Do you need to get a prenuptial agreement?
Let me answer that question with another question and an analogy: are you the type of person that gets a flu shot? If you’re a school teacher and you’re around kids all the time, then yes, you should get a flu shot. If you’re a retired person who doesn’t get out much, you probably don’t need the shot as much.
But every doctor will tell you to get a flu shot, whether you expect to be exposed to the virus or not. “Better safe than sorry!” is the motto, and the same principle applies to prenuptial agreements, in my opinion. [Technically, Colorado law calls these marital agreements. However, everyone knows them as pre-nups.]
It’s Better to Have One and Not Need It…
…than to need one and not have it. Of course, I’m now talking specifically about prenuptial agreements once again. And believe me when I say that I have seen my fair share of divorces-gone-sour when there isn’t a clear and enforceable prenuptial agreement in place (which is most of the time).
That said, there are circumstances in which a prenuptial agreement is clearly necessary, and here are some examples:
When there is a substantial disparity in your financial situations at the time of marriage, a prenuptial agreement is highly recommended. For instance, if one spouse has substantially more pre-marital property than the other, it’s a good idea to put an agreement in place.
Changes are on the Horizon
A prenup is advisable if you anticipate significant changes in one or both of the spouses’ lives (say, if one spouse is in medical school and will likely be earning half a million dollars in a few years). Or, if someone is likely to inherit a lot of money at any point in the future, a prenuptial agreement is very helpful.
Another situation where prenuptial agreements are very helpful is when one (or both) spouses carry significant debt. The pre-nup can specify that the spouse who accrued the debt before the marriage is solely responsible for the debt upon divorce.
Prenuptial Agreements Offer Clarity
In my experience, not only does a prenuptial agreement provide a binding legal agreement between the parties in relation to their financial situation and how they will divide assets and debts should they divorce, but it also clears up any money-related confusion that may be present in the relationship.
For instance, if one spouse makes a decent income and has no debt but the other spouse has significant debt and makes very little money, a prenuptial agreement will clear up any false expectations. Say, if the indebted spouse expected that the new partner would pay off the debt on his/her behalf, but he/she wasn’t planning to, simply going through the process of getting the prenuptial agreement in place will clear up those misconceptions.
I have seen the difference between a divorce with a pre-nup agreement in place and one without: typically, those with an agreement part ways much more quickly and much more amicably (and more affordably). Those without an agreement tend to become swayed by their emotions and make unreasonable demands in the separation. When the parties are getting along (at the time of the marriage), they agree to reasonable terms. When they are not getting along to the extent that they’re getting a divorce, one or both of the parties is far more likely to view things from a one-sided perspective and be far more unreasonable.
That is why I highly recommend that marrying couples create a prenuptial agreement. If you are already married, you always have the option to put a postnuptial agreement in place.
If you would like more information or assistance in this process, call us at 303-449-1873 to set up a free consultation.