DENVER — It's wedding season, and as engaged couples plan their special day, the focus might be on the dress or the food, but what about a prenuptial agreement?
A prenuptial agreement is a contractual arrangement made by a couple before they marry. It dictates the ownership of their respective assets should the marriage fail.
Legal experts say that in this economic climate, the contractual agreements could prove very useful. Attorney April Jones of Jones Law Firm PC said as home values increase, couples could have more money to consider.
"You can be married a very short amount of time but have equity to be divided of a couple hundred thousand dollars," Jones said.
Couples can benefit even if they're not rich.
“You can create a document that essentially allows you to opt out of what Colorado law would do in the event of a divorce," she said.
Without a prenup, Colorado will split up a couple's assets based on the concept of equity if a couple divorces, according to Jones.
“The court does what's fair," she said. "Fair tends to be half, but it is within the discretion of the court to determine how your property is to be divided."
Jennifer Anderson, an attorney who plans to get married soon, said she has considered a prenuptial agreement.
“A situation that you can't even fathom right now could still happen," Anderson said. "I think as lawyers, we definitely learned that.”
The “Uniform Premarital and Marital Agreements Act” spells out the rules for Colorado prenups, which states that:
- The agreement has to be signed by both parties.
- It’s effective upon marriage.
- It won’t be effective if it’s signed under duress.
- Signing parties must at least have access to an attorney.
- It can’t be used to opt out of paying child support.
Talking about divorce before even getting married can be a real bummer, but Anderson said the conversation is worth it.
“It might be a tough conversation," she said. "But I think, ultimately, if you don't do it, you might resent the other person for it or it may fester.”
Whether a couple chooses to do a prenup or not, it's best to discuss finances in preparation of sharing life with one another.
“You might as well be open and honest from the start," Anderson said.
If a couple didn't do a prenup before tying the knot, there is still an option to choose how finances would be divided in case of a divorce — a post-nuptial agreement. Couples can create one when they're married. The only catch is that the couple can't do a post-nuptial agreement while planning to divorce.