Prenuptial or Postnuptial Agreements
A prenuptial agreement is a contract that two parties enter into in contemplation of marriage. It can also be referred to as a "premarital agreement," or "antenuptial agreement," or simply a "prenup". In most states, until the late 1970s, prenuptial agreements were against public policy and not valid to the extent they pertained to divorce or separation. They were considered against public policy because it was thought that they encouraged divorce and allowed the husband to thwart his legal obligations to support his wife.
Generally, a prenuptial agreement sets foth how the marital assets will be divided in the event of a divorce or legal separation or either spouse's death. It can also address what assets remain the separate assets of each spouse and what happens to the appreciation in value of the seprate assets. For example: Julie owns a home worth $250,000 on the date of marriage and six years later it is worth $350,000. By signing a prenup before her marriage, she and Joe can agree that any appreciation on house belongs to Julie as her sole and separate property. Whereas, without the prenuptial agreement, the couple's marital community could have a lien against the house, providing that Julie and Joe paid the mortgage with their community income.
In Arizona, which follows the Uniform Premarital Agreement Act, there are several requirements for a validly executed prenuptial agreement. First, the agreement must be in writing; there are no oral prenuptial agreements. Second, the agreement must be executed voluntarily; if it found that either party signed the agreement under duress or unfair pressure fro teh other side, it will not e enforced. Third, the agreement must not be uconscionable; it if leaves one party destitute or places an unreasonable burden on one party, then it will not be enforced. Lastly, the agreement needs to be validly executed by both parties before a notary public.
These requirements are not only necessary at the time of the agreement's signing, but they must also be sustained for the duration of the marriage in order for the agreement to be enforceable should the marriage be dissolved. For instance, one of the conditions of a valid prenuptial agreement might be that the marital home will go to one of the parties upon the dissolution of the marraige. This might be conditioned upon that party making the mortgage payments directly from his or her income. However, if the couple decides to comingle their income and uses that co-mingled income pool to make mortgage payments, the otherwise valid prenuptial provision may be held unenforceable.
Arizona has enacted the Unifrom Premarital Agreement Act under A.R.S. 25-201 et seq. Both parties are required to disclose their assets and debts in writing. The disclosure is attached to the prenuptial agreement. This disclosure describes with specificity any sole and separate property that either party owned before the marriage. A prenuptial agreement can protect the spouse with a significantly greater amount of assets than the other spouse. It can also provide for a spouse in the event of death or divorce. In the absence of a prenuptial agreement and without a valid will, the law will decide what assets go to the surviving spouse no matter what the true intentions were of the deceased. Moreover, as a practical consideration, it just makes common sense for a couple with assets or children from a previous marriage to understand what their financial rights and responsibilites are prior to entering into a second marriage.
Anyone seeking to execute a prenuptial agreement should seek legal counsel for every step of the process as there are too many legal considerations to take care of without professional help. There are both procedural and substantive isues with regard to the preparation of the premarital agreement. Going into an attorney's office a few days before the wedding with a prenuptial agreement that one of the parties has drafted for the other's signature is not a good idea.