Prenuptial agreements (also called antenuptial agreements or “prenups”) don’t sound very romantic. But they can make a lot of sense to have, especially for people who may have been married before.
What is a Prenup?
Prenuptial agreements are contracts made between two people before they get married (pre (before)-the-nuptials). These are private contracts made between two people and they generally concern things about their marriage; including the financial aspects of it. In Arizona, where we practice, prenups are enforceable as long as their terms do not violate good morals or the law and do not encourage divorce.
Prenuptial Agreements and Estate Planning.
Arizona is one of several states (there are nine in all: Wisconsin, Idaho, Texas, New Mexico, Louisiana, Arizona, Washington, Nevada and California) that are community property states. What this means is that property acquired during marriage is considered to belong to the “community” (the marriage). When a couple in a community property state gets divorced, the community property is divided equally between them. “Separate property” of one spouse (acquired before the marriage or thru inheritance, gift or devise during the marriage) remains that person’s separate property at the time of divorce.
When it comes to estate planning, community property states are unique in how they handle property on the death of one spouse. In a community property state like Arizona, you can only give away your separate property and half your marital property when you die. That means that if you make a will or trust leaving more than 50% of your marital property to someone when you die, the court will not honor your wishes. It will not allow the transfer of more than your 50%. And, in every state except Georgia, you cannot disinherit your spouse.
Prenups Change the Marital Inheritance Game.
What prenuptial agreements do, is allow couples to change the inheritance rules. If, for example, you have children from a prior marriage, and your new spouse has his/her own assets and does not need yours, you can agree in a prenuptial agreement that all of your property will go to your children and your spouse will get nothing. Or, if you are part of family business that you were involved with long before you ever met your spouse, you can direct that your share of the family business goes to your children at your death and not to your spouse.
Prenups are Powerful and Enforceable.
It bears repeating that valid prenuptial agreements change the inheritance and community property laws. They are both powerful and enforceable estate planning tools. Prenuptial agreements override both community property and elective share law.
Which is why you should always consult with competent counsel if you are considering a prenup or are thinking of signing one.
If you are considering remarriage, it is very important that your estate planning documents are carefully drafted by knowledgeable trusts and estates counsel.
Work with a Trusts and Estates Attorney.
In our practice, we frequently work with blended families. We will sit down with you and go over all your concerns and answer all your questions. We offer FREE consultations. We have offices in Sedona, Arizona but we serve Verde Valley and all of Arizona. Simply call us at 928-282-1483 or contact us here.