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Premarital and Marital Agreement Services
Prenuptial Agreements
Traditionally, prenuptial agreements were seen as something only for the wealthy or those with complex estates. However, they are a powerful and underutilized estate planning tool for individuals of all financial backgrounds. Prenups can be used to protect children from prior marriages, safeguard assets, and protect an individual from inheriting a spouse’s debts. By addressing financial matters upfront, prenuptial agreements can prevent future conflict and ensure that both parties are clear on their financial roles within the marriage.
Premarital Assets & Debts
One of the first things that needs to be addressed in a premarital agreement is each individual’s assets and debts prior to the marriage. It’s essential for both parties to be honest and transparent about their financial situation. The agreement will outline whether premarital assets and debts will remain separate or if they will be combined with marital property. It’s also important to clarify whether premarital assets used to pay off one spouse’s debt will be owed back later or treated as a gift.
Marital Property
After marriage, the assets and debts acquired are typically considered marital property. A marital agreement can establish whether assets acquired during the marriage will be split equally (50/50) or if an alternative arrangement will be made. This is especially important for couples with significant assets, business interests, or varying income levels, as it ensures both parties are clear on what they are entitled to in the event of divorce.
Income Management
Every couple has different approaches to managing money, and it’s essential to discuss these differences before marriage. If one partner is a spender and the other is a saver, a premarital agreement can address these concerns. You may want to determine who will manage finances, whether you will have joint bank accounts or separate accounts, and who will be responsible for household bills. Additionally, a marital agreement can help set long-term financial goals, including plans for homeownership, saving for retirement, and managing investments.
Spousal Maintenance (Alimony)
Discussing spousal maintenance (also known as alimony) can be one of the most difficult topics in a premarital or marital agreement. However, addressing this issue upfront can provide clarity and prevent future conflict. Spousal maintenance terms may include the amount, duration, and conditions under which alimony would be paid, particularly if one spouse is out of work, experiences health problems, or goes back to school. While not all marital agreements need to include spousal maintenance, it’s important to consider it if one spouse may rely on the other financially after divorce.
FAQs
Frequently asked questions about Premarital and Marital Agreements in Colorado
Still have questions? Reach out to us today.
What is a prenuptial agreement?
A prenuptial agreement (or prenup) is a contract created by two individuals before marriage that outlines the division of assets, liabilities, and other financial matters in the event of divorce or death. It can also address issues such as spousal maintenance and financial responsibilities during the marriage.
Do I need a prenuptial agreement if I’m not wealthy?
A prenuptial agreement is not just for wealthy individuals. It’s a useful tool for anyone who wants to clarify financial responsibilities and protect assets, including those with children from previous marriages or those who want to prevent inheritance issues. It can also protect you from inheriting your spouse’s debt.
Can we change a prenuptial agreement after marriage?
Yes, a prenuptial agreement can be modified or updated after marriage with a postnuptial agreement. This allows the couple to revisit and adjust the terms based on changing circumstances such as financial situations, children, or other life changes.
What is the difference between a prenup and a postnup?
A prenuptial agreement is signed before marriage, while a postnuptial agreement is created after marriage. Both agreements serve the same purpose of outlining financial responsibilities and asset distribution in the event of divorce, but the timing of when they are created differentiates them.
Is spousal maintenance included in a marital agreement?
While it is not required, spousal maintenance (or alimony) can be addressed in both premarital and marital agreements. If you and your spouse wish to clarify how maintenance will be handled in the event of divorce, it’s a good idea to include these terms in the agreement.
