A prenuptial agreement, sometimes called a "prenup," is a legally binding contract between two people who intend to marry.
A prenuptial agreement is an opportunity for a couple to write the rules that will control their marriage, and their divorce, should a divorce become necessary. A prenuptial agreement allows parties to choose how their finances and property will be divided, rather than following state laws, in the event of a divorce.
The process of drafting a prenuptial agreement is an opportunity for parties to talk, prior to their marriage, about financial responsibilities and the expectations of each party. It is a good way to start a marriage, with full disclosures of assets, debts, and expectations, prior to saying wedding vows.
Smart Reasons to get a Prenuptial Agreement
1. Keep your assets separate- In a prenuptial agreement you can specify which premarital assets will remain separate property, and which ones will become marital. In Colorado, in order for your prenup to be enforceable both parties must give each other adequate financial disclosures of their separate property. By adding this information to your prenuptial agreement, you will save yourself the hassle of having to determine the premarital value in the event of a divorce. One major purpose of drafting a prenuptial agreement is to protect assets in a divorce.
2. Keep your debt separate- Many people today are entering marriages with large amounts of student loan debt and credit card debt. A prenuptial agreement can specify that any personal debt will never be the responsibility of the other party.
3. Inheritance- Often people sign a prenuptial agreement because their extended family wants to protect an inheritance. A prenup can determine how an inheritance will be handled during, or after the marriage. A prenup can also include rules about what a spouse, or prior children, will be allowed to inherit. A prenuptial agreement can compliment existing estate planning documents.
4. Divorce negotiations- A prenuptial agreement can outline what will happen with martial assets and personal property in the even of divorce. A prenuptial agreement can outline agreements regarding maintenance (Colorado's word for alimony) amounts and duration.
A prenuptial agreement should be tailored to your specific wishes, and your specific situation. If you are considering getting a prenuptial agreement before your marriage, please call our office to discuss what goes into drafting such a document.
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