements and even codified provisions directed at establishing a framework to govern the creation, form and function of such agreements.
Whether a prenuptial or antenuptial agreement is something you should consider can depend on a variety of life circumstances and financial factors. Typical predicates include situations when you are substantially wealthier than your future spouse, have trust concerns about your future spouse, own a business, are about to pursue a lucrative career, have future inheritance prospects, have significant sole and separate liabilities, or have children from a previous marriage. In these and other situations, a prenuptial or antenuptial agreement can be an effective tool to save you stress and money in the unfortunate event of a future divorce.
It is very important to hire a competent attorney to draft (or at least review) your agreement as the document must precisely comport with applicable law. Any deviation can make your agreement susceptible to a challenge to invalidate part or even all of the agreement by your spouse. First, the document needs to be signed, and notarized, by both parties, as with other contracts that have such important parameters. Any evidence of coercion to have the other spouse sign the document can cancel the agreement so it will also need to be deemed fair. An unconscionable agreement could also quickly be voided by a court if one spouse is unfairly disadvantaged. Another reason it is so important to have a qualified family law attorney draft the prenuptial agreement is that many people don’t know that there are limitations as to what the agreement can include. The scope of these types of agreement are addressed by statute and prohibits certain areas from being addressed in the agreement. You will also want to be sure to disclose the nature and estimated value of each of your assets and liabilities as this too may make your agreement prone to attack.
Often the process of drafting a prenuptial or antenuptial agreement can take time, involve complex asset valuations, and require negotiations with your future spouse. Obviously, you will want your agreement to hold water if you are faced with divorce. So don’t underestimate the importance of having a skilled attorney by your side during this process.
To further discuss, you can contact Kaine Fisher at 480-240-5649 or kfisher@roselawgroup.com
