A prenuptial agreement is an agreement created between the parties to marriage prior to their nuptials. It is used by couples who do not want their assets divided in accordance with Arizona’s equitable distribution laws if they decide to divorce. This means that prenups are oftentimes used by individuals, whose prenuptial agreement essentially allows them to create their own rules for what will happen to their property during and after their marriage ends.
Most people think of prenuptial agreements as a way to protect the wealthier partner in a relationship. But did you know that prenups can also be used to protect less wealthy individuals? In Arizona, both spouses have the right to enter into a prenuptial agreement before getting married. If you’re wondering whether or not you need a prenup, take our quiz and find out!
Do You Own A Significant Amount Of Assets?
There are cases where prenuptial agreements are not needed. If there is little to no community property involved, it may be unnecessary. However, premarital assets are commonly brought into a marriage which can present issues if there is no prenuptial agreement prior to the marriage. This of course depends on what you own and if anything significant is owned by your spouse or their family members.
If you do not have premarital assets, but your fiancé does and you want them kept separate in case of an eventual divorce or death, then a prenup will be advisable. There’s nothing wrong with saying “no” to prenuptial agreements; however, when significant premarital assets exist in a marriage, prenuptial agreements are usually a good idea.
It is important to remember that premarital assets do not belong solely to the person who brought them into a marriage. If you have a prenup, it’s more likely you will keep these premarital assets if the marriage ends in divorce or death. However, if there is no prenup, then all premarital assets acquired during a marriage belong to both spouses equally and may be subject to equitable distribution.
Are You Bringing Children From A Previous Marriage?
Prenups are used to protect children from a previous marriage in the event of death or divorce. A prenup can stipulate that if one spouse dies or files for divorce, the assets they brought into the marriage will go back to them and not be shared with their ex.
A prenuptial agreement can help protect your children from a previous marriage by specifying that children of the marriage will be entitled to inherit under Arizona’s laws and not the laws of the state where you lived before you married.
Do You Own A Business Prior To Getting Married?
Arizona prenuptial agreements protect both parties. When coming into a marriage with substantial assets, it is advisable to consider a prenuptial agreement for those assets as well as any business ventures or work you might do before and after the wedding.
According to pre-marriage planning experts, prenuptial agreements are becoming more popular despite their bad rap in movies and television dramas. It is important to note that pre-marital planning experts advise not rushing through prenuptial agreements without thorough vetting of all aspects of your financial life, including past divorce actions, retirement plans, property ownership/value of real estate owned prior to getting married, and shareholding interests of businesses or other non-liquid investments such as or royalties.
Do You Or Your Spouse Have A Significant Amount Of Debt?
Many couples in Arizona are aware that prenuptial agreements can help protect property when one spouse is wealthier than the other. What many people do not understand is that prenuptial agreements are not only for divvying up assets in case of a divorce.
They are contracts with binding legal effects between two spouses that deal with many different kinds of issues that concern both parties. When prenups are created by wealthy individuals who have substantial debt, there may be restrictions on how debts can be paid during marriage and even what happens to marital debt if the couple divorces.
If you have significant debt like student loans, credit card debt, or car payments that neither of you had before getting married then each spouse should be responsible for their own pre-existing debt unless they agree otherwise in writing during the prenuptial agreement.
If you file for divorce, this pre-marriage debt will be determined by what is in the premarital agreement unless one of you can prove that it would have been unfair to hold your spouse responsible for your pre-existing debt when they had no knowledge of these debts before getting married.
Do Expect To Inherit Something?
Many people are reluctant to have prenuptial agreements, although they come in handy when it comes to inheritance. It is important to know that prenuptial agreements do not affect any inheritances you receive during your marriage or afterward.
Prenuptial agreements are upheld no matter the amount of money you receive through inheritance. They serve as a “buffer” between spouses and their separate assets, which includes anything inherited by either party before or during the marriage. This way neither spouse has control over another’s property after death or divorce.
For example, if one spouse received an inheritance from his parents but did not disclose it at the time of prenup signing, this would be grounds for invalidating the prenuptial agreement. Furthermore, prenuptial agreements do not affect the spouses’ wills or bequests. It is important to note that prenuptial agreements are only binding until one spouse dies.
In this situation, if a prenup was signed and neither party had any assets at the time of marriage but there were also no prenup terms about inheritance, then a premarital trust can be established in order to protect any asset acquired during marriage inherited by either spouse from their premarital estate plans.
If you answered yes to any of the questions above, you may want to consider a prenuptial agreement. Prenups are becoming increasingly common in Arizona, and for good reason—they can help protect both parties’ assets in the event of a divorce. If you have more questions about prenups or would like to discuss your specific situation, give us a call today. We’d be happy to answer any of your questions and help you determine if a prenuptial agreement is right for you.
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