Arizona Certified Family Law Specialist Discusses How To Avoid Having A Prenuptial agreement Later Set Aside
As an Arizona State Bar Certified Specialist in family law matters in Arizona, I have been involved in many cases in which one attorney or the other is seeking to set aside a prenuptial agreement entered into by the parties prior to the marriage. I have successfully challenged and set aside prenuptial agreements, resulting in more favorable outcomes to my clients. Every time I succeed in setting aside someone else’s prenuptial agreement, I go back to my own process and my own wording to see how we can maximize the chances that prenuptial agreements drawn up for my clients are enforced by the judge if and when needed.
While I have had prenuptial agreements that I have prepared for clients challenged, so far I have not had any of my drafted prenuptial agreements set-aside by a judge. There can be no guarantees in litigation and no lawyer can guarantee that a prenuptial agreement will absolutely be upheld in the future as laws can change, judges are human and occasionally err, and no attorney has a functioning crystal ball. However, there are certain steps that you can take with your attorney to maximize the chances of success in upholding a prenuptial agreement if it is later challenged.
Most prenuptial agreements are set aside because the agreement lacked the necessary formalities.
For example, under Arizona law a prenuptial agreement must (at a minimum) be signed by both parties. It would be better to have it notarized, so neither party can later claim that the signature was not their own signature. Best practices are discussed below.
Arizona law identifies a prenuptial agreement as “an agreement between prospective spouses that is made in contemplation of marriage and that is effective on marriage.” Accordingly, the prenuptial agreement must be signed prior to the marriage (putting the pre in prenuptial agreement). If the parties are already married, there may be other options for which you should speak with an attorney, including a post-nuptial agreement or legal/financial separation.
As an example, imagine a young bride getting ready to be married in Phoenix, Arizona. The cake is outside melting, Grandma has flown in from back east, and everything is set for a perfect wedding. Groom shows up with a 20 page prenuptial agreement, which Bride has never seen. The parties have never even discussed signing a prenuptial agreement. Groom determinedly announces that Bride must sign the agreement or he must call off the wedding. Bride bursts into tears, and then shortly thereafter signs the agreement. Bride has not had the chance to read through the lengthy document, has not had the chance to discuss this with an attorney, and in fact is not in a proper frame of mind (with the wedding starting in a few minutes) to dedicate much thought to the entire process. Years later, Wife challenges the validity of the prenuptial agreement. In an actual case in Arizona with similar facts, the trial judge agreed with Wife and set aside the prenuptial agreement. Most people would agree that setting aside this prenuptial agreement under such circumstances was the fair outcome.
As a certified specialist in family law, these cases cause me to think of ways that Groom could have approached this differently so that his prenuptial agreement could have been upheld. While in the above scenario most of us feel sorry for the Bride, think about the Groom for a moment who may have had good intentions (and bad legal advice) and is now going through a very nasty divorce without the protection of a properly drafted prenuptial agreement. Bride is also the loser, as she is now paying much more for a hotly contested divorce, whereas with a properly worded prenuptial agreement the divorce could have been much more simple, been completed much more quickly, and cost much less in attorney fees. Improperly prepared prenuptial agreements can cause financial and emotional damage to both spouses.
Both Parties To A Prenuptial Agreement Should Have Attorneys
While not required, prenuptial agreements should also be signed-off by an attorney on each side. Bluntly a groom would be the primary person benefitting from bride having an attorney, and visa-versa. I strongly recommend my clients involved in prenuptial agreements have an attorney on both sides, so that the other party cannot later claim to have not understood what he or she signed.
Arizona does not require that each party have an attorney, but the simple act of having an attorney on both sides eliminates many arguments down the road, including claims that “I did not understand what I was signing.”
Also, it is more difficult for a spouse seeking to set aside a prenuptial agreement to claim that he or she was forced into signing the document, or that the document was presented to them at the last minute, when they have taken the time to schedule a meeting with an attorney, and have been represented by the attorney through the signing of the agreement.
PRENUPTIAL AGREEMENTS should BE SIGNED SEVERAL WEEKS BEFORE THE WEDDING DATE where possible
There is no legal requirement that a prenuptial agreement be signed X days before the wedding, though it is generally a good idea to have the prenuptial agreement signed several weeks before the wedding date.
The prenuptial agreement does not take legal effect until the wedding occurs. Accordingly, signing too soon is rarely the problem unless the signing occurred over a year before the wedding date. But having the signing on the day of the wedding could lead to claims that one party was forced into signing, or had improper opportunity to review the document thoroughly.
While I have in certain cases been hired at the last minute and we have prepared prenuptial agreements just days before the wedding, doing so requires additional steps to minimize the opportunity for either party to later claim that they were forced or rushed into signing the agreement.
When the signing for my clients occur very close to the wedding date, I like to make sure that we preserve evidence to support that both parties had plenty of time to review the prenuptial agreement, that both parties understand that the wedding could be delayed if they need more time to review the agreement, and that even if they had more time, they would not need to make any further review in order to feel comfortable with the agreement being signed.
PRENUPTIAL AGREEMENTS SHOULD NOT BE SIGNED WHEN A PERSON IS NOT OF SOUND MIND, IS INTOXICATED OR HEAVILY MEDICATED, OR IS OTHERWISE INCOMPETENT TO ENTER A CONTRACT
While it may seem obvious that asking a highly intoxicated or heavily medicated person to sign a contract including a prenuptial agreement may not be a good idea, the difficulty on prenuptial agreements is that often it is years down the road when one party first decides that they want to challenge the enforceability of a prenuptial agreement.
When one spouse twenty years down the road claims that he or she was drunk, high, on legal medication with significant impact upon understanding, or otherwise incompetent to enter into a contract, how can the other person prove the negative, or prove that they were not incompetent to sign.
Good lawyers will work to find ways to preserve evidence now, in case later needed, which evidence shows that both parties were in fact legally competent to enter into the prenuptial agreement.
BEST PRACTICES FOR PRENUPTIAL AGREEMENTS INCLUDE HAVING A FORMAL SIGNING CEREMONY WITH A COURT REPORTER PRESENT
While there may be other options, best practices for maximizing the chance of having a prenuptial agreement upheld if later challenged includes having a stenographer (court reporter) present at the signing ceremony at which time both parties and both attorneys are present. At this signing ceremony, both parties can be asked many questions by one or both attorneys. The court reporter makes a stenographic record of the proceedings, and a transcript of the questions and answers are thereby preserved for the future.
For my clients who take my advice to have this formal signing ceremony, the transcript of the signing ceremony is nearly as important as the prenuptial agreement itself (and should also be kept in a safe place along with other important paperwork).
If later on one party claims to have been forced or coerced into signing the agreement, to have been mentally incompetent, to have had insufficient time to review, to not have understood, these issues are often classical he-said/she-said situations and a Judge is hearing evidence in which one spouse is claiming that the agreement should be set aside, and the other spouse is claiming that the agreement should be upheld. Both parties have motive to lie (or stretch the truth – or to experience convenient memory or the rewriting of history) and so the judge will likely be skeptical of both parties’ testimony.
But having the transcript from the court reporter made at the signing ceremony breaks the he-said/she-said circle, as instead you have Spouse A now testifying years after the fact that (for example) she did not have adequate time to review the prenuptial agreement with his/her attorney, but you also have Spouse A’s preserved testimony from the date of the signing when Spouse A clearly testified that he/she did in fact have adequate time to review the prenuptial agreement with his/her attorney. Instead of he-said/she-said, the Court is looking at Spouse A testified on the date of the signing when his/her memory was the freshest that . . ., verses Spouse A now years later when it is clearly to his/her advantage to lie is now claiming . . . . While there can be no guarantees in litigation and perhaps a Judge could determine this in an unexpected way, but is seems clear that most judges most of the time would find the contemporaneous testimony of the spouse at the signing ceremony to be the most valid testimony. This in turn leads to a much greater likelihood that the challenged prenuptial agreement will be upheld by the judge.
THE PRENUPTIAL AGREEMENT should HAVE A CLEAR ITEMIZATION OF BRIDE’S AND GROOM’S ASSETS AND DEBTS AS OF THE TIME OF THE SIGNING
I have been involved in cases in which we have successfully set aside a prenuptial agreement by proving that Husband had withheld information about his assets at the time of the signing of the prenuptial agreement. By proving that Husband’s assets were significantly more valuable than he reported on the prenuptial agreement, the Judge set aside the prenuptial agreement finding that Wife (Bride at the time) may not have agreed to the terms had she been provided sufficient information.
Accordingly, both parties should provide accurate detail regarding all major assets and debts. While every fork in the drawer need not be inventoried, all real estate, vehicles, investment and bank accounts, retirement accounts, and other major assets should be listed.
Additionally, listing out assets benefits the party with the assets as it provides contemporaneous evidence of what that spouse owned prior to the marriage, which is then preserved as that spouse’s sole and separate property, and makes it much easier if the other spouse later claims that such and such asset was a joint asset between the parties.
If you or your friends or family members are engaged or close to getting engaged, and if you have determined that you need experienced legal representation, please call 480 733-6800 and ask to speak with Douglas C. Gardner, or visit our website at www.yourarizonadivorcelawyer.com.