Prenuptial agreements are not just for celebrities. Prenups, or premarital agreements as Colorado law calls them, are often used by Colorado couples as a way to negotiate before marriage the rights to money, income, assets and property as well as the responsibility for debts in case of separation, divorce, death or another chosen event.
Why a prenup?
Here are some of the more common reasons people enter into prenuptial agreements:
- To keep a family business within its family of origin
- To plan the succession of a spouse’s interest in a business or professional practice
- To preserve assets, including money, real estate and heirlooms, for children from previous relationships
- To protect one spouse from becoming liable for sizable debts of the other
- To prevent conflict between children from previous relationships and the second or subsequent spouse over the deceased spouse’s estate
- To predetermine whether and how much property settlement will be paid should the couple split up
- To lessen conflict and costs in a future divorce
- To protect the less wealthy spouse from financial harm
- To give a spouse the right to continue to live in the family home
New Colorado marital agreement law
The Colorado legislature amended state statutes about premarital agreements effective July1, 2014. (Prenups signed before then are controlled by the old laws.) The new law, Colorado’s version of the Uniform Premarital and Marital Agreements Act or UPMAA, governs premarital agreements as well as postmarital or marital agreements, which are those signed during a marriage. The Colorado UPMAA also controls pre- and postunion agreements in cases of civil unions.
Colorado law requires fundamental fairness
Under Colorado law, a prenup must be signed by both parties. The law contains strict requirements relating to the fairness of the agreement and in the way it was executed, to full financial disclosure and to which topics may not be contracted for in the prenuptial agreement. For example:
- A prenup is unenforceable if a party involuntarily consented or signed under duress.
- A prenup may be unenforceable if a party did not have access to his or her own
lawyer,unless it contains an adequate notice of waiver of marital rights.
- A premarital agreement is unenforceable if a party did not obtain “adequate financial disclosure” before signing.
- Certain terms of a prenup controlling spousal maintenance (alimony) or legal fees may be unenforceable if the provisions are unconscionable (shockingly unfair) when enforcement is later sought.
- Certain terms regarding child support or custody, access to legal recourse for domestic violence, modification of a court order for legal separation or divorce, penalties for filing for separation or divorce, or any term that otherwise violates public policy, is either unenforceable or not binding on the court.
Legal advice imperative
Because of the potential for a bad deal in a premarital agreement that could have harmful repercussions later, it is extremely important that anyone whose fiancé or fiancée suggests a prenup seek experienced legal counsel immediately. A lawyer should thoroughly review a proposed agreement and provide relevant advice for negotiating terms, if appropriate.
On the other hand, anyone who is considering proposing an agreement or who is actively discussing one with a soon-to-be spouse should also talk to an attorney about drafting one that complies with Colorado law and carries out the desired wishes of the client. Parties to a premarital agreement should each have independent legal counsel even when they agree on terms and are both in support of the agreement.
This is only a broad introduction to the kinds of legal issues surrounding Colorado premarital agreements. Ask a lawyer any questions you have and for advice about your particular circumstances.