When preparing for a marriage, it may be worth considering drafting a prenuptial agreement with your future spouse. A common misconception is that suggesting a prenup to your partner signals distrust; contrarily, however, creating a prenup could point to how valuable the marriage is to the both of you. It is never a bad idea to have a safety net. In today’s blog, we will discuss what a prenup can do and why you might benefit from drafting one.
What Can a Prenuptial Agreement Do?
A prenuptial agreement, also called a "prenup" or “marital agreement,” is a contract that two prospective spouses sign before marriage to decide how they will handle certain issues like property division and alimony in the case of a divorce. You may want to consider getting a prenuptial agreement if:
- you want to protect your premarital assets (assets you owned before marriage) from being divided in a divorce;
- you want to protect the inheritances of children from previous relationships;
- you want to avoid the future division of your premarital business interests;
- you and your spouse want to decide ahead of time how you will divide your assets in a divorce; or
- you and your spouse want to determine whether one of you will pay alimony in the event of a divorce.
There are also many financial issues that a prenup can cover, including:
- how you will divide each spouse’s premarital assets during divorce;
- how to determine what is marital property and how to divide it if the marriage ends;
- what happens to either spouse’s employee benefit or retirement plans;
- methods for dividing mortgage debt and credit card debt in a divorce;
- whether each spouse will have life insurance, and what happens to the policy in the event of death or divorce;
- each spouse’s right to manage or control any of the couple’s property;
- which state’s law governs the court’s treatment of the agreement;
- whether each spouse must make a will to carry out the terms of the agreement;
- whether one spouse will pay the other alimony, and if so, the amount and duration; and
- any other matter that doesn’t violate the law.
Note that Colorado courts don’t allow prenuptial agreements to dictate child support or child custody. Judges need to decide what’s in each child’s best interest at the time the parents separate to establish a custody order, so they won’t allow a predetermined custody arrangement.
Keep in mind that under the law, prenuptial agreements must be in writing, so oral agreements are invalid. Each spouse must sign the contract, and it becomes effective only after the couple is married.
Enforcing a Prenup in Colorado
Colorado judges will not enforce a prenuptial agreement if the spouse challenging the agreement can prove:
- the spouse challenging the agreement signed the agreement involuntarily or under duress;
- the challenging spouse didn’t have access to legal representation; or
- the challenging spouse didn’t receive proper financial disclosures from the other spouse before signing the agreement.
An instance of someone being under duress could be if the other spouse used physical or psychological harm or threats to force the person to sign the agreement. Note that refusing to marry the other person unless they sign the agreement isn’t enough to constitute duress; spouses must fear for their physical or psychological safety for judges to find that they were under duress.
Proper financial disclosure means that each spouse gives the other reasonably accurate descriptions and estimates of their property, debt, and income. The best way to do this is to prepare a certified personal financial statement and attach it to the agreement for each party.
In Colorado, the law allows spouses to sign the prenuptial agreement without legal representation, but the contract must include a waiver, and judges may take the lack of an attorney into account when deciding whether the agreement is valid or unconscionable. Note that if either spouse would like to amend or revoke a prenuptial agreement, the parties must put the amendment in writing and sign it.
Seek an Attorney for Legal Guidance
If you have questions or concerns about drafting a prenuptial agreement with your partner, consult an attorney for experienced legal guidance. While a lawyer is not necessary to create a prenup, it is advisable to have one on your side to examine the terms of the agreement and ensure they are fair to you. Especially when complicated financial matters are involved, you could benefit from having an experienced lawyer who has handled many marital and prenuptial matters before.
For more information, schedule a free initial consultation with the Law Office of Alexandra White, P.C.