Prenuptial and postnuptial agreements in Colorado both serve the same purpose, but the key difference between the two lies in the timing of their execution. A prenuptial agreement, known as a “prenup” for short, is a legal agreement that establishes a binding set of terms to determine how property will be divided in the event of divorce or death. As its name suggests, a prenup can only be drafted and signed before a couple officially marries. A postnup has a very similar structure as a prenup, but it can only be drafted and executed after marriage.
The structure of a typical prenup
Typically, a prenup contains a disclosure clause, a “choice of law” clause that covers which default Colorado property rules will be waived, and an “equitable distribution” clause that establishes exactly how property will be divided if the marriage doesn’t work out. You can think think of the equitable distribution clause as the section of the agreement that covers who gets what in the event of a divorce. The disclosure clause provides a complete list of each spouse’s assets, debts and other financial obligations.
Why do some Colorado couples prefer a prenup?
Prenups have a reputation for being more enforceable than postnups, but this isn’t the only reason that many couples prefer to use them. In the process of drafting the prenup, each spouse must disclose all details of their personal finances. These details can include debts that were previously hidden and assets that were kept secret.
When each spouse has a complete picture of the other’s personal finances, they can jointly confront any issues that arise before making an official commitment to one another. Some couples find that drafting the equitable distribution clause of a prenup helps them get everything out on the table financially and breathe a sigh of relief moving forward.
Postnups can come with a few surprises
If a couple marries without a prenup, then assets that a spouse acquires during the marriage can become joint property by default. In fact, income from assets that were deemed to be “separate property” at the time of the marriage can also become marital property. Such income may include interest payments from bonds, dividends from personal investment accounts and cash distributions from a privately held business. In summary, postnups can be more complex than prenups.
The Colorado Marital Agreement Act
Section 14 of the Colorado Marital Agreement Act gives the criteria for a postnuptial agreement to be considered enforceable. Specifically, this legislation states that the agreement must be in writing, must have been voluntarily signed by both parties, and must not violate any existing federal or state family law statutes.
Furthermore, the Martial Agreement Act establishes that a postnup is effective from the moment it is signed by both parties. A postnup is deemed unenforceable if it was signed after divorce proceedings began.
Getting legal help
Whether you are considering a prenup or a postnup, only a properly constructed agreement will be considered enforceable under Colorado law. Although both agreement types serve to accomplish the same objective, getting help from a lawyer in understanding their differences can help you feel more confident in which one you choose.