In recent posts, we've been speaking quite a bit about prenuptial agreements, particularly about their usefulness in divorce, provided they are wisely negotiated and properly executed. To understand the usefulness of prenuptial agreements in divorce, it is helpful to have a basic understanding of the default rules for property division in the state of Arizona, since these are the rules that apply in the absence of an agreement to the contrary.
Generally speaking, there are two approaches states take to property division. One is called equitable distribution, which involves a fair division of property and debts deemed to be marital. The other approach-which Arizona uses-is community property, an approach which generally involves equal distribution of marital assets and debts. That being said, Arizona is a bit different than other community property states in that courts are supposed to divide marital assets equitably.
Marital or community property is presumed to be any property acquired during the marriage, though there are exceptions. These include: property acquired by inheritance or after notice of the initiation of divorce, separation or annulment has been served. When it comes to debts, the separate property of each party is not threatened by the separate debts of the other party, though a party's separate property can be threatened by community debts.
This, of course, is just a thumbnail sketch of a couple of the default rules in divorce. Much more information is available through research of state statutes. The best way to get accurate information, though, is to work with an experienced attorney who is up-to-date on any changes in the law.
The fantastic thing about good prenuptial agreements is that they bypass these default rules and allow couples to take more control of the circumstance of their divorce.
Source: azleg.gov, "Title 25-Marital and Domestic Relations," Accessed October 29, 2014.