Prenuptial Agreements in Arizona

Arizona Revised Statute § 25-201(1) defines a prenuptial agreement as “an agreement between prospective spouses that is made in contemplation of marriage and that is effective on marriage.” Prenuptial agreements often evoke negative connotations, such as distrust or an assumption that a marriage is unlikely to last. However, the reality is that a prenuptial agreement does not imply an expectation or anticipation of divorce. Rather, it provides financial protection and reduced likelihood of family conflict in the future. Furthermore, since divorce statistics suggest that 50% of all marriages end in divorce, it seems prudent to take this step to protect one’s own financial security when entering into a marriage relationship.

Marriage is a financial, as well as emotional relationship. When entering into marriage, one’s emotional state may cloud prudent financial decisions. As a result, one may believe that they do not require a prenuptial agreement, regardless of the assets that they bring into the marriage. However, in a community property state such as Arizona, without an existing prenuptial agreement any and all property acquired during marriage will be divided evenly during a divorce. This includes earnings, incomes, retirement and possessions. In signing a prenuptial agreement, the parties contractually agree that instead of applying Arizona divorce law, the specific contract between the parties will apply. So, though it can be a difficult subject to broach, it is important to consider and discuss the possibility of a prenuptial agreement before marriage, in order to be protected in the event of a divorce.

The prenuptial agreement describes what will become of assets and debts if a divorce were to occur. It does not allow for contractual agreements regarding child support and child custody. The prenuptial agreement allows for the determination of assets to be agreed upon without the emotions and negativity inherent in many divorces. For couples without an existing prenuptial agreement, the divorce process is likely to be more complicated and more costly, since emotions are likely to cloud judgment as to what is “fair” in regards to a division of assets and lead to a far less amicable divorce.

A prenuptial agreement may not be appropriate for all couples. Generally, it would not be necessary in a marriage involving two young people with little or no assets and no other children from prior to the marriage. However, a prenuptial agreement may be important to consider in the following situations: if one spouse is substantially wealthier than the other, if one spouse owns a business, if one spouse is likely to earn a large amount in the future, such as through a lucrative career or inheritance, or if one spouse has children from another marriage or elderly family members to take care of.

A prenuptial agreement must be a formal document, signed by each party. In order to ensure that is upheld by the court, the prenuptial agreement must be fair to both parties, and must be entered into willingly. It is important that the both parties have had equal say in the prenuptial agreement, and that neither party was forced into the agreement without fully understanding the legal consequences.

Tamara Hirsch, JD, LCSW