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Understanding premarital and marital agreements

The Colorado Uniform Premarital and Marital Agreements Act became effective on July 1, replacing the previous law in its entirety. It mandates various procedural requirements in order to create a valid and legally binding premarital or marital agreement in Colorado, although most of the provisions are similar to those in effect before July 1.

Perhaps the most basic requirement is that a premarital or marital agreement be in writing and signed by both parties. An oral agreement regarding what the parties agree to do with the house in the event of a divorce, for example, will not be enforceable. The act also specifies the applicability of the act to parties in or entering into a civil union.

Other procedural requirements are specified in the act, including the following: A premarital or marital agreement is unenforceable if a party who contests the agreement can prove that duress existed, that there was insufficient access to legal counsel, that there was an inadequate financial disclosure from the other party or that there was an insufficient explanation of the rights being waived, unless the party against enforcement was represented by independent legal counsel. A party is deemed to have had sufficient access to independent legal representation if there existed reasonable time to decide whether to retain a lawyer, to locate a lawyer and to obtain and consider the lawyer’s advice. Another requirement regarding the access to independent legal counsel is the requirement that the party have the financial ability to obtain counsel or that the other party agreed to pay for independent legal counsel. A premarital agreement offered shortly before the wedding will likely be successfully challenged as not meeting the requirement regarding access to independent legal counsel, unless counsel is in fact obtained.

The statute makes clear that adequate financial disclosure exists if the party against the enforceability of the agreement received a reasonably correct description of the assets, debts and income of the other party – including good faith estimates of value – or the person against enforceability had adequate knowledge or a reasonable basis for adequate knowledge of the property, debts and income of the other party. The act does not require parties to seek appraisals of all assets involved as long as the estimated value is one created in good faith and not with an intention to deceive the other party.

The waiver of rights requirement mandates that the following be conspicuously displayed in the agreement and provide language which is in substantial conformity to the following: “If you sign this agreement, you may be: Giving up your right to be supported by the person you are marrying or to whom you are married. Giving up your right to ownership or control of money and property. Agreeing to pay bills and debts of the person you are marrying or to whom you are married. Giving up your right to money and property if your marriage ends or the person to whom you are married dies. Giving up your right to have your legal fees paid.” This waiver of rights provision is not required if the party against enforcement of the agreement was represented by independent legal counsel.

The Colorado Uniform Premarital and Marital Agreements Act also specifically enumerates provisions that will not be enforceable. Any provision that does the following will be unenforceable: negatively impacts a child’s right to support (for example, a waiver of child support), limits or confines a victim of domestic violence from a remedy pursuant to the Colorado statutes, attempts to punish a party for seeking a divorce or legal separation, attempts to change the statutory grounds for receiving a dissolution or legal separation or contains a provision that violates the public policy of the state. For example, if the agreement specifies that a divorce will only be allowable if one party commits infidelity, that provision will be unenforceable as it attempts to change the statutory grounds for divorce in Colorado. It is also important to note that if the agreement has terms regarding the payment or waiver of spousal maintenance or the payment of attorney fees, these provisions can be found to be unenforceable later if the court deems them unconscionable at the time enforcement is sought. A premarital agreement that calls for the waiver of spousal maintenance may be deemed unenforceable if the income earning ability of the parties is grossly inequitable at the time of enforcement of the agreement.

Marital and premarital agreements can be of critical importance to safeguarding a spouse’s assets. The Colorado Uniform Premarital and Marital Agreements Act makes it easier for parties to understand exactly what procedural requirements are necessary to create a valid agreement. Many of the procedural requirements are designed to generate fairness between the parties and to promote situations where both parties understand their rights before entering into a potentially prejudicial agreement with the other party.

Nicole Vette is an attorney with the Durango law firm of Anderson & Baker, LLC, which specializes in domestic relationship law. Reach her at nv@andersonbaker.com.



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