Marriage is a legal commitment between two people that combines many aspects of their lives, such as their finances and even their debt. Many people are familiar with the concept of prenuptial agreements, or legal documents created to protect the finances and assets of couples planning to marry, but postnuptial agreements are less known. Although such agreements are sometimes seen as foreshadowing a future divorce, they are in fact effective and collaborative decisions that can help prevent marital issues later.
What is a Postnuptial Agreement?
Postnuptial agreements are legally binding agreements that are made between married couples after their marriage has taken place. These agreements are designed to ensure that the distribution of assets in the event of a divorce will be equal or satisfactory for both parties. A postnuptial agreement is a wise choice for couples experiencing financial difficulties or disagreeing about their financial responsibilities. Postnuptial agreements differ from prenuptial agreements in that the married couple may use a mutual attorney when creating the document, whereas prenuptial agreements require each party to have their own attorney.
Because postnuptial agreements are legally binding, they must meet certain criteria to be enforceable in a court of law. Postnuptial agreements must meet the following requirements:
- Contain the signatures of both parties and be in writing
- Be voluntary, both parties must enter the contract willingly
- Include complete and accurate financial disclosures for both parties individually as well as any mutual assets
- Include a list of the specific rights that are being waived by both parties
- Give both parties a reasonable amount of time to review the contract’s terms
- Be within the scope of Colorado law
For a postnuptial agreement to be valid in Colorado, it must include financial disclosures from both parties. These disclosures must list a lot of different assets and debts, including:
- Property owned by both parties or owned individually
- Bank account details for accounts owned mutually or individually
- Investments that have been made
- Any businesses owned mutually or individually
- Mortgages, credit card debt, student loans, and other debts.
Postnuptial agreements are not only useful in the event of a divorce. They can also include provisions regarding how assets will be distributed if one party passes away before the other during their marriage. These provisions are normally included in the place of a living will.
These agreements can also protect one spouse from the other spouse’s financial irresponsibility. If one spouse has a tendency to take on a significantly larger amount of debt than the other spouse, a provision can be included in their postnuptial agreement that states the spouse who created the debt will be the only one responsible for it if divorce occurs.
If the court discovers that any such assets have been left out of a prenuptial agreement, intentionally or on accident, they may decide that the agreement cannot be enforced.
What Could Invalidate a Postnuptial Agreement?
The courts take financial matters between couples seriously because they want to ensure no one is being treated unfairly or is taken advantage of. Understanding what circumstances could lead to a court rejecting a postnuptial agreement before creating the agreement could save trouble down the line. Postnuptial agreements could be invalidated if:
- One or more parties involved in the agreement did not have an attorney present during the creation and signing of said agreement
- The agreement failed to cover all assets and debts before it was constructed
- The agreement includes terms that cannot be legally enforced
- The agreement was created because the couple was already planning to get a divorce
- One party forced the other to sign the agreement or the signing took place while either party was under duress
Is There Anything That Can’t Be Covered in a Postnuptial Agreement?
Given the tense nature of divorce, some couples may try to include unenforceable provisions in their postnuptial agreements to avoid having to hash them out if they decide to separate later. Courts have limited the scope of what can be covered in a postnuptial agreement because they are mainly meant to determine where assets will be placed in the event of a divorce.
For example, if the court determines that a provision in a postnuptial agreement is unfair or unreasonable to one party or favors one party over the other, they will likely not be able to enforce the agreement. If one party is allotted three quarters of the mutual assets in the event of a divorce and the other party only gets one quarter, courts may see that as biased.
Most postnuptial agreements cannot include custody arrangements or any provisions regarding parental visitation. Family matters, employment, and physical or legal custody issues are not meant to be included in postnuptial agreements because these agreements are specifically intended to cover financial matters.
WhatAre Some Benefits of Postnuptial Agreements?
Despite the stigma surrounding postnuptial and prenuptial agreements, many couples decide to enter such contracts because they understand the benefits they provide. Some of these benefits are difficult to achieve without the help of such agreements.
Financial Security if Divorce Occurs
Considering how many marriages in America end in divorce, many couples decide to enter postnuptial agreements to ensure they will be financially secure in the event of a divorce. A postnuptial can make sure that a person retains their assets and that their money and property cannot be taken by their ex-spouse if they decide to separate.
Passing Assets On
Postnuptial agreements can be instrumental in make sure someone’s children from a previous marriage receive a predetermined part of their assets if they die before their spouse does. Without such an agreement, someone can decide to pass on all their deceased partner’s assets to the children they had together, leaving any previous children without an inheritance.
Proving Your Commitment
In the case of a marriage that is struggling, entering a postnuptial agreement might help someone prove to their spouse that they care about them by ensuring they will not try to take their assets from them if a divorce were to happen.
Peace of Mind
Financial issues are stressful and can be highly taxing on marriages, especially if a couple disagrees regarding their assets. Creating and executing a postnuptial agreement can put those worries to rest, because knowing there is a legally binding and mutually agreed upon document outlining your wishes means they are no longer up for debate.
Need a Postnuptial Agreement? Contact an Attorney Today
If you have questions regarding the process of creating a postnuptial agreement or if you have decided creating one is right for your marriage, contact the Law Office of Alexandra White, P.C. today. Our team understands that marital and financial issues are emotionally taxing and important to get right, which is why we work hard to help all of our clients reach fair and reasonable resolutions to all of their concerns. Contact us today at (303) 647-4245 or via our contact page.