The do’s and don’ts of prenups in Arkansas
Prenuptial agreements can help ensure separate assets are protected in the event of a divorce.
Prenuptial agreements are defined under Arkansas state law as:
[A]n agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.
These agreements are legal tools that help protect the assets of each individual during marriage. These documents do not hinder a marriage, but instead can remove some of the stress of combining assets. In order to be valid, prenuptial agreements require each individual to fully disclose all assets and debts. In fact, state law specifically requires a “fair and reasonable disclosure of the property or financial obligations of the other party” for the agreement to be valid. After disclosed, the couple can discuss how the assets should be classified.
When moving forward with this discussion, the following do’s and don’ts can help:
Do’s of prenuptial agreements
- Business interests. Prenuptial agreements are especially important if either individual has business interests or a professional practice. Without a prenup a spouse may gain an interest in the business during the marriage. This agreement can help protect the owning spouse’s interest and shelter the business in the event of a divorce.
- Second marriage. These legal tools are also useful for second marriages, particularly if children are present. The prenuptial agreement can achieve two goals; ensuring assets are distributed to children from the previous marriage as well as specifying which assets should be distributed to the current spouse in the event of a divorce or death.
- Legal assistance. A recent article in Forbes discusses the importance of legal counsel when drafting a prenuptial agreement. The piece recommends the use of a lawyer over “Do-It-Yourself” sites to help ensure the document is valid and follows state law.
Don’ts of prenuptial agreements
- Trust the Internet. As noted above, do not trust “Do-It-Yourself” prenuptial sites. The low price tag may make the process tempting, but you get what you pay for. It is important to craft a document that meets state requirements and your unique interests, not a fill in the blank form.
- Mix assets. It is important not to mix assets that are designated as individual property in the prenuptial agreement with marital property. Use separate bank accounts, do not use marital funds to pay off nonmarital debts and vice versa. The nonmarital designation may be lost if these assets are mixed.
- Wait too long. Presenting a prenuptial agreement just before the wedding is never a good idea. In addition to the danger of surprising a future spouse, the document may also be overturned if challenged. If a prenup is challenged, courts will review the mental state of each individual when determining the validity of the agreement. If either individual is found to be under duress or emotional stress to sign the document, it will likely fail.
These are just a few of the more common reasons to put together a prenuptial agreement. Those who are considering the use of a prenup are wise to seek the counsel of an experienced prenuptial agreement lawyer. This legal professional will help to better ensure that the document not only meets legal requirements, but also meets your needs.