The Role of Prenuptial Agreements in Property Division

What is a Prenuptial Agreement?

A prenuptial agreement or marital agreement is a contract signed by a couple before marriage. Its purpose is to designate spousal property rights and determine how property and spousal maintenance will be handled in the event of a divorce.

Who Can Benefit from a Prenuptial Agreement?

Many believe prenuptial agreements are only for the wealthy. However, this is not the case. Prenuptial agreements are used by couples for several reasons regardless of wealth to simplify and define property division, inheritance rights, and more should a marriage breakup.

Reasons for Prenuptial Agreements

There are various reasons for prenuptial agreements. Many depend on the age of the couple entering into a marriage.

Younger couples may use prenuptial agreements to address:

  • Student loan debt;
  • Separate finances; and
  • Intellectual property.

Previously married or older couples may choose to sign a prenuptial agreement to protect:

  • Premarital assets;
  • Inheritances of children from previous relationships;
  • Family businesses or established companies; or
  • Retirement holdings.

Prenuptial agreements can also be used to define marital rights and obligations in the event of a spouse’s death. Prenuptial agreements may not be used to predetermine child support or child custody.

Marital Property Division in Colorado

In the absence of a prenuptial agreement, all property and debts acquired by either party during the marriage are considered to be marital property. It does not matter how that property or debt is titled.

Marital property is subject to equitable or fair division by the court upon divorce. Marital property division excludes a spouse’s separate property.

What is Separate Property in Colorado?

Separate property in Colorado is property:

  • Set apart by a valid prenuptial or postnuptial agreement;
  • Gifted or inherited by one spouse alone; or
  • Owned by a spouse prior to marriage.

When separate property is not clearly defined by a prenuptial or postnuptial agreement, it can easily become mixed with marital property. This can result in any increases in the value of separate property during the marriage being divisible as marital property upon divorce.

Avoiding Colorado’s Default Marital Property Division Laws

A valid prenuptial agreement allows a couple to avoid Colorado’s default marital property division laws. This includes the equitable division of any assets, debts, retirement, business income, or property value increases during the marriage.

A prenuptial agreement eliminates any confusion as to what property is separate property of the spouses. This can eliminate a lengthy and expensive court battle over assets.

Ensure Your Colorado Prenuptial Agreement is Valid and Enforceable

Colorado permits spouses to enter into prenuptial agreements without legal representation. However, they must do so with a waiver.

A judge may consider a lack of counsel when considering whether a prenuptial agreement is valid. Therefore, it is wise that both parties entering into a prenuptial agreement have legal counsel when entering a contract.

Contact an Experienced Broomfield Prenuptial Agreement Attorney Today

Protect your current and future legal property rights by entering into a comprehensive prenuptial agreement with your spouse-to-be. At Danielsen Westhoff, PC, we have helped Coloradoans for more than twenty years make crucial family law decisions.

Let Danielsen Westhoff, PC, guide you through creating a prenuptial agreement tailored to fit your needs. You can reach Danielsen Westhoff, PC, by calling our Broomfield office or contacting us online.