A prenup or prenuptial agreement is a legal contract between two people before marriage. Prenups define each party’s property rights and outline the distribution of assets, income, and liabilities in the event of a divorce, separation, or death.
There are many reasons couples choose to sign prenups. Whether you are contemplating marriage and are the owner of significant assets or are marrying someone with substantially more assets than yourself, a prenup can benefit you.
Read the following to learn more about prenups in a high asset divorce. Then, speak with an experienced Denver prenup attorney for personalized advice.
Prenups are Not a Plan for Divorce
Contrary to popular thought, prenups are not a plan for divorce. Prenups are legal agreements to provide spouses with peace of mind should they divorce, separate, or one partner dies.
Prenups are not a predictor of divorce. Nor do prenups signify a lack of trust between future spouses.
On the contrary, couples entering into prenups must disclose their assets and liabilities to one another. They must become financially and personally transparent to their future spouse by revealing any current and future financial resources and their intentions for managing their financial affairs during the marriage and when the marriage end at the death of one of them or on the event of divorce.
Entering into a prenup requires open discussion and honesty between future spouses.
Prenups May Reduce the Complexity of a High Asset Divorce
High asset divorces typically involve substantial assets and a variety of asset types. Experienced Denver high asset divorce lawyers know that much time and expenses can go into classifying assets as marital or separate property. The same is true of debts and liabilities.
A prenup can classify property and liabilities as marital or separate in advance. This can streamline the financial aspects of a divorce.
Prenups Define Property as Marital or Separate
Colorado defines marital property as property or debts acquired by either spouse during a marriage.
Separate property is generally defined as:
- Gifts to one spouse alone;
- Property set apart by a prenuptial or postnuptial agreement; and
- Property acquired prior to marriage.
However there can be unanticipated pitfalls with each of those categories that affect the unwary. Often a gift, inheritance or premarital property increases in value during the marriage. In the absence of the protection of a prenuptial agreement that increase in value will be marital even though nothing was ever transferred into joint names. A prenup allows spouses to define assets and liabilities as marital or separate, eliminating any ownership dispute or court battle.
Additional Benefits of Prenups
Prenups are an intelligent way to start a high asset marriage. In addition to defining marital and separate property rights between spouses, prenups can:
- Protect a business owner spouse’s interests from division in a divorce;
- Put safeguards in place for non-marital children’s inheritance;
- Establish expectations for spousal maintenance; and
- Separate emotions from assets in a divorce.
Prenups are legally enforceable in Colorado. However, there are legal guidelines to follow when creating a prenup to ensure it will pass the court’s scrutiny.
Consult an experienced Denver family law attorney before drafting or agreeing to a high asset prenup.
Contact an Experienced Denver Family Law Attorney Today
Hogan Omidi, PC, can help you create a valid high asset prenup to protect yourself in the event of divorce, separation, or the death of your future spouse. We are Denver divorce attorneys who understand Colorado family law and want to use our knowledge to secure your future.
At Hogan Omidi, PC, our partner, Kathleen Hogan, “wrote the book” on Colorado family law practice. Let us guide you through the prenuptial agreement process.
Schedule your consultation today at Hogan Omidi, PC, by phone or online.