While it’s not romantic to consider what will happen if the marriage ends, for many Colorado residents, it makes sense to get a prenuptial agreement drafted so as to protect income or assets. Prenuptial agreements can address property division and debt, obligations related to wills or insurance policies or pensions, and spousal maintenance. They cannot address what will happen to the children, because the courts must consider the children’s best interest regardless of what spouses agreed before the marriage.
Under the Uniform Premarital and Marital Agreements Act, there are new requirements for prenuptial agreements and marital agreements signed on or after July 1, 2014. The law doesn’t affect agreements signed before that. In general, the law gives greater protection to a spouse that may not fully understand what rights he or she is giving away, though its terms, like many laws, leave some room for judicial interpretation that may lead to less predictable outcomes for a time.
Under the new law, a premarital agreement is unenforceable if a party against whom enforcement is sought proves: (1) a party’s consent to the agreement was involuntary or the result of duress, (2) the party didn’t have access to independent legal representation, (3) the agreement didn’t include a notice of waiver of rights at the time signatures were obtained unless the party had independent legal representation; or (4) the party didn’t receive an adequate financial disclosure.
As a result of the Act, there are more grounds to challenge a prenuptial agreement now than there have been historically. For example, more spouses are likely to argue that they had no access to independent legal representation. Under the law, a spouse has access if he or she had a reasonable time to decide whether to retain a lawyer or locate a lawyer to get advice. While this helps determine what access is, it leaves the question of “reasonable time” somewhat murky. This means that a spouse can argue, for example, that they had insufficient time to decide whether to retain a lawyer or had insufficient financial resources to hire one. We don’t know yet what courts will find a “reasonable time” is within which to locate a lawyer, present the agreement, and consider his or her advice.
Those that write their own prenuptial agreement may have grounds to challenge the agreement if they did not include a “conspicuous” notice waiving rights within the agreement. The waiver must explicitly state that the party waiving rights is giving up his or her rights to be supported by the other, giving up the right to ownership or control of property, agreeing to pay bills and debts of the other, and giving up rights to property and money if the marriage ends. While we can make a reasonably good guess about what is not a conspicuous display, courts have yet to determine what “conspicuously displayed” means.
“Adequate financial disclosures” must be made, but with this, too, courts have yet to nail down what this means. In most cases, it will mean that both parties have a good-faith estimate of the other spouse’s liabilities, property and income at the time the agreement is signed. However, there may be some oddball cases in which one spouse receives a windfall after the financial disclosures or incurs a substantial debt after them, and it’s not clear how those cases will be decided yet.
With regard to spousal maintenance and allocation of attorneys’ fees in marital agreements, an agreement cannot be “unconscionable” or extremely unfair at the time of the agreement is enforced. For example, if two starving artists that work as waiters get together when they are 25-years-old and have no money, but nonetheless enter into a marital agreement during the first year of marriage, and then the wife puts the husband through medical school resulting in the husband earnings seven figures a year for a decade before they divorce, a provision that stated there would be no spousal maintenance may be found unconscionable.
At Plog & Stein, our experienced Colorado divorce attorneys are familiar with both the old law and the new law related to premarital or marital agreements, and can help you challenge improper agreements during your divorce. To schedule a confidential consultation with a knowledgeable and skilled advocate, contact us today through our website or at 303-502-9422.
More Blog Posts:
What Constitutes Marital Property in Colorado? Denver Divorce Attorney Blog, June 23, 2014
Division of Property During Divorce in Colorado, Denver Divorce Attorney Blog, July 29, 2013
Divorce in Denver: Dividing Retirement Plans, Denver Divorce Attorney Blog, August 6, 2011