Premarital Agreement Basics
In the past ten years or so, there has been a significant rise in couples exploring the option of entering into premarital agreements. Many soon-to-be-married couples often avoid the topic of premarital agreements as they feel it could be detrimental to their relationship. This makes sense, since you’re essentially negotiating what would happen in the event of divorce. However, in many circumstances, it can be a really smart thing to do both financially and emotionally. Experts agree that a premarital agreement can be a very wise decision, not only because it outlines a couple’s finances, but because it can prevent a costly and contentious divorce proceeding if the marriage doesn’t work out in the future. So, in that sense, it can actually take the pressure off a newly married couple.
Here are the basics when it comes to a premarital agreement:
What is a premarital agreement?
A premarital agreement (also commonly called a prenuptial agreement or a “prenup”), by definition, is a written contract in which an engaged couple states their rights and responsibilities regarding premarital and post-marital assets and debts, including what would happen should their marriage end in divorce or death.
How much does a Premarital Agreement cost?
The cost of a premarital agreement greatly depends on the complexity of the issues and the amount of assets and debts to be protected, but it is far less expensive than the cost of a contested divorce litigation.
Who Needs a Premarital Agreement?
Of course, anyone can get a premarital agreement if they would like. However, there are certain circumstances in which it would be recommended. These circumstances include when one or both parties have children; when one or both parties have been previously married and divorced; when one or both parties own a home; when one or both parties own a business; or when there is a significant difference in wealth and/or debt between parties. People in these circumstances often have a greater interest in protecting their rights (particularly their financial rights) than those who are not in these situations.
How do I get a Premarital Agreement? What does the process look like?
Typically, one party, usually the higher earning party, will retain an attorney to create a draft of the agreement. After that draft is completed, the other spouse will have their own attorney look it over, negotiate terms, and make suggestions for possible changes and edits. Once both parties and their attorneys have approved the final draft, the contract must be signed and executed.
Depending on the complexity, a premarital agreement can take anywhere from a few months to a few days, but it certainly is not the best idea to wait until right before the wedding to begin consulting with attorneys.
Do you have to have separate lawyers?
It is advisable for both parties to have their own attorneys. Having separate lawyers ensures that both parties’ interests are represented fairly. It will also make it more difficult for a party to challenge the provisions in the future.
One lawyer cannot, or at least should not, represent both parties as there would be a conflict of interest. Additionally, while it is not required that both parties consult with an attorney, we recommend it, because if one party has an attorney and the other does not, the party without an attorney will be at a significant disadvantage.
Can you set the terms for child support and custody in a Premarital Agreement?
In Arizona, you cannot set the terms for child support or custody in a Premarital Agreement due to public policy concerns. The Family Court has the ongoing right to set or change the terms of legal decision-making authority, parenting time, and/or child support at any time, now or in the future. If the parties divorce, the courts will deal with those issues at that time. But keep in mind that while a parenting plan is not enforceable without a judge’s approval and signature, a Premarital Agreement is enforceable as a binding contract as soon as it is signed by the parties.
A Final Thought
Today many people are marrying later in life, after they are already established in their careers and have accumulated significant assets, and sometimes after they have been previously married and divorced. Blended families, in which each spouse has their own children from a prior relationship, are common. As a result, the need to protect assets is greater now than ever before. This makes entering into a premarital agreement a wise move.
By Logan Matura
At the Law Firm of Gary J. Frank P.C., our Arizona Family Law Attorneys Gary Frank, Hanna Amar, and Logan Matura are strong litigators and compassionate counselors. Gary Frank is a Phoenix Family Law Attorney with over 30 years of experience as a litigator and mediator. He has also acted in the capacity of a Judge Pro Tempore in the Maricopa County Superior Court, and served on the Governor’s Child Abuse Prevention Task Force. Law firm Partner, Hanna Amar is a highly-skilled Arizona Family Law Attorney with a passion for Family Law and children’s issues. She has extensive courtroom experience, and is also a certified mediator. Hanna has also acted as the President of the Young Lawyer’s Division of the Maricopa County Bar Association. Associate Attorney Logan Matura is an Arizona Family Law Attorney who received her Juris Doctor degree from New York Law School in Manhattan, NY. While in law school, she served as an intern for a Family Court judge in the Bronx, NY, and was a member of the Family Attorneys Mobilizing club. Our firm handles Family Law cases in the areas of divorce, custody (now called “Legal Decision-Making and Parenting Time), relocation (move-away), division of property, spousal and child support, modification actions, enforcement actions, grandparent and step-parent and non-parent rights, as well as other matters pertaining to families and children. If you are in need of a consultation, call us today at 602-383-3610; or you can contact us by email through our website at www.garyfranklaw.com. We look forward to hearing from you.