Premarital & Marital Agreements
‘Til death (or divorce) do us part
Even though divorce rates have slightly decreased in recent years, about half of all marriages will end in divorce. Before planning a wedding, a premarital agreement, also known as a prenuptial agreement or “prenup,” is something you should consider. A marital agreement can also be entered into in Colorado, which is executed during a marriage. A marital agreement can also referred to a post nuptial agreement. Both a premarital or marital agreement help establish a party’s intentions regarding what happens upon divorce or if one of the spouses passes away.
Prenuptial Agreements
Not Just for the Wealthy
Prenuptial agreements are traditionally thought of as only being for wealthy people who are marrying someone with less financial means. In reality, premarital and marital agreements are a vastly underutilized estate planning tool. Premarital agreements can be used to ensure that assets are passed to children of prior marriages and to protect an individual from inheriting their spouse’s debts, among many other uses. Here are some things you may want to consider when planning a marital or premarital agreement:
Premarital Assets & Debts
Providing a list of assets and debts currently in each individual’s name is a requirement for establishing a premarital agreement. It is essential to be honest and up-front with each other regarding the financial situation prior to marriage. You and your partner may want to establish whether the premarital debts and assets will remain separated or if they will be combined with marital property as well as whether or not any premarital assets used to pay off the other person’s debt will be owed back later or considered a gift.
Marital Property
Once two people are married, the assets and debts they accumulate together are considered marital property. In a marital or premarital agreement, it will be important to establish whether or not any property acquired during marriage will be split 50/50 if a different arrangement will be made.
Income Management
In many relationships, opposites attract. So, in a marriage, you may have one person who is a spender and one who is a saver. This is fairly typical to see in a relationship and should be addressed. You may want to determine who will manage finances or if you will make all decisions together. Will you have joint bank accounts, keep them separate, or both? Who will be responsible for paying household bills? Determining long-term financial goals is also important in regards to investing in a home or saving for retirement.
Spousal Maintenance
This could be a difficult subject because it causes both parties to consider the future if they were to divorce or discuss prior marriages. You may want to establish in this marriage what the terms would govern potential spousal maintenance, often referred to as alimony. What will the amount, conditions, and duration be? What would happen if one person were out-of-work, had health problems, or went back to school? This may be one of the more uncomfortable topics to discuss, however not all premarital or marital agreement have to address it.
Contact Us
Discussing a marital or premarital agreement with your partner can feel daunting and intimidating. The attorneys at Gendelman Klimas Edwards are happy to discuss whether a premarital agreement or marital agreement is right for you. Contact us by calling (720) 213- 0687 or by using the button below.
