5 Things to Consider Before Marriage
Marriage is an exciting, personal commitment, but it is also a legally binding partnership with financial implications. Understanding the long-term legal and financial considerations before marriage can help protect both parties and avoid potential disputes in the future. There are several issues to consider, evaluate, and discuss with your partner before getting married.
1. The Value of Premarital Assets at the Date of Marriage
Under Colorado law, property acquired before a marriage is typically considered separate property, but clear documentation is required to maintain this distinction. Identifying the value of personal assets at the time of marriage can help preserve their separate status in the event of divorce. Examples of personal assets might include real estate, investments, family heirlooms, or a business. Properly documenting these assets and values provides clarity and can prevent disputes if the marriage ends.
Consider obtaining a professional appraisal of assets before the marriage and keep these records for future reference. This documentation can serve as evidence to establish the premarital status of these assets under Colorado’s marital property laws.
2. The Amount of Debt Each Spouse Brings to the Marriage
Debts acquired before the marriage, such as student loans, credit card balances, or car loans, typically remain the responsibility of the individual who incurred the debt. Transparency regarding debts is crucial for mutual understanding of the amount of debt and effective financial planning. Couples should also understand how state laws address the division of marital and separate debts in case of divorce.
Consider sharing complete financial disclosures with your partner, including credit reports and loan agreements. Consult a financial advisor or attorney to clarify how debts can be – or should be – handled during the marriage.
3. The Protection of Property Ownership or Family Monetary Gifts
In Colorado, property and money acquired by gift or inheritance are considered separate property. However, protecting these assets requires careful planning and clear boundaries. Without appropriate measures, separate property may become marital property and be subject to division in a divorce.
Property Acquired by Gift or Inheritance
Real estate received as a gift or through inheritance may have its separate property status jeopardized if marital funds are used for mortgage payments, taxes, or improvements. These actions can commingle the property, making it partially marital and subject to division. To protect gifted or inherited property, maintain clear records of ownership, and avoid using marital funds for any upkeep or enhancement. If improvements or financial contributions are made during the marriage, document these actions to distinguish them from matrimonial contributions.
Money Acquired by Gift or Inheritance
Monetary gifts or inheritance can similarly lose their separate status if they are deposited into joint accounts or used for shared expenses. For instance, using inherited funds for a joint home down payment or shared financial obligations may convert them into marital property. To preserve their separate nature, keep gifted or inherited funds in individual accounts and avoid commingling them with matrimonial finances. Clearly document the origin of these funds and ensure they are used in alignment with your intentions.
Consider drafting a prenuptial agreement that outlines how property and monetary gifts will be treated in the event of a divorce. If a family member provides a significant gift intended solely for one spouse, create a legal agreement specifying its purpose and ownership. Keeping detailed records and maintaining separate accounts are critical steps in safeguarding these assets under Colorado law.
4. The Waiver of Rights to Spousal Maintenance in Case of Divorce
Colorado courts allow couples to waive spousal maintenance obligations in prenuptial agreements, provided the terms are fair and reasonable at the time of enforcement. However, waiving maintenance should be approached cautiously, as unforeseen life changes may alter financial needs. Waiving maintenance might seem appropriate when both parties are financially independent, but unexpected changes in life circumstances, such as job loss or health issues, may make such agreements problematic.
Consider consulting an attorney familiar with Colorado’s spousal maintenance laws to ensure any waiver or limitation is enforceable and fair. Be aware that courts may reject such provisions if they are deemed inequitable.
5.The Impact of Children on Career Path and Compensation
Starting a family may affect the professional trajectories of one or both spouses. In Colorado, the courts consider the economic consequences of childcare decisions when dividing marital property or awarding maintenance. If one partner takes time away from their career to focus on childcare, they may experience reduced earning potential and retirement savings. This can create financial disparities between the partners. Discussing these possible changes and planning for them in advance is essential. Agreements can include compensating the stay-at-home spouse through retirement contributions or ensuring equitable division of assets in the event of divorce.
Plan Your Financial Future with the Team at Divorce in Colorado
Marriage is both a personal commitment and a legal partnership. By proactively addressing these five areas in a prenuptial agreement, couples can build a strong foundation for their future while protecting their individual interests. Legal professionals who understand Colorado’s specific laws can help to ensure that agreements are comprehensive, fair, and enforceable.
At Divorce in Colorado, we specialize in Colorado family law, including prenuptial agreements, asset protection, and inheritance planning. Whether you’re looking to preserve inherited property, safeguard gifts, or draft a comprehensive prenup, our experienced team is here to help. Contact us at 720-966-2412 for a complimentary consultation.