Pre-Nuptial Agreements – Just In Case It’s Divorce That Does Us Part

April 28, 2005 in Contracts

Pre-Nuptial Agreements are being signed by more and more couples. They are not limited to couples dealing with financial inequality, or couples that have a lot of wealth. With half or more of all ending in divorce, Pre-Nuptial Agreements have become widely accepted as smart financial planning tools.

What is a Pre-Nuptial Agreement?

It may not be romantic to think about this way, but marriage essentially is a legal contract between two people. With regard to your property, the provisions of your marriage contract are governed by the laws of the state in which you live — and these laws determine how assets will be divided in case you divorce (or die) — unless you and your spouse decide you want to write your own marriage contract instead. That is where a Pre-Nuptial Agreement comes into play.

As its name implies, a Pre-Nuptial Agreement is an agreement between the couple who are contemplating marriage as to (i) what property is separate, pre-martial property, (ii) the character of property acquired during the course of the marriage, (iii) the division of property and marital obligations and such matters as spousal maintenance in the event of separation or divorce, and (iv) the handling of financial aspects of the marriage, such as payment of living expenses and preparation of income tax returns. A Pre-Nuptial Agreement can promote the well-being of the marriage, as it reduces the uncertainty each spouse may feel about financial matters.

Who should have a Pre-Nuptial Agreement?

“Pre-nups” have gained in popularity in recent years. Why? Until the 1960s, most couples married young with visions of building a life together from the bottom up. Typically, neither party brought much property to the union. Today, young Americans wait longer to marry, often after accumulating financial worth. Also, the rising divorce rate translates into more second marriages, which often involve children from previous marriages. Consequently, more people contemplating marriage have reason to be careful, in case things don’t work out.

Consider the following to determine whether a Pre-Nuptial Agreement may be for you:

  1. Do you have children from a previous marriage for whom you’d like to provide?
  2. Are you responsible for other family members, such as elderly parents or a disabled sibling?
  3. Are you the owner of or partner in a business? (In the event the marriage terminates, your spouse may have a claim to part of the business.)
  4. Will you inherit assets from your family that you would prefer to have remain in the family (not shared with the spouse) in the event of your divorce or death?
  5. Will one of you bring substantially more assets to the marriage?
  6. Will your spouse be giving up her career or acting primarily as support for you in your career or business as part of the marriage, and if so, what will be his or her compensation for doing so if the marriage ends?
  7. Do you or your fiancée have debts for which you wouldn’t like the other to be responsible?
  8. Will you or your spouse be supporting the other through college or schooling likely to lead to a lucrative line of work?
  9. Do you foresee a large increase in future income?

What does a Pre-Nuptial Agreement do?

A Pre-Nuptial Agreement in Arizona accomplish three basic things:

  1. It defines what constitutes separate property and what constitutes community property.
  2. It defines what constitutes separate debt and what constitutes community debt.
  3. It allows a couple to set terms for spousal support.

How is a Pre-Nuptial Agreement prepared?

The process for creating a Pre-Nuptial Agreement is fairly simple. You and your potential spouse decide what works for you and what stays with whom in the event your marriage doesn’t work out. The deal you strike will generally be respected by the law, but remember, this is a legal contract to which American contract law applies, and a divorce court can and will overturn you private agreement if it finds that:

  1. The agreement is likely to promote divorce — that is, it gives one or both parties a monetary incentive to leave;
  2. The agreement was written with the intention of divorce;
  3. One of the parties was coerced into signing the agreement; or
  4. The disclosure by one party was inadequate.

Perhaps the most important ingredient of a solid Pre-Nuptial Agreement is honesty. Both parties must FULLY disclose their assets. If it turns out either person has hidden something, whether or not intentionally, a judge can toss out the contract.

A Pre-Nuptial Agreement should be signed well in advance of the wedding. This avoids the appearance of coercion, which will cause an agreement to be invalid.

It’s best to do things formally. Without a formal contract, you could end up like director Steven Spielberg. Mr. Spielberg’s ex-wife got half of what he earned during their four-year marriage because their pre-nuptial agreement was scribbled on a napkin and she wasn’t represented by a lawyer. This “informality” cost Mr. Spielberg $100 million.

Things to Remember:

If you are considering a Pre-Nuptial Agreement, it is important to remember three things:

  1. Discuss the agreement early in the relationship. Don’t wait to say “pre-nup” until right before you say, “I do.”
  2. Be honest. Don’t try to hide your thoughts, feelings or assets.
  3. Hire separate attorneys so you both have good representation.

Couples should review their Pre-Nuptial Agreements every few years. Pre-Nuptial Agreements are written defensively, so after a certain number of years of wedded bliss, some of their provisions should be revisited.


Time have changed. Pre-Nuptial Agreements have a place in many marriages, especially second marriages. If you think you may need a Pre-Nuptial Agreement, don’t be afraid to raise the subject. A well conceived Pre-Nuptial Agreement won’t destroy a marriage – it will help protect it.

This article contains only general information and is not to be relied on as legal advice. For advice on your individual situation, consult a lawyer in your jurisdiction. No attorney/client relationship arises from use of this article.