- Premarital agreements can be entered into between two people who are planning on becoming married.
- Premarital agreements are also sometimes referred to as prenuptial agreements and antenuptial agreements.
Premarital agreements are governed in Arizona by the Arizona Uniform Premarital Agreement Act as set forth in Arizona Revised Statutes Sections 25-201 through 25-205. The statutes, in part, provide that such agreements must be in writing. It is important that the parties disclose in writing their individual assets, debts and incomes as part of the process.
Not everyone needs a premarital agreement. Sometimes, applicable community property laws are consistent with a person’s desires regarding the marriage. For example, community property laws can protect a person’s pre-marriage property to a certain degree without such agreement. However, there are many claims that can be made in a divorce, which the parties did not intend at the time of marriage. A good family law attorney will advise you whether a premarital agreement makes sense for you. Consulting with an attorney who is experienced in drafting and litigating premarital agreements may save you a great deal of heartache and expense in the future.
Types of Premarital Agreements
Parties are lawfully entitled to enter into premarital agreements regarding property interests, income, expenses, spousal maintenance, what happens to their property upon their death, and any other terms that are not “unconscionable,” in violation of public policy, or would constitute a crime. Premarital agreement term regarding future child custody and child support are not enforceable.
Premarital agreements come in all shapes and sizes. Some people merely want to protect the property that they have acquired prior to marriage as sole and separate property, but agree that all income earned during the marriage is community property. Other people desire to enter into a more involved premarital agreement whereby their individual incomes earned after marriage remain his or her sole and separate property. Some people merely desire to agree that no spousal maintenance (alimony) will be paid in the event of divorce.
- Post-marital agreements can be entered into between two people who are already married.
- Post-marital agreements are sometimes referred to as postnuptial agreements.
Post-marital agreements (agreements that are entered into after marriage) can generally address the same issues as premarital agreements. If they are properly written, and if procedures are properly followed, such agreements are generally enforceable. Such agreements, however, are not governed by the Uniform Premarital Agreement Act. Pursuant to Arizona law, the burden of proof for enforcing such agreements is upon the person who desires to enforce the agreement, and is more stringent than the burden of proof applicable to premarital agreements.
Many people (and attorneys) overlook post-marital agreements as a potential alternative to divorce or legal separation. It is common knowledge that many divorces are a product of financial disagreements and concerns. Some people are able to hold their marriage together by separating their finances. However, merely setting up separate accounts will not accomplish this. Income earned during marriage is generally considered community property regardless of whether you keep separate accounts unless you have a premarital or post-marital agreement.
Benefits of Premarital & Post-Marital Agreements
It is quite common for one of the parties to desire to enter into a premarital agreement, while the other person feels that such is an indication that the person is “planning for a divorce.” Although such feelings are understandable, modern realities suggest that it makes good common sense to at least look into the possibility of a premarital agreement even if you fully intend your marriage to last forever. Marriage itself is a contract in many ways, i.e. many years of court cases and statutes govern property, assets, spousal maintenance and other issues. Many of such court cases were based upon social norms that are outdated and do not take the parties’ actual intent or modern realities into account. Moreover, a well-drafted pre-marital or post-marital agreement can save the parties substantial adversity and attorney’s fees in the event of divorce as many of the issues are essentially agreed upon in advance. It is our philosophy that a premarital or post-marital agreement is merely providing defined terms, which would otherwise be governed by a different contract — i.e. complex court cases and statutes that are difficult for a non-attorney to understand.
Without a premarital or post-marital agreement, many people make mistakes that lead to results that they did not intend. For example, people often place their premarital sole and separate residence into both parties’ names after marriage. Sometimes such is required by a lending institution if the person refinances the underlying mortgage. In most cases, the courts will hold that the person intended a gift to the community, and the residence will then be divided equally. Similarly, a person may lose his or her claim to pre-marriage financial accounts merely by adding the other person’s name to the account, even if the person only intended that the other spouse would receive it in the event of death. Sometimes, a person’s pre-marriage funds are co-mingled with community income, thus leading to the entire account being divided 50-50 including the sums saved prior to marriage.
If a parent has children from prior marriages or other persons that they want to make sure receive at least some assets in the event of the parent’s death, it is especially important to at least consult with an attorney prior to marriage.
Checklist of Key Issues to Address & Include In Your Agreement(s)
The following are potential issues to address in a premarital or post-marital agreement. This list is not all-inclusive, but rather sets forth many of the major issues often addressed in marital agreements:
- Premarital assets
- Personal items owned prior to marriage
- Business interests established prior to marriage
- Business intersets established during the marriage
- Income during marriage
- Expenses during marriage
- What happens to property in the event of either person’s death
- Debts incurred prior to marriage
- Debts incurred after marriage
- Assets acquired during marriage
- Retirement funds and pensions
- Insurance policies
- Spousal maintenance
- Inheritance funds and property
Cohabitation & Domestic Partner Agreements
As noted above, cohabitation agreements (also called domestic partner agreements) can be drafted when people reside together or intend to reside together. Such may apply to same-sex couples, heterosexual couples, or platonic friends or family members. Such agreements, if they are properly written and if procedures are followed, are generally enforceable. Cohabitation and Domestic Partner agreements can address the same issues as premarital and post-marital agreements as described above. For example, people may desire to own a home together equally or in different percentages. Cohabitation agreements should address how expenses are shared. Such can also address what will happen in the event of a parties’ death. Like marriages, some domestic partner relationships terminate over time. Even if you plan on residing together for the rest of your lives, it is smart to address how the financial issues are going to be addressed. Such may save a great deal of heartache and expense in the future.
On a somewhat related note, if a same sex couple intends to have a child where only one is the biological parent, or one desires to adopt a child and such is not a two party adoption, it is very important to consult with an experienced family law attorney.
Contact Bishop Law Office, P.C.
William D. Bishop is a certified family law specialist through the Arizona Board of Legal Specialization. Mr. Bishop enjoys drafting premarital, post-marital and cohabitation agreements and takes pride in making sure that such agreements address all issues in a manner and in language, which can be understood by attorneys and non-attorneys alike. Mr. Bishop has been involved in substantial litigation involving premarital and post-marital agreements, and generally drafts most of these types of agreements for the firm.
To learn more about the importance of marital agreements, contact us to schedule an appointment with an experienced family law lawyer.