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Pre-nuptial Agreements

Pre-nuptial Agreements

Pre-nuptial agreements ("pre-nups") are contractual agreements entered into between a man and a woman prior to their marriage wherein they spell out certain agreements that they have concerning how their property will be treated in the event of divorce. The pre-nup is a contract, and as such, it is governed and interpreted in accordance with state law. Every state has its own laws concerning pre-nups and what its laws require of the parties and what its laws permit in the terms of the pre-nup in order for the pre-nup to be legally enforceable.

Pre-nups basically focus on three things: (1) property owned by the parties before marriage, (2) property acquired during marriage, and (3) future payments (if any) from one party to the other following a divorce (e.g., alimony). Please note that in most states any provision in a pre-nup that attempts to eliminate or reduce child support payments are void and will not be enforced by a court. In some states, such a provision attempting to limit child support is so violative of public policy that the court will void the entire pre-nup, not just the offending child- support provisions. This does not mean that the pre-nup cannot obligate one party to pay additional child support that is beyond any amounts otherwise provided by state law, although this is rarely done.

Typical state law requirements: Typically, a pre-nup is offered by the wealthy party to the less wealthy party. Because of this fact, state laws try to ensure that the pre-nup is fair and that the poor party fully understands the agreement and the legal and financial consequences of the agreement. Generally speaking, most states require that in order for the pre-nup to be valid, several factors must be present, such as:

In the final analysis, a pre-nup (even a good one drafted by a terrific attorney) is a contract that will be subject to the decisions of a divorce court judge and subject to any changes in state law that may occur between the time the agreement was signed and when the agreement may become an issue in a divorce proceeding. Sometimes, this fact is not favorable to you.

Any agreement that is going to dictate how much one party will pay to the other in the form of alimony or other types of support needs to be done as a pre-nuptial agreement drafted by a good family law attorney familiar with the law that will govern the agreement (presumably, in the state where you entered into the agreement and wherein you will reside following the wedding). Offshore trusts do not control or eliminate any future court orders relating to your obligations to pay future alimony! Only a valid pre-nup will have the ability to reduce any court-ordered alimony. For this reason, if you live in a state where a court could (would) order you to pay alimony out of your future income, then please consider obtaining a pre-nup drafted by a family law attorney. For those readers in Texas, you probably already know that it is quite difficult for any former spouse to be awarded alimony (marriage must have lasted for more than 10 years and the person seeking alimony must basically be unable to support her/himself by working, etc.). Texans also know that they cannot have any wage garnishments for alimony or other civil judgments (except for child support and any federal debts, e.g., taxes owed to the IRS). Still, situations arise even in Texas where a pre-nup is advisable. Residents in other states should consult with an attorney if they are concerned about the possibility of being ordered to pay alimony and what actions their state allows the ex-spouse to take against them if they get behind in their alimony payments (i.e., can the judge hold you in jail for contempt of court if you have the ability to pay alimony but refuse to do so).

As far as protecting your pre-marital financial assets, you can try to achieve some favorable results by using a pre- nup; however, there is no way you can be absolutely certain that the agreement will hold up in court or otherwise be enforced if you are faced with divorce litigation. When a lady who speaks English as a second language signs a pre-nuptial agreement written in English, you can expect her divorce attorney to claim the pre- nup is invalid because she did not fully understand the agreement and its legal consequences due to her lack of English fluency. Did she have an attorney fluent in her native language explain it to her before she signed the agreement? Was the agreement translated into her native language and given to her to review before she signed it? If so, was the translation performed by someone certified and recognized by the court (usually translated via an embassy or the like)? If your divorce court judge is looking for an excuse to help her find a way out of the agreement, there you have it. While not the most terribly romantic issue to discuss, pre-nups are not all bad. They are just not 100% effective at protecting your pre-marital assets in the event of divorce. Pre-nups often just become yet another disputed issue in a divorce proceeding with enough contention in it already. This means that you will have the honor of paying additional attorney's fees to litigate the issues pertaining to the pre-nup in order for the court to determine if the pre-nup will be enforced. While a pre-nup may help (especially with regard to the issue of future alimony), it cannot guarantee that all of your assets will always be there for you and your lifestyle. There is only one way to be 100% certain that your assets will be protected in the event of divorce (or other type of lawsuit) and that is with an offshore trust. You earned it and it's yours - so keep it. Keep it offshore!

Please contact us for a free no-obligation phone consultation with a qualified trust attorney.

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