Arizona Divorce & Family Law Blog : Commentary on Arizona divorce, child custody, paternity, child support & family law litigation. : Arizona Family Law Lawyer & Attorney : Nirenstein Garnice Soderquist, PLC

Keep finances separate

Every state has laws designating certain kinds of assets accumulated during marriage as marital property or community property, even if these assets are held in the name of just one spouse. If a couple divorces, or when one spouse dies, the marital or community property will be divided between them, either by agreement or by a court. If you want to avoid having some or all of your individual accumulations during marriage divided up by a court, you can do so with a premarital agreement.

Protect each other from debts.

Some of us bring debts, as well as assets, to a marriage. If there's no prenup, creditors can sometimes turn to marital or community property to satisfy the debts of just one spouse. But if you want to make sure that saying "I do" does not mean saying "I owe," you can use a prenup to limit your liability for each other's debts.

Provide for children from prior marriages.

A prenup is helpful (perhaps essential) if either of you has children from another relationship and you want to make sure that your children inherit their share of your property. In a prenup, one or both spouses can give up the right to claim a share of the other's property at death, perhaps in exchange for an agreed upon amount of property.

Keep property in the family.

If your property includes something you want to keep in your birth family, whether it be an heirloom or a share in a family business, you and your spouse can agree that it will remain in your family, and you can specify that item in your prenup. This can even include property that you expect to receive in a future inheritance.

Follow through by making your estate plan.

In addition to using your prenup to waive inheritance rights and state your intentions for passing on your property at death, it's vital that you prepare the estate planning documents -- a will, living trust, and so on -- that actually transfer your property as you intend. (See Wills and Estate Planning for more information.)

Define who gets what if you divorce.

Without a prenup, state law will specify how your property will be divided if you ever divorce. These laws may dictate a result that neither of you wants. You can use a prenup to establish your own rules for property division and avoid potential disagreements in the event of a divorce. In most states, you can also make agreements about whether or not one or both of you will be entitled to alimony. Some states forbid or restrict agreements about alimony, however. (See "What You Can't Do With a Prenup," below.)

Clarify responsibilities during the marriage.

In addition to the reasons listed so far, there are countless other uses for a prenup, depending on your circumstances. Here are some examples of other matters people include in their prenups:

• whether to file joint or separate income tax returns or to allocate income and tax deductions on separate tax returns
• who will pay the household bills -- and how
• whether to have joint bank accounts and, if so, how you will manage them
• agreements about specific purchases or projects, such as buying a house together or starting up a business
• how you will handle credit card charges -- for instance, whether you will use different cards for different types of purchases, what kinds of records you will keep, and how you will make payments
• agreements to set aside money for savings
• agreements for putting each other through college or professional school
• whether you will provide for a surviving spouse -- for example, in your estate plan or with life insurance coverage, and
• how to settle any future disagreements -- for example, you might agree to hire either a mediator or a private arbitrator.

There are some things you just can't -- or shouldn't -- do with a prenup. State laws differ as to what matters are considered off-limits. However, as a general rule, any agreement to do something that is illegal or against state-defined public policy will be considered unenforceable -- and may even jeopardize other valid aspects of the premarital agreement. Here are some things that you can't do, at least in some states:

Restrict child support, custody, or visitation rights

No state will honor agreements limiting or giving up future child support. The same holds true of agreements limiting future custody and visitation rights. This is because state lawmakers consider the welfare of children to be a matter of public policy and do not enforce any private agreements that would impair a child's right to be supported or to have a relationship with a parent in the future.

Give up the right to alimony, in a few states

A handful of states similarly limit your ability to give up your right to alimony -- also called spousal support or separate maintenance -- if there is a divorce. Other states permit such waivers, so you will need to know what your state laws say if you are considering this kind of agreement.

"Encourage" divorce

At one time, many courts viewed any prenup specifying how things would be divided up in case the couple splits as void and unenforceable because it promoted divorce. The modern approach allows such agreements, but judges in some states still take a hard look at them. If the agreement appears to offer a financial incentive for divorce to one party, it may be set aside.

Make rules about nonfinancial matters

For practical reasons, you should keep personal agreements out of your prenup. Here is a partial list of nonfinancial matters that sometimes find their way into prenups, but are better dealt with separately. Of course, the possible issues are endless and you may well think of many that aren't mentioned here:

• responsibility for household chores -- from laundry to cleaning to car care
• use of last names after you marry
• agreements about having and raising children, such as birth control, having children, children's names, child care responsibilities, and education
• how you will relate to in-laws or stepchildren, and
• whether you will have any pets and who will be responsible for them.

These kinds of nonmonetary agreements aren't binding in court, and in fact they could cause a judge to take your entire prenup less seriously. Rather than including personal matters in your prenup, you may find it helpful to simply make a list of your most important concerns and discuss them together. If you want to take it a step further, you can underscore your commitment by writing down your personal agreements in a separate document -- perhaps in a letter that each of you writes to the other, clarifying your intentions and wishes.

by Shae Irving & Attorney-Mediator Katherine E. Stoner

It may sound surprising coming from advocates of self-help law, but yes, you do need a lawyer when making a prenuptial agreement.

If you want to end up with a clear and binding premarital agreement, you should get help from a good lawyer. In fact, you will need two lawyers -- one for each of you. Here's why.

Our Anglo-American legal system views marriage as a matter of contract between two consenting adults. The terms of the "marriage contract" are dictated by the laws of the state where the married people live, unless they have a prenuptial, or premarital, agreement in which they set their own terms.

Varying State Laws

The laws governing marriage contracts vary tremendously from state to state. You can certainly do some of your own research to find out general information on your state's laws relating to prenups. But, if you don't want to invest your time learning the ins and outs of your state's matrimonial laws, a lawyer who knows the intricacies of those laws will be an important resource. The lawyer can help you put together an agreement that meets state requirements and says what you want it to say.

Independent Legal Advice

This explains the desirability of having one lawyer, but why two? Prenuptial agreements are still scrutinized by the courts, sometimes very closely. If you want your agreement to pass muster, having independent lawyers advise each of you can be critical. While most courts don't require that each party to a prenup have a lawyer, the absence of separate independent advice for each party is always a red flag to a judge. On a practical note, having separate legal advisers can help you and your fiance craft a lasting agreement that you both understand and that doesn't leave either of you feeling that you've been taken advantage of.

Decide What You Want Before Seeing a Lawyer

That said, it's best not to ask your lawyers to start writing up a draft or final agreement until the two of you have settled on its essential terms. You should put those terms in writing -- either in a written outline or a draft agreement you create yourselves. A prenup prepared by a lawyer who isn't working from terms you've both agreed on is likely to be one-sided and adversarial. If you provide your lawyers with an outline or draft prepared by both of you, the whole process -- and the final document -- will be more balanced.

All of this assumes that you select and use lawyers who are not only competent and experienced in matrimonial law, but who are also capable of supporting the two of you in negotiating and writing up a loving, clear, and fair agreement. Finding the right lawyers can take some time, but it's worth the effort.

Copyright © 2006 Nolo

By Shae Irving & Attorney-Mediator Katherine E. Stoner

These steps will help you decide whether a prenuptial agreement makes sense for you.

Whether to have a prenup is as personal and unique a decision as whether to marry in the first place. Here are a couple of things you can do to figure out whether a prenup is what you need.

Consider the Pros and Cons

Before getting to the specifics of your own situation, it can be helpful to look at the general pros and cons of making a prenup. We'll look at the good news first, then a few downsides.

Prenup Benefits

Making a prenup can:

• protect your separate property
• support your estate plan
• define what property is considered marital property or community property
• reduce conflicts and save money if you divorce
• clarify special agreements between you, and
• establish procedures and ground rules for deciding future matters.

In addition, creating a prenup may actually strengthen your relationship. While people often imagine that negotiating a prenup is potentially divisive, communicating about money matters can actually improve the quality of your relationship and support good communication in your marriage. Even if you don't end up signing a written agreement, just sitting down and hashing out the basics about money and property can eliminate misunderstandings that might otherwise create conflict. Remember that sooner or later you and your intended will be talking about money. If you think you can handle it, most psychologists and legal experts would tell you there's no time like the present.

Disadvantages of a Prenup

While there is a lot to be said for a carefully considered, clearly written prenup, there are some downsides to consider.

It's not romantic. Let's face it, a prenup is not romantic. Being engaged conjures up images of candlelit dinners and walks in the moonlight. Although marriage is a financial partnership as well as a romantic one, if you feel that discussing something as mundane as property and finances, as well as the possibility of divorce, will mar an otherwise beautiful time of your lives, you may not be candidates for a prenup.

The time may not be right. The need for a prenup is partly a question of timing. The issues covered in a prenup will probably arise sooner or later in your marriage: money management, property rights, responsibility for debts, estate planning. And if your marriage doesn't work out, you'll certainly need to deal with divorce decisions.

But making a prenup forces you to confront many of these issues now, at a time when your relationship may still be new and untested. Discussing what goes into a prenup could be unpleasant and stressful, leaving one of your with bad feelings about the relationship. (If now is not the time to make a written agreement, you may be able to make a contract after you marry (a "postnup"); but be advised that postnups have their own disadvantages, including stricter legal rules.)

State law may protect you without a prenup. The laws of your state may do a fine job of accomplishing what you want. For example, you may live in a community property state where assets owned before marriage are separate property and those accumulated during marriage are community property that is owned fifty-fifty. If this is essentially what you would want in your prenup, or maybe even better than what you expected, why go through the work of negotiating a prenup? Still, you'll want to be sure that you're not facing any special circumstances where your state law is unclear. Proceed to the next step and take a careful look at your situation.

Examine Your Situation

Now that you have an overview of the pros and cons, you can focus on the specifics of your circumstances and figure out whether a prenup is what you need.

Step One: Take a Prenup Quiz

If you or your fiance can answer yes to any of the following questions, there is a good chance a prenup would be helpful. If you answer no to every question, you might still benefit, but having a prenup might not be as critical.

• Do you own any real estate?
• Do you own more than $50,000 worth of assets other than real estate?
• Do you own all or part of a business?
• Do you currently earn a salary of more than $100,000 per year?
• Have you earned more than one year's worth of retirement benefits or do you have other valuable employment benefits, such as profit sharing or stock options?
• Does one of you plan to pursue an advanced degree while the other works?
• Will all or part of your estate go to someone other than your spouse?

Step Two: Identify Important Issues

Jot down on a piece of paper a list of the things you might want to include in a prenup, such as separate property identification, decisions about how you will handle money and property while you are married, whether alimony will be paid or waived in the event of divorce, retirement benefit agreements, and agreements about how you want to leave property at your death.

Common Prenup Topics

Here's a quick list of some of the issues that can be included in a prenup:

• separate vs. joint property
• estate planning issues, such as providing for children from prior marriages or leaving family property
• how to handle a separate business
• retirement benefits
• nonresponsibility for the other person's debts
• who gets what, including alimony, if you separate or divorce
• procedures for filing tax returns, including allocating income and deductions
• who pays household bills -- and how
• whether to have joint bank accounts and, if so, how to manage them
• agreements about specific purchases or projects, such as buying a house together or starting up a business
• how you will handle credit card charges
• agreements to set aside money for savings
• agreements for putting each other through college or professional school
• provisions for a surviving spouse in your estate plan or through life insurance coverage
• how to settle any future disagreements, such as with the help of a mediator or by a private arbitrator acting as judge.

Step Three: Assess Your Comfort Level

Next, ask yourself this question: On a scale of one to five, how comfortable am I with the idea of having a prenup? If you give yourself a one or a two, try to identify the reasons for your discomfort. If it is because you are uncertain how the terms of a prenup might compare to your legal rights without one, you may want to investigate the laws of your state before making a decision. If you are pretty sure you want a prenup and your discomfort comes from fear of starting an argument or offending your fiance, then you might take this as an opportunity to practice talking about difficult matters in a loving way. You may even find it helpful to work on communication and negotiation skills with a counselor who specializes in premarital counseling. The same is true if you don't think you want a prenup and you feel that your fiance is pressuring you to make one. This is a good time to practice communicating -- clearly and kindly -- about stressful issues. Whether or not you eventually make a prenup, you're sure to learn more about what you each need and want.

If you scored a three, four, or five on the comfort scale, you are ready to start talking specifics with your fiance. Even so, bear in mind that every good conversation involves some give or take. Don't assume that you and your fiance will see eye-to-eye on everything, especially when you first start talking. Allow plenty of time to talk -- and be willing to get help if you need it.

Copyright © 2006 Nolo