Pre-Marital and Post-Marital Agreements
Additional Information
When you’re planning to get married, there is no shortage of things to do: venues, guest lists, travel plans, licenses, having a serious discussion with your partner about the legal and financial consequences of your marriage…wait, that last one sounds boring and difficult. Better leave it until later; those things take care of themselves anyway, right? Yes and no. As any Arizona family law attorney can attest to, Arizona’s community property laws create default rules about property and debt for married couples, but they don’t always work the way couples expect them to. Creating a pre-marital agreement is the best way to ensure that you and your partner are going into the marriage with the same intentions and that those mutual understandings actually take effect. And while some people are reluctant to address what seems like an “unromantic” topic, having a frank discussion with your partner about what you each expect from the other can actually strengthen your marriage as well as providing security and protection to both parties.
Arizona is a “community property” state, which generally means that assets and debts that are acquired during the marriage are held in common between the spouses. You can read more about the topic here, and it’s always best to consult with an Arizona family law attorney for specific advice but for the purposes of thinking about premarital agreements, the point is that, like many legal rules, community property is only a default rule and couples are allowed to “opt out” and make their own rules about how assets and debts will be shared in their marriage.
There are generally three time periods to think about when considering a premarital agreement: before the marriage occurs, during the marriage, and after the marriage ends, either because one party passes away or because of a divorce.
If one or both parties have assets or debts of their own before the marriage, in may be important to discuss how those will be managed during the marriage. In general, premarital assets and debts of one spouse do not become joint assets or debts, but there are grey areas and spouses sometimes have different expectations and discussing these issues ahead of time can avoid tension later in the relationship. For example, do both parties think it’s fair to spend household funds to pay one party’s old debts? Or, if one party starts a “side business” before the marriage which later turns into their primary focus, should that change how the parties split their incomes?
Under the default community property rules, most kinds of income that a spouse can earn and most kinds of debts that a spouse can incur during the marriage become community assets and community debts, respectively. This may not be what a particular couple wants, though, and a premarital agreement can set up a different arrangement. Perhaps each spouse prefers to be solely in control of their own earnings, for example, or wishes to call out a specific piece of real estate or business enterprise as being separate from the general common pool of community assets. Some couples use the premarital agreement as a layer of asset protection as well, by agreeing that neither one will be responsible for debts incurred solely by the other. With proper drafting and notice, such agreements can be effective against third parties.
You may have heard the statistic that half of all marriages in the United States end but this is incorrect. Legally speaking, all marriages end eventually. Sometimes they end because of a divorce and other times, the marriage ends because one or both spouses has pass away. A premarital agreement can address both of these scenarios and lend some predictability to an uncertain future. Topics such as dividing marital assets and debts, whether one spouse should be required to pay spousal maintenance and if so, how much and for long, and the terms to be included in each spouse’s will or trust are all common (and advisable) parts of premarital agreements.
On the other hand, some topics are worth discussing with a future spouse but cannot be made legally enforceable. One question Arizona family lawyers often get when discussing premarital agreements is whether the agreement can include penalties for “bad behavior” like marital infidelity. While Arizona has not specifically prohibited this kind of “lifestyle clause” in a premarital agreement, a court would most likely look to the reasoning used in the California case of Diosdado v. Diosdado, 118 Cal.Rptr.2d 494, 97 Cal.App.4th 470 (Cal. App. 2002), which pointed out that enforcing terms like these would undermine the state’s long-standing policy of “no-fault” divorce. Because the family court must always make a decision about legal decision-making authority, parenting time, and child support that is in the child’s best interests, terms in a premarital agreement that attempt to determine those issues are not likely to be enforceable either.
In addition to premarital agreements, Arizona also recognizes agreements made about property after the parties are married, such as post-nuptial agreements and separation agreements. A post nuptial agreement sounds similar to a pre-nuptial agreement, but it cannot generally alter community liability for debts and is evaluated for fairness on a much stricter standard than a pre-marital agreement would be. A separation agreement is a specific kind of post-nuptial agreement which authorized by A.R.S. section 25-317 which allows parties who are about to get divorced or legally separated to make legally binding agreements about property, support, and their children, provided that the family court finds the agreements to be fair and reasonable.
