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Pre-Marital and Marital Agreements

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Requirements for a Colorado Pre-Marital or Marital Agreement

The below are the key components to a Colorado pre-marital (aka prenup) agreement.

  1. In writing and signed by both parties
  2. Voluntary (one party cannot force the other into the contract)
  3. Disclosure of assets and liabilities
  4. Cannot limit or waive child support
  5. May not violate public policy

Choice of Law

Many of us living in the mountains, as the corny saying goes, came for the skiing, but stayed for the summers. With so few Colorado natives, and most of us transplants, what happens when you and your spouse move to Colorado and separate? Will your choice of state law contained in your prenuptial agreement be honored when divorcing?

To answer that question the first step is to determine when it was written and executed. Prenuptial agreements in Colorado have undergone three different phases over the past half a century. If your prenuptial agreement was drafted prior to July 1986 general contract rules regarding choice of law determine which state’s law is to be used.

The majority of individuals divorcing in Colorado will have a prenuptial agreement that was written and signed between July 1986 to June 2014. During that period the Colorado Legislature governed that adults could contract which state’s law controlled their prenuptial agreement. See C.R.S. § 14-2-304(1)(h).  In other words, if you signed a prenuptial agreement that included a provision that California law is to be used when interpreting and enforcing the prenuptial agreement, then a Colorado court will apply California law.

However, on July 1, 2014, Colorado took further action to protect individuals at risk of being harmed at the time of enforcement of their prenuptial agreement. Today, in a prenuptial agreement two people can still contract on choice of law. If you and your spouse had stipulated that California law controls your prenuptial agreement, then a Colorado court will apply California law, if the State of California has a significant relationship to either you, your spouse or the agreement itself. See C.R.S. § 14-2-304(1)(a). If your prenuptial agreement meets those factors then a Court will then check to see if applying California law would be contrary to the fundamental policies of Colorado or unconscionable to any person at the time of enforcement. A prenuptial agreement is unconscionable if it is “not fair, reasonable, and just.” In re Marriage of Christen, 899 P.2d 339 (Colo. App. 1995). Therefore, while you can move to Colorado with a prenuptial agreement and choose the law that controls your prenuptial agreement, after 2014 the State will decide based on its notion of fairness if your choice is honored.

Attacking the Validity of a Pre-Marital or Marital Agreement

The RKV Law Domestic Relations Team has extensive experience attacking or defending the enforceability of a prenup or marital agreement in a divorce. Below are avenues to set aside a prenup or marital agreement.

Change in Circumstances

Although nearly impossible, a spouse seeking to attack the validity of a Colorado prenup may successfully argue that a change in circumstances justifies a court finding that the state’s interest in the welfare of a divorced spouse outweighs the freedom to contract. A court may consider factors such as (a) whether there are children, (b) the length of the marriage and (c) if there was a detrimental reliance on the marriage. But a person considering a Colorado prenup should never assume that a change of circumstances will allow them to wiggle out of an otherwise valid agreement.

Violation of Public Policy

Similar to a change of circumstances, there are several topics where the sanctity of contract will be overridden by Colorado public policy. For example, a provision on child support or religious training for children will be invalidated by a Colorado court. Moreover, agreements where a party waives spousal maintenance or attorneys’ fees may be unenforceable if it would be “unconscionable” under Newman v. Newman and In re Marriage of Ikeler, respectively. Whether a provision is unconscionable is determined at the time of the Colorado divorce.

Fraud, Duress or Undue Influence

A contract must be agreed to voluntarily. The same principle applies to a Colorado prenup. If a person is forced into signing a prenup, it will be unenforceable. Factors such as the time between the execution of the prenup and the wedding, or whether Colorado lawyers are involved will be relevant. But the threat of calling off the wedding is not enough for duress or to invalidate a prenup.

Lack of Disclosure and Independent Counsel

Parties to a Colorado prenup need to disclose their financial circumstances. However, there isn’t a bright-line rule on what is sufficient disclosure for a binding prenup. And as referenced above, lack of independent counsel may be considered when a court evaluates whether parties voluntarily and knowingly entered into the agreement. The best practice is for a party negotiating a prenup to (a) hire a Colorado lawyer, and (b) produce as much detail about their finances as possible. Those details should include bank, mortgage and investment statements,  copies of pay stubs, appraisals for businesses or real estate and information about any contingent or prospective assets such as trusts or inheritances.

 

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