When most couples enter marriage, the idea of spousal support, child custody and the allocation of assets are usually the last things on their mind. Unfortunately, the best laid plans don’t end up being lived out in happily ever afters. In fact, statistics show that nearly half of all marriages ending up in divorce.
Just as you would have an insurance policy to protect you from unexpected life events, or an operating agreement with business partners, prenuptial agreements, or prenups, fall into the same scope.
At its core, a prenup serves as a snapshot that outlines the basic financial rights and obligations of each of the two parties, including custody and child support issues of minor or dependent children. Additionally, it also tackles the not-so-pleasant distribution of assets and property in the case of divorce, but also death, which is not a commonly known fact.
Why Would You Need A Prenup?
Prenuptial agreements are essential in helping define the parameters and payments of spousal support, should the marriage end in divorce. Details surrounding the amount to be paid, duration of payments and any special circumstances, should all be discussed and agreed upon prior to the wedding date.
In addition to protecting spouses from one another, and other family members, prenups can also be crafted to protect spouses from each other’s debts. Similarly, a prenup can add an added layer of protection to a spouse’s property through their Estate Plan, ensuring that various assets can be passed on to children from an earlier marriage and not be fought over during divorce or probate proceedings.
It’s important to note that each state has its own laws and nuances pertaining to both the validity and enforcement of prenuptial agreements. These laws can take into consideration; which state the marriage took place, where the spouses lived over the duration of the marriage, and where each spouse currently lives. Not surprisingly, spouses will often select the state that is most beneficial in executing the terms of the prenup.
So, who needs one?
The simplest answer is… anyone who has important assets they want to keep should the marriage end in divorce. From artwork and family heirlooms to earnings and retirement funds, a prenuptial agreement defines to whom certain assets belong, working to protect a family legacy from death or divorce. These assets can be specifically identified as belonging to one spouse, belonging to a certain family member, or requested to be kept within a certain family dynamic, given to charity or a church, etc.
Prenups are also particularly essential for business owners who want to protect their organization during a divorce, as it can specifically prevent a spouse from pursuing the organization or claiming a community lien on the business.
When to Plan?
Proper planning for the future of your union should begin as soon as you start considering a life-long commitment. Avoid putting off the discussion of a prenup until you are in the middle of wedding planning, when wedding activities may have you distracted.
Despite the general unpleasantness of the thought, couples who go through prenuptial planning end up on more solid ground in their marriage. With money and finances a constant and changing dynamic in any relationship, they’re also a basis for ongoing conflict. Forcing a couple to honestly think through the details of their finances – from how they handle money and assets they may have, to their outlook on what is most important – provides an intrinsic opportunity to start the marriage off on the right foot.
But how do you bring it up? Quite simply, start the conversation early, preferably right after an engagement when you’re defining what you want from the marriage. The most effective prenups have both partners working together to determine the terms, navigating sticking points, allowing for opportunities to listen to a partner’s concerns and leaving the door open to potential changes over time as the family grows or assets change.
The Finer Points of Prenuptial Agreements in Arizona Courts
When you do end up in agreement on moving forward about pursuing the prenup, Arizona requires that each party hire its own independent attorneys – preferably a family law attorney. With proper legal representation for each spouse, fairness is supported by making sure each party understands the terms of the agreement they are entering into.
While this may be your first prenup, the family law or divorce attorneys you choose to work with have likely worked together for years crafting many agreements, while taking out awkwardness and discomfort that most couples will feel. In addition to guiding you through full and complete disclosure of each party’s assets and debts, they will also help create a legally binding document, implementing the required elements specific to Arizona law, including fully opting out of the state’s community property laws, if that is your agreement.
If you’re getting ready to take the marital plunge, get the marriage off to the right start – in a way that protects you and your assets now and into the future.