Premarital Agreements

Premarital Agreements, also known as Prenuptial Agreements, are written agreements entered into by a couple prior to the date of marriage. The typical reasons for seeking a prenuptial agreement include the following:

(1) To minimize litigation in the event of a divorce, legal separation, or annulment; (2) To preserve the estate for your children from a prior relationship; (3) To minimize support obligations; (4) To protect sole and separate property in the event of death or termination of the marriage; (5) To minimize exposure to debt; and (6) To set out rules for acquiring and disposing of property.

A premarital agreement must be in writing and signed by both parties, but it is not necessary for the agreement to be notarized. In order for a premarital agreement to affect the rights of third parties, such as creditors, it must be recorded in the same manner and form that is required for deeds and conveyances.

Arizona has adopted the Uniform Pre-marital Agreement Act (UPAA), which is set forth below.

A.R.S. Section 25-201. Definitions

In this article, unless the context otherwise requires:

1. "Premarital agreement" means an agreement between prospective spouses that is made in contemplation of marriage and that is effective on marriage.

2. "Property" means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings.

A.R.S. Section 25-202. Enforcement of premarital agreements; exception

A. A premarital agreement must be in writing and signed by both parties. The agreement is enforceable without consideration.

B. The agreement becomes effective on marriage of the parties.

C. The agreement is not enforceable if the person against whom enforcement is sought proves either of the following:

1. The person did not execute the agreement voluntarily.

2. The agreement was unconscionable when it was executed and before execution of the agreement that person:

(a) Was not provided a fair and reasonable disclosure of the property or financial obligations of the other party.

(b) Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided.

(c) Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.

D. If a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the agreement to be eligible for support under a program of public assistance at the time of separation or marital dissolution, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid that eligibility.

E. An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law.

F. If a marriage is determined to be void, an agreement that would otherwise have been a premarital agreement is enforceable only to the extent necessary to avoid an inequitable result.

A.R.S. Section 25-203. Scope of agreement

A. Parties to a premarital agreement may contract with respect to:

1. The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located.

2. The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign or create a security interest in, mortgage, encumber, dispose of or otherwise manage and control property.

3. The disposition of property on separation, marital dissolution, death or the occurrence or nonoccurrence of any other event.

4. The modification or elimination of spousal support.

5. The making of a will, trust or other arrangement to carry out the provisions of the agreement.

6. The ownership rights in and disposition of the death benefit from a life insurance policy.

7. The choice of law governing the construction of the agreement.

8. Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.

B. The right of a child to support may not be adversely affected by a premarital agreement.

A.R.S. Section 25-204. Amendment or revocation of agreement

After marriage, a premarital agreement may be amended or revoked only by a written agreement signed by the parties. The amended agreement or the revocation is enforceable without consideration.

A.R.S. Section 25-205. Limitation of actions

A statute of limitations applicable to an action asserting a claim for relief under a premarital agreement is tolled during the marriage of the parties to the agreement. However, equitable defenses limiting the time for enforcement, including laches and estoppel, are available to either party.

Some key components of a premarital agreement are that the agreement should make a full disclosure of each party’s assets and debts and, additionally, should waive any right to further disclosure; it should include a description of the rights the parties are giving up by signing the agreement; the agreement should contain substantive terms consistent with A.R.S. § 25-203(A); it should contain a provision that each party will on demand execute ancillary documents to effectuate the agreement; and if the parties are entering into a covenant marriage the agreement should provide for that.

In the event a prenuptial agreement is challenged in court, its enforceability and interpretation will be decided by a judge that the parties will not be able to select. While no lawyer can ever guarantee that any particular prenuptial agreement will be upheld in court, the attorneys at Fruchtman, Wilenchik & Larson do have experience in both drafting and reviewing premarital agreements for compliance with the UPAA.

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