Typical Contract Structure
Prenuptial contracts (commonly known as “prenuptial agreements,” or “prenups”) are increasingly used among marriage partners as a way to simplify the property division process in the event of divorce. Prenuptial contracts can predetermine how certain property will be divided if a couple decides to divorce at some point in the future. Today, we will go over a few details on these contracts by examining their structure and requirements more closely.
The structure of prenuptial contracts is very much like the “standard” or typical structure of most other contracts. Prenuptial contracts will include certain necessary information (about the parties, important dates, recitations, etc.) and follow a predictable pattern. The parties will make distinctions between “marital property” and “separate property,” and include specific instructions regarding how property would be assigned in divorce. The prenuptial contract should include instructions regarding debt, as couples often deal with debt in marriage.
In addition, the parties will make reference to spousal maintenance and can make determinations in advance. The contract will reference each spouse’s responsibilities in the context of the marriage and these responsibilities can be as elaborate as the couple wish. For instance, couples can use prenuptial contracts to determine how bank accounts are managed, how other property is managed, how disputes will be handled regarding finances, and so forth. The contract will also indicate that the financial disclosures have been made fully and properly. Furthermore, the contract will include a section on how the contract may be modified, voided, the date of effectiveness, notary signature, witness signatures, and other standard language.
The prenuptial contract will also include reference to which state law will govern the court’s interpretation of the contract.
Colorado Follows the UPAA
In addition to the format, readers should be aware of the formal requirements which govern the enforceability of prenuptial contracts in Colorado. In many ways, prenuptial contracts follow the core principles of the common law of contracts, although Colorado has adopted specific rules on prenuptial contracts from the Uniform Prenuptial Agreement Act (UPAA). The UPAA brings consistency to the rules on prenuptial contracts across the country, similar to the UCC for commercial contracts. Under the UPAA, prenuptial agreements need to meet the following requirements to be enforceable: (1) there must be lack of duress – the acceptance must be completely voluntary, (2) both spouses must have access to legal representation prior to signing, and (3) there must be proper financial disclosures prior to signing.
These are firm requirements, and so Colorado courts will not enforce a prenuptial agreement which doesn’t fully satisfy these requirements.
Guidance on Duress, Disclosures & Representation
When it comes to the enforceability of prenuptial contracts, the parties need to understand clearly how the requirements are construed. In this context, for instance, the term “duress” essentially refers to any sort of pressure or compulsion which materially influences a given person’s decision. A complete understanding of this concept requires reference to case law, which is also the case with the other requirements. If a spouse contends that he or she lacked reasonable access to legal representation, Colorado courts will view the situation in its entirety and then make an individualized determination.
In addition to the three requirements referenced, there is also the requirement of “unconscionability.” This concept also originates in the common law, and refers to the “bargaining power” of the parties relative to each other. This is also an important piece of information which needs to be firmly understood.
The last important topic to note is that a couple cannot have anything in the prenuptial contract that defines what child support will be in the event of divorce. This means while a couple can contract around spousal maintenance, child support will have to be left out.
Contact the Drake Law Firm for Additional Information
If you’d like to learn more, contact the Drake Law Firm today by calling 303-261-8111.