All About Colorado Prenuptial Agreements

What is a Prenup?

A prenuptial agreement, also known as a premarital agreement or antenuptial agreement, is a legally binding agreement signed by both parties before the marriage that outlines the assets and debts that each spouse owns prior to the marriage. Prenuptial agreements are often misconstrued as tools solely for the wealthy, but they can be invaluable for individuals across socio-economic statuses.
The main purpose of a prenuptial agreement is to delineate the financial responsibilities and expectations of both parties in order to avoid potential disputes in the event of divorce or separation. A prenuptial agreement can cover a wide range of topics, including the division of property and debts, spousal support, and the terms under which one spouse may be entitled to the estate of the other in the case of death.
Couples in Colorado may opt for a prenup for various reasons . It can be particularly beneficial for those entering into a second or later marriage, parents seeking to protect assets for their children from a previous marriage, or individuals who own businesses, have high-value properties, or are bringing considerable debt into the marriage. Additionally, a prenup can provide peace of mind by clearly outlining each party’s rights and obligations in the event of a split.
In Colorado, prenuptial agreements are governed by the Uniform Premarital Agreement Act, which outlines the requirements and regulations for the creation and enforcement of such agreements. It is important to consult with a knowledgeable attorney when considering or drafting a prenuptial agreement to ensure that all legal requirements are met and that the agreement is comprehensive and enforceable.

The Legal Necessities in Colorado

As with any contract, a prenuptial agreement is subject to the local laws of the jurisdiction in which the couple resides. As such, a premarital agreement, or premarital contract, is governed (in addition to the common law) by The Uniform Premarital Agreement Act (UPAA), as adopted by Colorado in 1987. The Colorado Premarital Agreement Act governs premarital agreements that are signed and executed on or after July 1, 1987. Under the Act, a premarital agreement may be entered into for any or all of the following subjects: If the agreement is conscionable in the context of the circumstances existing at the time it was made, then a court can enforce the agreement even if it has become unfair due to changed circumstances of the parties. Parties cannot waive child support provisions in a premarital agreement. However, the parties may waive spousal maintenance provisions in a premarital agreement – as long as adequate disclosures are made. Because of the one year statute of limitations on challenging a premarital agreement, it’s best to create a prenup before the relationship has deteriorated past repair; an example of a classic post-nuptial (i.e. postmarital) agreement challenge is the Tiger Woods/Mindy Law post-nuptial agreement dispute.

The Benefits of Entering Into a Prenup

In life, one thing is certain — we all want to protect what we have and what we love. A prenuptial agreement is a legally binding contract that tells the law how you and your spouse want to divide your assets and liabilities in the event of divorce. Many times people enter into prenuptial agreements to protect their children from their prior relationships. Some people want to protect a family business so it’s not lost in a divorce. The factors for having a prenuptial agreement are numerous, but here are some benefits of having one: Maintaining financial control. In general, a premarital agreement allows a couple to determine their own division of assets and debts, and allows each person to keep control of their own financial future. These agreements usually list all of the assets of both persons, so whether you have a $500 or $50,000,000 estate, a premarital agreement allows each person to have their interests protected. Simplicity. These agreements allow a couple to lay out their intent for the division in a divorce. When you have a premarital agreement, you just have the court enforce what you both agreed to before the marriage. Agreements that are made after the marriage starts to go bad usually require litigating over what was the intention when the contract was made. Also, by having an agreement in place everything is spelled out, you and your spouse can do nothing and let the court simply enforce it. You don’t like the laws in Colorado anyway. We all hear so often "If two people get divorced, the wife gets half of the husband’s things" and many other misperceptions about the law. I’ve had many clients who have no idea of how the law treats assets and liabilities, whether you live in Colorado or anywhere else for that matter. Sometimes, the law doesn’t make any sense, and allowing you and your spouse to just agree what your rights are is liberating and prudent.

Prenup Myths

Many people in Colorado have misconceptions about prenuptial agreements. Some of the most common are as follows: If you’re in love, nothing else matters. However, many people fall out of love. Having a plan can save you a great deal of time and money in the long run to address how property is divided and what happens to income and expenses should there ever be a divorce or death. In general, there are no restrictions on the kinds of provisions you can include in your prenuptial agreement. However, they cannot address custody or well-being of children (because this is against public policy). If one party has (or plans to have) a child or children, dealing with the child or children in the prenuptial agreement is a separate issue. If you’re eager to sign away your rights, it suggests to the other side your motives are suspect. On the other hand, if you desperately want to keep all of your rights, it suggests to the other side that you don’t really trust your partner. Prenuptial agreements only address things that might happen later. They can also include provisions as to how finances are handled during marriage. This can be very helpful for a couple, or especially when they’re separating.

Making a Prenup Viable

The author believes that parties wishing to create a legally binding prenuptial agreement should have the document drafted and signed by an attorney experienced in the area of prenuptial agreements. A do-it-yourself version is likely to contain insufficient or missing material information, and therefore may not be legally binding on both the husband and wife in the foreseeable future.
The first step in creating a prenuptial agreement is to engage separate counsel for each spouse . Once both spouses have been separately represented by counsel, then the attorney who will be drafting the agreement can begin to work out the details using a draft form prenuptial agreement. No prenuptial agreement should be signed unless both parties have a full and open disclosure of all income, assets, and debts. The prenuptial agreement must be signed by both the husband and wife before a notary public to be valid in Colorado.

Amending or Nullifying a Prenup

In Colorado, a prenuptial agreement can be revoked or modified by mutual consent of both parties, or by proving that one of the following exists: A court can also unilaterally change the provisions of a prenuptial agreement based on the circumstances presented to the Court. The parties can revoke a prenuptial agreement — either in full, or just a part of it — by executing a written and signed document that demonstrates their mutual intent to do so. The revocation is not binding upon third parties when it is not in writing, or where the individual had knowledge of the transaction at the time it was done. To modify a prenuptial agreement, both parties must execute a new written agreement with the same formality as the original. All provisions of the original agreement will stay in effect until the new modifications are made and executed by both parties, and the modifications must be in writing and acknowledged by both parties.

Enforcement and Disputes

In Colorado, as in most jurisdictions, once a prenuptial agreement is signed voluntarily by both parties, the contract remains in force after marriage. The parties agree to the terms in anticipation of divorce, and the law affords them wide latitude when it comes to protecting themselves financially while acknowledging that divorce is always a possibility. Today, prenuptial agreements are more common than ever, whether the parties are professionals, executives or stay-at-home moms. Without a prenuptial agreement in place, how property and debt is split upon divorce is at the sole discretion of the domestic relations courts and is governed by Colorado marital property laws.
Presented with an airtight prenuptual agreement, the courts observe the required elements and enforce the contract accordingly . There are, however, opportunities for challenge. An agreement may be contested successfully if it is alleged to be unconscionable, if there was undue pressure to sign it, if the terms are unfairly one-sided, if the terms were not explained by an attorney or if financial disclosures did not accurately reflect the circumstances of each party’s financial state. There is no statute of limitations on the enforcement of a prenuptial agreement, but if there is a divorce and each spouse wishes to contest the terms, the issues will be adjudicated alongside the separate domestic relations case.
Remember: Each party should have his or her own divorce attorney draft the agreement, as failure to disclose relevant information could render a prenuptial contract null and void.