The Benefit of Prenuptial Agreements in Colorado

You've probably heard of prenuptial agreements, or "prenups," before, but mainly in movies where a wealthy couple is involved. Prenups are indeed more common when couples have many assets or complex assets, such as a family business. However, more couples use prenups now than ever before, and they are no longer an agreement reserved for high-income earners.

What is a prenup?
A prenuptial agreement is a legal contract that sets out just how debts and assets will be divided in the event the couple divorces in the future. That way, some of the divorce’s messier parts are essentially decided before the divorce r begins. If you are not sure whether a prenup is the right move for you and your soon-to-be spouse, here are some of its benefits: 

Opened communication lines
Considering a prenuptial agreement often opens a line of dialogue in the relationship. It can seem a little daunting to talk about these issues at first. Still, when you and your partner are honest and open about finances, property, and your respective expectations before the wedding, it can be a great way to get on solid ground together. Even if you ultimately decide against the agreement, you will each have a pretty open line of communication about financial matters, which are often sticking points for couples and can contribute to divorces.

Save money and time
As you have likely gathered, a divorce can consume time and money. Even if you and your spouse agree on just about everything, you can still end up spending money and time on court costs and legal fees before your divorce is finalized. Often, a couple will start on the same page in a divorce but then begin to disagree on issues, which drags the process out and makes it more expensive.

With a proper and comprehensive prenup, many of the common hot-button issues in a divorce are already addressed and decided, which can make the case move faster and prevent a costly and lengthy legal battle.

Protect Family Heirlooms and Any Separate Property
The division of assets and debts is often the thorniest part of a divorce. Normally, separate property - property belonging solely to one spouse - and marital property is identified and then divided. A prenup can be helpful here because it allows you to ensure you receive assets you believe are separate, such as a family heirloom.

If you have a family business, a prenup can protect that as well. When your spouse becomes involved in your family business, it can change how the court views that property. A prenup can keep the family business with you, even if your spouse did participate in it at one point during the marriage. Alternatively, you can also provide for your spouse to receive something from the family business in recognition of his or her contribution, but in a way that would not bankrupt the business if he or she immediately went after a share.

Shield yourself from debt
Just like assets, debts are split in a divorce, too, and you can end up with debts that you did not incur, but your spouse did before you got married. If your spouse comes into the marriage with a lot of debt, you can use a prenup to identify those debts as solely belonging to your spouse and layout how that debt will be handled if you divorce later.

Maintenance
Maintenance, or, what we used to call alimony, can also be determined in a prenup.  There could be anything from an agreement to a specific amount, or a complete waiver of the right by one or both parties.

There are drawbacks
As with many things, there are drawbacks to prenups, too. First, it can be hard to bring up the topic. Of course, prenups should be discussed at the right time and in the right place. You shouldn't wait until the wedding is already in the works to ask about a prenup. In fact, if you spring a prenup on your spouse at the last minute, the court could find your spouse signed under pressure and void its terms. Ensure your prenup discussion takes place well before any wedding and in private. Be honest about the terms you want.

Sometimes, prenups are not balanced and favor one spouse over the other. While a judge may invalidate a very unbalanced prenup, one that is somewhat unbalanced may be upheld. Therefore, It is important to remember that it is always possible you will divorce, even if you don't believe that at all at the time of the prenup signing. Never sign a prenup without fully understanding what it would do if you were to get divorced. It's best to have an experienced attorney review the prenup before you sign it.

People with high net worth should consider having a prenup agreement before being married. A seasoned family law attorney like Mitch Geller can your family feel protected and prepared. Call today to set up your appointment at 720-696-7897.