When you read the term “prenuptual agreement,” the first images which come to mind are likely negative. Isn’t that all about shielding assets and cheating your partner before the marriage even starts? At best, it’s not very romantic and awfully cold. Yet today’s marriages sometimes have a lot of good reasons for a strong prenup that is in everyone’s interests.
Both partners may have a business they need to protect, or want to be protected from the liabilities of their partner’s business. Blended families with children very likely have inheritance and insurance issues. At the very least a consultation with an attorney might be in order before marriage, in case a mutually beneficial prenup might be needed.
What is a pre-nup?
A prenuptual agreement is simply a legal document signed before marriage which specifies what financial considerations are going to be combined and which are not. These can include interests in a business, such as a partnership, including both assets and liabilities.
Generally, a prenup is only concerned with finances. Other clauses outlining behaviors sometimes make their way into a prenup, but they are difficult to enforce at best and not recommended.
Colorado law follows the Uniform Prenuptual Agreement Act (UPAA) as do most states. Any agreement signed here is likely to be quite portable for any reason, but it can also specify that Colorado laws apply over any divorce or dispute.
A prenup is not considered valid if it is signed under duress, is not signed with legal representation, or does not include a full financial disclosure. The last one is the reason that man prenups are declared invalid later on.
If you or your partner have complex finances or a lot of debt, it is strongly advised that you consult with a financial advisor or family law attorney with experience in prenups before you are married. Understanding each other’s finances before the big day can prevent a lot of bitter arguments later.
One common reason for a prenup is that one partner has a lot of debt, such as student loans. You may well not want to dump those on your partner and may willingly want to limit their potential liability.
Blended families, in particular, may have very different financial arrangements for their children which they need to maintain. This can include life insurance policies, arrangements with blood family, and inheritances.
It is always a good idea to understand your spouse’s assets as well as their liabilities, especially if they have their own business. One or both of you may find a prenup is desirable.
Not a negative
It may not seem very romantic to go through so much financial planning before you are married. Given that most divorces are cause by disputes over money, it’s actually the most positive thing you can do for continued domestic bliss. It’s also entirely possible that a prenup, or at least a solid disclosure, will be beneficial for both of you. Congratulations to you both, and many happy years ahead!