What are some things to consider when deciding whether to get a prenuptial/postnuptial agreement for an Arizona marriage?
Up front, it is important to know that Arizona law recognizes both prenuptial agreements and postnuptial agreements. The difference, in essence, is whether the agreement is made before (pre) or after (post) the marriage takes place. For the sake of simplicity, this writing will use term “prenup” to generally refer to both kinds of agreements. Some couples decide to forego prenups, either because of the belief that a such agreements signal a lack of confidence in the relationship, concerns about social appearances or social pressure from friends and family, or even just due to the perceived costs of obtaining legal counsel. Before making such a major and impactful decision, it is important to know a few basic points about prenups and to consider the pros and cons. This writing discusses some of the advantages and drawbacks of using a prenup in an Arizona marriage.
In Arizona, a prenup can be used to determine the property rights of a married couple in the event of either a divorce or a legal separation. Also, while a prenup does not directly affect creditors, the way in which property is classified in a prenup may have an impact on what property a creditor might be to attach to satisfy a debt. Likewise, the terms of a prenup might classify property in a certain way that impacts estate planning. Prenups can also establish clear expectations as to how finances will be handled, including such things as how income will be used and divided, and how property will be handled during the course of the marriage. In this way, prenups can serve more purposes than simply “protecting” one side or the other during a divorce and can have a practical impact on the day to day of the marriage itself.
While setting up a prenup may feel embarrassing, it can ultimately afford more privacy and less embarrassment in the long run. When a couple goes through the divorce or legal separation process, they often have to exchange detailed financial information. If a couple cannot settle their divorce or legal separation, some financial documents may be submitted to the trial court for consideration and, potentially, result in those documents becoming part of the public record. A prenup can offer the peace of mind that if it is comprehensive enough and if it is upheld, there is less of a chance that such sensitive and invasive documents might be made public. It is important to note that couples can also agree to keep the terms of a prenup confidential, further minimizing concerns that the prenup will harm the image of the couple with family and friends. In sum, a well written prenup can by more helpful than harmful in this regard.
An effective prenup can also save more money in the long run. Some couples shy away from considering a prenup because it is an added cost to address a concern that may seem too remote or unlikely to matter. However, just as with an insurance policy or a will, the importance of the legal instrument can be unforeseeably sky high under the right circumstances. At a minimum, the up-front legal cost of preparing a prenup is often far lower than the cost of legal counsel during contested divorce or legal separation case. Contested court cases can also involve other costs as well, including such things as process server costs, court filing fees, and expenses related to pretrial investigations. Depositions, for example, can be costly with each party potentially paying for their attorney’s fees and a party also paying for the presence of a court reporter for the same proceeding. Similarly, parties who opt for private mediation during divorce or legal separation cases may have to bear the costs of their legal counsel in addition to the expense of the mediator’s fees. A prenup can avoid a lot of these possibilities and grant some added peace of mind when it comes to finances.
With these benefits in mind, it bears noting that there are some drawbacks / limitations to prenups that worth considering. There are certain statutory limitations on the subject matter of a prenups under Arizona law. For example, a prenup cannot be used to adversely decide child custody matter, so it cannot be used to reduce or eliminate child support. See ARIZ. REV. STAT. ANN. § 25-203(B). Additionally, a court may decline to enforce a spousal maintenance agreement if it does not adequately provide for the support of spouse who becomes dependent on public assistance. See ARIZ. REV. STAT. ANN. § 25-202(D).
Additionally, prenups can deemed unenforceable under certain conditions. For example, if one of the parties cannot demonstrate that they did not execute the agreement voluntarily, it be deemed unenforceable. See ARIZ. REV. STAT. ANN. § 25-202(C)(1). This sometimes comes up when a party claims that they were inappropriately pressured into signing the agreement, or that they were rushed into signing the agreement shortly before the wedding. Additionally, a prenup might be unenforceable when the terms are unconscionable and there are defects in the disclosure between the parties of property or financial obligations. See ARIZ. REV. STAT. ANN. § 25-202(C)(2).
These enforceability issues mean that to help ensure that a prenup will be upheld, the parties need to thoroughly exchange information about the assets and debts of the parties, with adequate time for the parties to consider their options, before signing a prenup. This requires each party to carefully review their own financial situation and communicate that information in way that is fair and transparent to the other party. Some individuals may feel uncomfortable sharing their financial circumstances with their soon-to-be spouse. However, marriage carries with it a profound financial aspect that couples may choose to ignore at their own risk.
The attorneys of Huffman-Shayeb Law, PLLC have a practical, commonsense approach to handling prenuptial agreements in the State of Arizona based on years of experience in the field. Our attorneys can and do provide clients with tips and best practices for crafting a prenuptial agreement that meets their needs. If you are looking for experienced, thoughtful representation in an Arizona family law case, contact Huffman-Shayeb Law, PLLC to schedule your consultation today! Our attorneys are here to help.
