7 Things a Prenup Can (And Can’t) Do

Planning to marry the one you love is an exciting time and comes with minimal to massive preparation depending on the couple. No one gets married thinking that one day they will separate or divorce. Yet, life happens. Couples who want to define their rights and responsibilities in the event of divorce or separation often choose to create a prenuptial or premarital agreement, more commonly referred to as a prenup.

When people see prenups discussed in movies or television, or they hear about them, they often associate them with money. Yes, money does play a role in prenups, but couples use prenups to define multiple elements of their divorce or separation. Below we’ve provided more information to dispel some common myths about prenups with 7 Things a Prenup Can (and Can’t) Do.

What A Prenup Can Do

1. Define Property Rights

Arizona is a community property state, which means that in the event of a divorce, couples must equally divide all of their property and assets. A prenuptial agreement supersedes state law and allows couples to specify their assets, liabilities, and income as separate from community property. For example, consider a couple that has two vehicles, a home in Phoenix, a vacation home in Sedona, and sizable savings scattered throughout brokerage accounts and IRA accounts. Under Arizona law, the distribution of these assets would require each person receiving half of the proceeds of the sale, or buying the other person out of their half to keep the property.  A prenup might outline that each person gets one home, each person gets one vehicle, and each person gets a portion of savings. Yet, the split doesn’t need to be equitable. The couple could decide that one person gets all the physical assets and the other gets all the financial assets.

2. Define Limits on Spousal Maintenance

Couples can use a prenup to define the amount of spousal maintenance one party receives and the other pays. Arizona also allows both parties to waive their rights to spousal support under the law. Yet the prenup must adhere to certain legal requirements. They include:

  • Each party must be represented by independent legal counsel.
  • Each party must enter the agreement with full disclosure.
  • No party can enter the prenuptial agreement with no fraud or duress.
  • The limits or waiver of spousal maintenance cannot result in an unconscionable situation.

Most challenges to prenuptial agreements concern spousal support. This often occurs because a couple accumulates more assets during their marriage, which the agreement does not deflect. An experienced divorce lawyer can draft a prenuptial agreement that can help couples avoid issues later on.

3. Define Inheritance Rights in the Event of Death

Arizona law allows couples to waive or designate inheritance rights in the event of a death. This is typically done in tandem with the making of a will or trust that is enforceable under Arizona probate law, too. Prenups also allow couples to designate ownership and beneficiary rights from a life insurance policy. Without a prenup, spouses legally inherit 50 percent of all assets because Arizona is a community property state. A prenup allows spouses to designate where the other half of their property goes upon their death. Sometimes couples agree on waiving rights when one or both have children from a previous marriage.

4. Address Tax Matters

An Arizona prenup can include provisions that address tax matters. For example, a couple can designate who must prepare their joint tax return and designate what portion of taxes each must contribute. This is especially common when one person has a significantly higher income than the other. Couples can also assign property tax burden by agreeing that each is responsible for taxes on a different property. Couples can define specific tax responsibilities as long as they comply with current tax law.

What a Prenup Can’t Do

5. Limit Child Support

Parents have a legal duty to financially support their minor children. Prenups cannot contain any provisions that limit or adversely impact child support in the event of separation or divorce. Arizona courts retain jurisdiction to create and enforce child support orders for the benefit of a child. The court will calculate child support based on Arizona Child Support Guidelines. Yet, parties can include additional support in a prenup to account for things like extracurricular activities, private music lessons, private sports instruction, travel, and more.

6. Penalize Adultery

In some states, couples can include a lifestyle clause in their prenup that penalizes a person for their infidelity. Penalties might include a lesser amount in assets or the cheater paying the other with property or money for their infidelity. Arizona prenups cannot have infidelity clauses. Arizona is a no-fault divorce state. Couples can assign infidelity or adultery as the reason for their divorce, but courts cannot enforce specific penalties on those who cheat within their marriage. A prenup with an infidelity clause violates Arizona law, making it unenforceable.

7. Hide Assets

Sometimes when a wealthy spouse enters into a marriage, he or she attempts to use a prenup to hide assets instead of protecting them. This occurs by creating a prenup that has favorable terms and urging the other person to sign the agreement without fully disclosing all valuable assets. The law requires that each party fully disclose their true financial pictures, including assets and liabilities. This way each party can make a well-informed decision about whether to sign the prenuptial agreement as it is written. Without full disclosure, prenups are unenforceable by the court.

Contact DeShon Laraye Pullen PLC Today to Draft Your Prenup

Congratulations on your upcoming wedding. We have more than 30 years of combined experience in family and divorce law and are here to help you draft an enforceable prenup to protect your personal and financial property in the event of divorce or separation. Contact us today online or at 602-252-1968 to schedule an initial consultation to discuss the terms that are most important for your prenup.

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