Most people do not anticipate divorce when walking down the aisle on their wedding day. Yet unforeseen problems may arise in the future. A prenuptial agreement is a legal document, signed before marriage, that determines property division and other terms should the couple divorce. Review some of the pros and cons of a prenuptial agreement with an attorney before deciding whether you need one.
Advantages of a Prenuptial Agreement
A prenup does not mean you plan on getting divorced. It prepares you for any future circumstances. More couples than ever are relying on prenuptial agreements for peace of mind, just in case. A prenuptial agreement might be the right choice for you if you have high-value assets and considerable property you wish to keep safe should you and your spouse divorce.
- Protecting assets and property. Colorado is an equitable division state, meaning the courts will divide property as it sees fit during a divorce. A prenup can protect your high-value assets from going to your spouse.
- Keeping separate property separate. A prenup can also prevent your spouse from commingling assets. Commingling means the property will lose its separate status. A prenup can protect them from division under Colorado’s divorce laws.
- Saving time and money. If you get a divorce without a prenup, it can take considerable time, money and resources to reach a settlement or verdict. A prenup can expedite the divorce process by laying out the terms clearly and ahead of time.
- Protecting you from debt. A prenup can prevent your spouse’s debts from becoming your own after marriage, which also prevents them from becoming your responsibility in a divorce.
- Being honest with your spouse. Creating a prenuptial agreement forces you and your spouse to communicate openly and honestly about finances and assets. This could help you both learn important things about each other before getting married.
When done correctly, a prenuptial agreement creates an important legally binding contract that can protect your assets and net worth. Both spouses must comply with its terms in the event of a divorce. Not all couples need a prenuptial agreement, however; nor will all couples benefit from creating one.
Disadvantages of a Prenuptial Agreement
Despite the advantages of a prenuptial agreement for many couples, they still have a relatively negative stigma. A prenup might not mean you plan on divorcing your spouse, but it could still come with some disadvantages.
- Starting an uncomfortable conversation. Bringing up a prenup is often the hardest part for couples. Your spouse may take it as a sign that you do not have faith in the marriage or that you do not trust him or her.
- Favoring one spouse over the other. Many prenuptial agreements are not entirely equal for both spouses. They may favor the spouse whose attorney drew up the paperwork more than the other. Always have a Denver prenuptial agreement lawyer review a prenup before signing.
- Being locked into an agreement. Since a prenup occurs before marriage, it may no longer fit your situation by the time you divorce. One spouse may have far more money in the future, for example, but the prenup will still have its original structure and terms.
- Having limitations. You cannot resolve all problems in a prenup. Child custody and child support, for instance, are not things you can decide in a prenup. You may still have to take your divorce case to court despite having a prenup.
- Not standing up in court. Some prenuptial agreements may not stand up to scrutiny by a judge during divorce proceedings. It is ultimately up to a judge to decide on a prenup’s validity and reasonableness.
Discuss your specific situation and relationship with an attorney before deciding whether or not to create a prenuptial agreement in Colorado. If you decide a prenup is right for you, your lawyer can draft a legal document that will be enforceable in court.