Pre & Postnuptial Agreements: What You Need to Know

As you plan for your new life as a married couple, the last thing you probably want to think about is what will happen if your marriage ends in divorce. The thought of this makes many couples shy away from the idea of a prenuptial agreement, even when this document could make things easier in several ways. Many people have not heard of the term, let alone be aware of the benefits of a postnuptial agreement.

To help you ensure a smoother relationship throughout your marriage, and even more so in the event that your marriage ends, here are a few important things to know about pre-and post-nuptial agreements.

What Is a Prenuptial Agreement?

A prenuptial agreement is a voluntary contract entered into before two people get married. Future spouses decide what goes into the contract/agreement without the use of the courts. The agreement stipulates what will happen to certain assets and obligations in the event of a divorce.

Prenuptial agreements address many of the same issues as divorce or separation agreements, including which debts and which assets (such as bank accounts, property, collectibles or art, and vehicles) go to which parties. Prenups often stipulate which assets were brought into the marriage by which parties, officially separating these from marital assets.

The specifics of your prenuptial agreement are customized to your situation. The agreement could discuss anything from who gets the family home to how to share custody of the family dog.

What Is a Postnuptial Agreement?

A postnuptial agreement is very similar to a prenuptial agreement, but the couple enters into it after the wedding day. Postnups are less common and may require more attention to the details as more assets can be involved and complicate matters.

State law governs the division of marital assets, your agreement must take family law into consideration. This agreement may be less about who brought which assets into the marriage and more about how shared assets will be divided.

Why Should You Sign a Prenuptial Agreement?

There is a false assumption that prenuptial agreements are only for wealthy people. While this misconception is common, a prenup can protect the finances and relationship of many couples. A prenup resolves the potentially emotional and difficult negotiations of a divorce before they even get started and helps prevent problems between you and your ex-spouse if anything happens to the marriage.

A prenup is also a great way to get all your cards on the table and promote honesty about financials from the beginning of your marriage. Specific information about each party’s assets and debts, put into writing for both to understand and may help to facilitate healthy discussions about the future. Both sides in the agreement must thorough and forthcoming in order for a prenup to achieve its purpose.

Why Should You Sign a Postnuptial Agreement?

A postnuptial agreement is a good way to protect your finances if you disagree with the way that your state divides up marital assets. If you live in a community property state such as Arizona, for instance, the court would likely divide assets 50/50. If you and your partner prefer a different arrangement, a postnuptial agreement helps make that happen.

Postnups are also a good idea if you signed a prenuptial agreement many years ago, or if circumstances have changed. If one person has received an inheritance or a gift that may get co-mingled with marital property, a postnup could help prevent it from being lumped in with other marital assets.

Where Should You Start?

If you think that a prenuptial or postnuptial agreement could be a helpful tool for your relationship, call on DeShon Laraye Pullen PLC to learn more about these important documents. With more than 30 years of combined experience, we will aid you in crafting the right agreements to strengthen your marriage and prevent future problems. Call today to make an appointment.

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.

Will a Prenuptial Agreement Destroy Your Marriage?

You’ve dreamed of finding the right person your entire life, and now you have. You and your partner are ready to start an incredible life together, and it all begins with a wonderful wedding day. Before you walk down the aisle, though, you’ll have a few choices to make. Yes, you’ll have to decide which caterer to use and who will be a bridesmaid, but you’ll also need to discuss whether you want to utilize a prenuptial agreement. Before you sign your marriage license, make sure you understand what a prenuptial agreement is, how it works, and whether one is right for your relationship. Here’s what you need to know.

First off, it’s important to understand exactly what a prenuptial agreement is and what it is not. This type of agreement is a legally binding document that is designed to protect your personal assets and belongings in the event of a divorce. While no one enters a marriage with the expectation of the relationship ending, it’s important to keep in mind that marriages end for a number of different reasons. Many of these are out of your control. People grow, circumstances change, and relationships adjust. A prenuptial agreement ensures that in the event of a divorce, you and your partner will leave with your personal assets, rather than dividing these equally after your separation.

If you’re thinking about creating a prenuptial agreement, you can start by meeting with an attorney. Your lawyer wants to help both you and your partner move forward. They’ll be able to advise you as to how a prenuptial agreement can benefit both of you. Your attorney can answer questions about the document and assist you in drafting a prenuptial agreement that works for you. Understand that even if you aren’t sure what you want to include in the prenuptial agreement, your attorney can provide guidance and assistance.

Some couples worry that a prenuptial agreement will damage their relationship. They’re afraid that if they choose to create a prenuptial agreement, it will cause a rift between them. Before you choose to create this document, sit down with your partner. Have an honest discussion about the benefits or drawbacks of creating a prenuptial agreement. If either one of you owns property, has family heirlooms, or owns a business, a prenuptial agreement can be especially beneficial. Should you divorce at some point in the future, this agreement ensures that you will each walk away with your personal assets that you brought into the relationship.

In addition to protecting your assets, a prenuptial agreement can discuss how you want to handle alimony, as well as the separation of debt. Once you are married, you and your partner may choose to utilize joint checking accounts or credit cards. If you separate, this will need to be divided and each person will be held liable for a certain portion of any debt. A prenuptial agreement can discuss this carefully.

Whether you have been dating for weeks, months, or years, make sure you have an honest discussion with your partner about creating a prenuptial agreement. Simply broaching the topic of a prenuptial agreement should not cause damage to your relationship. After all, if the two of you stay married, it will never come into play. If, however, you do choose to separate, it can provide protection and benefits for both of you.

It’s also important that you remember to meet with an attorney to draft up a legally-binding prenuptial agreement if you choose to utilize one. A verbal agreement will not be considered a legal agreement in the case of a divorce as there is no way to prove what was actually said or agreed upon. A family law practice attorney can help you and your partner carefully consider your wishes and desires going into your marriage and can assist you in creating the documents you need to move forward together.

You can schedule an initial consultation with a Phoenix prenuptial agreement lawyer today by calling 602-252-1968 or by sending us a message through our online contact form.

Marriage / Divorce Affect My Business? | DeShon Laraye Pullen Guide

How Will Marriage Or Divorce Affect My Business?

If you own a business – or plan to in the near future – it is important to know how your business interests may be impacted by marriage or divorce.

Arizona is a community property state. Businesses started during marriage are considered community property. Regardless of whether the business was started before or during marriage, increases in its value during marriage are considered community property.

This surprises many. It’s not uncommon for people to view their careers and home life as completely separate. Many professionals or skilled tradespersons have the dream of owning their own business but it doesn’t become a reality until a bit later in life. Marriage, kids and other big family events may precede business ownership.

We use a fictional character, Karen, as an example.

Karen is artistically gifted and good with people. As a young adult, she became a highly successful tattoo artist at one of Phoenix’s largest parlors. Although she was happy, she always dreamed of opening up her own shop someday. Wisely, she began saving money for her dream.

Karen met the love of her life – or so she thought – and they married. Her spouse had a steady job and made roughly the same income. They both lived within their means and rarely considered big purchases. They used most of their disposable income to travel the world.

Years later, Karen’s dream became a reality. The perfect business location became available and Karen had saved enough over the years to open her own upscale parlor. After a tough first year, her business became successful and Karen began making more money than she ever had before. She reinvested much of it into her business.

Despite great career success, her home life was not doing well and her marriage was irreparable. When Karen met with her divorce attorney, she was shocked to learn that her business was community property, or marital property. She now fears that her divorcing spouse will want to keep half the ownership interest in her business rather than letting her “buy out” his interest.

What could Karen have done to give her more control over her business?

She could have worked out a premarital contract, or prenuptial contract, with her partner before getting married. These agreements are soaring in popularity because they allow marrying people to have certainty about important things in live – such as a business – even if divorce occurs.

Hopefully, with the help of her divorce lawyer, Karen is able to reach a reasonable divorce agreement that allows her to move on with her life and career. If she marries again, she knows she will only do so with a premarital agreement in place that ensures she will retain exclusive ownership of her business.

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