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In Colorado, marital agreements come in two forms: the prenuptial and the post-nuptial agreement. Both essentially can perform the same function: detailing what will happen to assets and debts if the couple divorces or if one spouse passes away. The main difference between the two is when the agreement is signed. A prenup is signed by the parties prior to marriage, while a post-marital agreement is done after they are legally married. Marital agreements offer many potential benefits to the couples who use them. Learn more about how these agreements can work to the advantage of you and your spouse.
Having a marital agreement in place will help protect you financially should anything happen that triggers the agreement’s enforcement. This is especially helpful for spouses with a substantial amount of assets, those who have an interest in a business run by their family, and people with children from previous relationships who want to ensure those children receive property from their estate. A spouse who is leaving the workforce to raise the children of the marriage can also benefit from the protection of a marital agreement as it will ensure financial security if the marriage ends.
When one party is entering or has entered the marriage with substantial debt, a prenup or post-marital agreement can address debt division to help protect the other spouse. Generally, this is more effective for debts that were incurred before the parties were married and not debts that come about after the marriage. If you want to marry your partner but are concerned about his or her debt load, this could be a viable option for your protection.
For this benefit to apply, your agreement must include all the areas that concern you. Your attorney can review the potential terms of your agreement and help you identify other matters you may wish to address based on your specific circumstances.
Talk of finances can strain any relationship, which is why marital agreements have become more popular in recent years. More and more couples use these agreements to settle potentially contentious matters right from the start, leaving both spouses a little more comfortable. If you decide to get divorced, a properly drafted and executed marital agreement could help avoid a prolonged and expensive battle in family court.
For your marital agreement to be truly beneficial to you and your spouse, it needs to be properly created and executed. In Colorado, these agreements have to be in writing and both parties need to sign them. There are certain terms that, even if included in a properly drafted agreement, are not enforceable in court in this state. For example, you can’t restrict child support or violate public policy in a marital agreement. Both parties have to sign the agreement entirely of their own free will as well. If one spouse is coerced, pressured or threatened into signing, the agreement will not stand up in court. Your agreement also can’t penalize a spouse for going to court to start proceedings for divorce or legal separation.
Before you have your martial agreement prepared, you and your partner should write down what you want to address and your individual desires. Compare the two lists and see where you agree and where you don’t. The agreement creation process will be easier and run more smoothly if the both of you enter into it already on the same page.
Keep in mind that your attorney may identify areas you missed which should be raised and addressed in your agreement. This means you will both need to be prepared to discuss certain issues and make compromises during the formal creation process. Entering with an open mind and a clear list of goals will give you the best chance at creating a comprehensive agreement.
Talking about finances and the future in this context can be awkward and challenging at the same time. You may not think you need a marital agreement, but most people have some asset that is worth protecting. If you are a stay-at-home parent, expect an inheritance, have a lot of personal assets or are involved in a business, you should consider a marital agreement.
Keep in mind that while establishing a marital agreement does offer security, it does not serve as a guarantee that you will avoid court battles, challenges or other obstacles in the event you decide to divorce. Generally speaking, prenups are preferable as the court often assumes those are valid, whereas the validity of a post-marital agreement is usually questioned.
A marital agreement will impact your financial life if you divorce, and it needs to be done properly in order to be effective. Speak to our experienced team at The Burnham Law Firm about your marital agreement by calling (303) 625-9193.