Premarital Agreements in Arizona
Although prenuptial – or premarital agreements, as they are called in Arizona – are not viewed as the most romantic documents in the world, they are an essential business protection tool for business owners contemplating marriage. Carefully drafted and properly executed in accordance with Arizona law, a premarital agreement can save a business owner time and money in the courtroom litigating ownership of business interests in the event of a divorce.
Requirements for a Valid Premarital Agreement in Arizona
To be enforceable, a premarital agreement must satisfy every requirement under Section 25-202 of the Arizona Revised Statutes. These requirements include:
• The agreement must be made in writing and signed by both parties (the agreement does not require consideration)
• Signed voluntarily by both parties
• Each party must make a fair and reasonable disclosure of all personal property and debts
• Neither party can waive in any way his or her right to the other party’s disclosure of all personal property and debts
• A properly executed agreement is unenforceable if it is later discovered that one of the parties did not have, or could not reasonably have had, adequate knowledge of the other party’s property or debts
The Importance of Disclosure In Premarital Agreements
When a premarital agreement has been properly drafted, both sides have made a full disclosure of their assets and debts, and it has been signed, the agreement will override the community property rules of Arizona by preventing one spouse from receiving half of the other spouse’s business in the event of a divorce.
Although making a full disclosure of assets and obligations may seem straightforward, it is a common area of attack in the context of premarital agreements. A spouse who seeks to invalidate a premarital agreement is likely to claim that the opposing spouse did not make a full disclosure of all assets. Alternatively, he or she might claim that the opposing spouse concealed debts. This scenario is especially common when one spouse is a business owner. Thus, business owners who wish to protect their assets through the use of a premarital agreement should strongly consider including a list of their own assets and obligations – along with a list of their spouse’s property and debts – as part of the agreement itself. Additionally, both spouses should sign and date each page of the agreement, along with the lists of assets and debts.
© 2015 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website has been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.