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As part of the pre-wedding planning process, some couples also plan on drawing up their own prenuptial agreement without getting attorneys involved. They’ll write it up, sign it, and put it away in the hopes they’ll never have to use it. For the couples that divorce later, though, one or both parties may be shocked to find out that it is not enforceable and a court won’t honor it, simply because they didn’t provide “financial disclosures” to each other.
In Colorado, a pre-nuptial or post-nuptial agreement will be enforced as long as it was voluntarily entered into and the parties provided fair and reasonable financial disclosures to the other person. An agreement can be one-sided in terms of property distribution, yet it will still be enforceable as long as the two above requirements are met. Financial disclosures are a necessary requirement because each party needs to know what exactly it is they’re giving up claims to. It’s sort of like buying a car or a house – you wouldn’t say yes unless you knew what the sale price was.
What exactly is meant by “fair and reasonable financial disclosures?” For those of you who have been through the divorce process, the financial disclosures needed in a pre-nuptial agreement are far less involved. Generally, it is sufficient to merely list all assets and debts on a schedule which is attached to the agreement. Unless someone insists on appraisals, it’s enough to give a reasonable and good faith estimate about how much certain items are worth if their exact value is not readily known.
It’s also not necessary to have a formal disclosure process, where each party turns over to the other bank statements, tax returns, property records, etc. Each party should have the opportunity to ask for and review these types of documents if they wish. If they decide to pass up this opportunity, though, the values stated by the other party will stand, unless fraud or something similar was involved. A good pre-nuptial agreement will incorporate several statements about the disclosure process in addition to the attached financial schedules.
Although it may seem more cost effective to prepare your own pre-nuptial agreement, you may find yourself with an unenforceable agreement if it wasn’t properly drafted. At the very least, you should have it reviewed by an attorney for their opinion as to whether it will stand up in court later if necessary.
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