In the last three blogs we covered different types of assets and things that you can do to keep your sole and separate property yours in the event of a divorce.
The cleanest and most effective way of identifying what is yours is to enter into a Prenuptial Agreement with your spouse, prior to getting married.
A Prenuptial Agreement is a contract between you and your fiancé that can spell out in great detail what you own, what your fiancé owns and what will be community property.
Because Arizona is a community property state, anything earned or acquired during the marriage is presumed to be a community asset, with very limited exceptions. With a Prenuptial Agreement you very clearly spell out what you own and what your spouse owns at the time you got married, making it much easier for the Court to identify each parties assets in a divorce proceeding.
A Prenuptial Agreement allows you to not only memorialize the assets each of you have coming into the marriage, but you can also choose to opt out of community property law by agreeing that each spouse’s respective income will be the sole and separate property of the spouse earning it, any property each of you acquire remains that spouse’s, and you can agree on the amount and duration of spousal maintenance or agree that neither party would be entitled to an award of spousal maintenance.
Unfortunately the divorce rate in this country is very high. As a result, prior to getting married, people are looking at ways to protect themselves in the event the marriage does not work out as planned. If the marriage lasts, the only thing lost is you’ve paid money for a contract that you will never use. That is a very small price to pay when you look at the cost of a divorce proceeding.
Keep in mind, even if you enter into a Prenuptial Agreement with your fiancé’ prior to getting married, you still need to be mindful of how you treat your assets during the marriage, as laid out in the prior 3 blogs. What I mean by that is even if you sign a Prenuptial Agreement that says you own two houses and have 3 financial accounts and those are yours, if during the marriage you decide to put your spouse’s name on it, it will no longer be your sole and separate property, the law will presume you made a gift to your spouse.
A couple of other things to keep in mind when contemplating a Prenuptial Agreement.
First, do it early. You do not want to be discussing a Prenuptial Agreement a week before your wedding and the closer it is to the wedding, the stronger the argument for duress or undue influence. It would be ideal to have the Prenuptial Agreement drafted and signed before you even send out “save the date” cards or wedding invitations (but that never happens). When contesting the validity of a Prenuptial Agreement, legal arguments have been made that one spouse felt pressured to sign because everyone knew about the wedding or they had already spent so much money on the wedding, etc. So, the earlier the better.
Second, each person should have their own lawyer. Each spouse is entitled to get legal advice specific to their situation. As a result, each person needs to have their own lawyer. This is not something you want to save a few dollars on. I can promise you that the DIY (do it yourself) Prenup typically does not turn out well and if you go through the trouble of signing one, you want it to be upheld.
If you would like more information about creating a Prenuptial Agreement, please call OWENS & PERKINS at 480.994.8824 to schedule your free 30-minute consultation with one of our experienced attorneys.