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Preparing for the Worst: Prenuptial Agreements

Prenuptial agreements, which used to be quite rare, were once topics of sensational Hollywood stories about celebrities and their divorces. However, with stress and antagonism that can be created by today’s divorce process, prenuptial agreements have become increasingly common. Having an agreement in writing can streamline the court case if divorce becomes unavoidable. Additionally, prenuptial agreements can provide reassurance for those who enter into marriage with substantial assets. A spouse who is marrying someone with considerable debt would also benefit from a prenuptial agreement.

Prenuptial agreements are also referred to as marital agreements under Colorado law. Prenuptial agreements occur before the marriage ceremony takes place. Marital agreements also include postnuptial agreements, which are agreements entered into after the marriage ceremony, but before divorce.

Marital agreements can cover a variety of topics, and the parties can agree as to what property will remain separate and/or how it will be divided if the parties divorce. The agreement can cover just one asset or debt, or it can cover everything. If the parties have reached an agreement that upon divorce, no spousal support (legally known as maintenance) will be paid, they can put that in the agreement as well.

The parties may also desire to memorialize agreements regarding children such as parenting time, child support, parental responsibilities, and decision-making. Depending on the nature of the agreements, however, a court may rule that the agreement is not valid. Agreements regarding care and welfare of children will be closely scrutinized. A judge will always ensure that the marital agreement provisions are in the best interests of the child at the time of the divorce, even though the parties may have a differing agreement.

There are several requirements of a marital agreement to be valid. First, both parties must voluntarily enter into the agreement. A variety of factors are considered, including whether one of the spouses “sprung” the agreement on the other the night before the wedding, if each party had ample opportunity to consult with an attorney before signing, and if threats forced one of the parties to sign the document.

Another marital agreement requirement is that each spouse must provide full disclosure about all his or her individual assets and debts. This includes detailing what assets each spouse has, and the value of each item. As long as full disclosure has been made, the court will enforce the property division provisions even if they seem unfair at the time of the divorce. However, any agreement regarding maintenance will be reviewed by the judge to ensure that it is fair and reasonable at the time of the divorce, regardless of compliance with full disclosure requirements.

If a marital agreement is entered into shortly before a divorce proceeding is initiated, it may actually be considered to be a separation agreement, which is a settlement agreement reached by parties in a divorce. This is an important distinction, because separation agreements are reviewed differently than marital agreements. While marital agreements are enforceable if they were executed voluntarily and full disclosure was made, a court will only approve separation agreements if the provisions are equitable to both parties.

Another formality requirement is that the agreement must be in writing and signed by both parties. However, the parties are always free at a later date to revoke, change, or amend the agreement, as long as it is in writing.

In sum, marital agreements offer peace of mind during marriage as to what would happen in a divorce, and can minimize hostilities over dividing up the marital property. Given the permanent effects marital agreements can have, a spouse should have the agreement reviewed by an attorney before signing so that all possible consequences are fully understood.

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