Arkansas Prenuptial Agreement Info
Congrats on getting the diamond in the diamond state! Did you know Arkansas is the only U.S. state to produce diamonds? If you’re marrying in Arkansas, you probably already know this. Maybe you’ve even got your very own plot of diamond land! ‘Tis all the more reason to secure your future with a prenup.
Arkansas Prenuptial Agreements
The Arkansas courts refer to a prenuptial agreement as a “premarital agreement.” An antenuptial agreement, prenuptial agreement, and premarital agreement are synonymous. They all mean a legal contract drafted between two parties before getting married. A marital property agreement is only valid after the marriage takes place. The Arkansas premarital agreement statute and case law outline the rules and requirements for a valid agreement. The terms of an Arkansas premarital agreement may include alimony modifications, property division, retirement accounts, and more. On the other hand, a prenup in Arkansas cannot limit or contract around child support or child custody, or matters violating public policy.
What to include in a valid Arkansas Prenup
For an Arkansas premarital agreement to be considered valid, you should consider the following:
- Must be in writing
- Must be executed voluntarily
- Must be fair and equitable (See more on this in the paragraph below)
- Must be signed by both parties (HelloPrenup recommends initialing each page)
- Full disclosure of assets and income *Do not skimp on this*
- It is highly recommended that each party hires their own attorney
What to exclude from your Arkansas prenup
To ensure that your prenup comports with Arkansas law, make sure not to include…
- Terms involving child support
- Terms involving child custody
- Unconscionable terms
- Provisions that violate public policy
Statutes & terms to understand for a Arkansas Prenup
*Before diving into the deep end, let’s go through some terminology and phrases that will be used in your prenup – that way, you don’t go cross-eyed trying to decipher the legal jargon and miss something.
First comes love, then comes marriage, then comes… divorce?
In 2002, the Supreme Court of Arkansas presided over a pivotal case regarding premarital agreements in Arkansas. A husband and wife married in March 1996, just a few days after executing a prenuptial agreement. He filed for divorce less than a year later. However, in November of ’97, they decided they were still in love, so they would try to make it work. They couldn’t make it work, and they filed for divorced for the second time.
The wife asked the court to throw out the prenup in the divorce proceedings while the husband sought to enforce it. The wife claimed two points about why the prenup was invalid: (1) she did not receive full and fair disclosure of his finances, and (2) the prenup became invalid when the husband filed for divorce the first time.
The court disagreed with the wife on her first point (that she did not receive full and fair disclosure). The court reasoned that she waived her right for disclosure when she signed off on the prenup, which stated:
“I, [wife’s name], do hereby waive the requirement that both parties to the agreement provide to the other and be provided by the other a fair and reasonable disclosure of the property, value of the property, and financial obligations of the other party beyond any disclosure already provided.”
In Arkansas, you can legally waive your right to receive full and fair disclosure. In addition to this explicit waiver, she actually worked as a saleswoman at the husband’s company; therefore, she was generally aware of his business success.
As for the wife’s second point, that their reconciliation revoked the prenup, the court disagreed. Under Arkansas law, to rescind a prenup, there must be a written agreement signed by both parties. No such agreement existed in this case. The court enforced the prenup and thereby agreed with the husband.
What’s the lesson to be learned here? Firstly, if you waive your right to full disclosure of financial assets in Arkansas, you will be held to it. You can’t later ask to fully disclose if you waived your right in the prenup. Secondly, you can only terminate a prenup through another written agreement.
Banks v. Evans, 347 Ark. 383 (2002)
What does unconscionable mean in Arkansas?
“Unconscionable” means the prenup affronts the sense of justice, decency, and reasonableness. This may seem straightforward, but it can sometimes be a topic of contention. Most states, including Arkansas, will throw out unconscionable prenuptial agreements.
When determining if an agreement is unconscionable, Arkansas judges will look at the totality of the circumstances surrounding the negotiation and execution of the prenup. They will also examine whether there is one-sided power between the two spouses and whether the disadvantaged spouse was made aware of the unconscionable provision.
A 1970’s case heard by the Supreme Court of Arkansas demonstrates what an unconscionable prenup looks like. Husband and Wife were married, but Husband insisted on a prenup the day before the wedding. The prenup provided her with payments instead of claims against his property. For example, if the separation occurred in the first year, she would receive $25,000. If separation happened in the second year, she was to receive $50,000, and so on, so forth.
One day, to the shock of his wife, Husband decided he wanted a divorce out of the blue (in reality, he wanted to invalidate the prenup by getting a divorce). They got divorced, then remarried. Again, his only purpose of divorce was to nullify the prenup.
This prenup was found to be unconscionable considering all the circumstances:
- Husband had extensive assets in comparison to Wife (he was worth over $400,000)
- Wife was not aware of the full extent of Husband’s assets
- Wife lost out on earning potential when she married Husband (she gave up specific jobs to marry him)
- Wife did not know the extent of the rights she was losing out on in the prenup
- Husband’s sole reason for obtaining a divorce was to invalidate the prenup
All factors considered, this prenup is clearly riddled with the flavors of fraud, unfairness, and deceit. That is why the courts decided it was enough to be declared unconscionable, and therefore void.
Arnold v. Arnold, 553 S.W.2d 251 (1977)
Official term for Divorce in Arkansas
A divorce occurs when two people, who have been legally married, begin the court process to end the marriage. Arkansas is considered one of the few “fault” divorce states. This means that you can file for divorce on the grounds that one spouse “did something wrong.” However, if none of the grounds apply, you can claim “no-fault” based on separation. This means you and your spouse must live separately for 18 months to show the court you have a basis for divorce in Arkansas.
The following reasons are all the various grounds for divorce in Arkansas based on Section 9-12-301 of the Arkansas Code:
- Either spouse is impotent
- Either spouse is a felon
- Either spouse abuses alcohol for at least one year
- Either spouse commits cruel treatment to the other
- Either spouse exhibits behavior resulting in humiliation, embarrassment, or shame to the other
- Either spouse commits adultery
- Either spouse is found to be incurably insane
- Either spouse does not support the other when they are legally required to
- Spouses have lived separately for a consecutive 18 months
How to end a marriage in Arkansas
Only one party needs to begin the process of ending a marriage (but don’t get us wrong, it takes two to make it work!) If one party wants to end the marriage, it is within their sole right to do so, and the other non-participating party does not have to agree in order to begin the process. If a non-participating spouse does not partake in the proceedings, a default judgment will be entered and force the divorce to proceed.
There are two ways to end a marriage in Arkansas: annulment or divorce. You may also obtain a legal separation, but a legal separation does not technically end a marriage. Annulment, legal separation, and divorce all allow you to receive court orders deciding child custody, parenting time, child support, alimony, and more.
Each state has residency requirements that must be fulfilled before you can divorce in that state. In Arkansas, these are the residency requirements:
- Either spouse must live in Arkansas for at least 60 days before filing for divorce.
Official term for property not considered part of the marital estate
Separate property means property that does not get divided in the divorce. On the other hand, shared or marital property does get divided in divorce. In Arkansas, the property is separate if owned before the marriage or given during the marriage by gift or inheritance. Separate property can also include earnings on the separate property or things purchased with separate property (i.e., you buy a car with your inheritance). If this is not to your liking, you’ll need to specify it clearly in a legal document otherwise, such as a prenuptial or postnuptial agreement.
An important lesson on prenups and separate property
Sandra and William were married for 23 years. Way back in ’93, before getting married, they executed a prenup that listed all of each spouse’s separate property. William’s separate property included a pension and an IRA account (among other things). Sandra filed for divorce in 2016 and requested that their assets be equitably distributed. In Arkansas, the property is not just divided 50/50. Instead, it is equitably distributed by weighing various factors to determine who gets what. Also, separate property means property that is not subject to distribution.
William argued that he keeps the pension and IRA account separate because the prenup said so. Sandra counter-argued that the accumulations to the pension and IRA accounts were not previously owned before the marriage. In other words, the pensions and the IRA accounts grew a lot in the 23 years of marriage, and he did not own all that money before they were married when the prenup was executed.
The court disagreed with Sandra. The court said that even though the retirement accounts increased in value, it does not mean that they were transmuted into shareable property. The prenup speaks the truth: what was listed as separate property remained separate, despite increasing value.
Franks v. Franks, 548 S.W.3d 871 (Ark. App. 2018)
Official term for spousal support in Arkansas: Alimony
Spousal support, maintenance, and alimony all mean the same thing: financial support ordered by the court to be paid by one spouse to the other. In Arkansas, spousal support is referred to as alimony. If you don’t like the sound of alimony, you may include provisions in your prenup modifying or eliminating alimony.
An Arkansas may grant alimony depending on the circumstances of your case. The primary factor it will consider is the financial need of one spouse and the other’s ability to pay it. Other factors the court will consider include the financial circumstances of both spouses, the spouses’ standard of living, the value of jointly owned property, both spouses’ current and future income, each spouse’s earning capacity, each party’s health, and more.
A prenuptial agreement, also known as a premarital agreement, functions as a contract between two individuals who...
A prenuptial agreement, also known as a prenup, is a legally binding contract created by two individuals who are...
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