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September 6, 1999: Pre-Nuptial Agreement Guidelines

Q: The jolly joking jockeys on a radio program the other day were taking calls about "interesting" things that maybe should be included in a prenuptial agreement. I will leave it to your imagination as to the various suggestions that were called in. But I find it difficult to believe that any of that kind of thing belongs in such a document.

A: I seem to be getting a number of media generated questions lately. As stated in my last column, what makes good entertainment material usually has little to do with the real legal world.

Here in Colorado a nuptial agreement is meant to cover very specific areas in the legal relationship between spouses. The document can be either a prenuptial agreement, sometimes called an ante –nuptial agreement (signed before marriage), or a post-nuptial agreement (signed after marriage) and can cover a possible future divorce and/or the distribution of assets upon death.

In very, very general terms, assets are not part of the divorce estate if they were either brought into the marriage or inherited by one spouse and not "tainted" –title remained exclusively in the name of that spouse. The term separate property is sometimes used to identify these assets. The nuptial agreement is intended to resolve issues such as who is entitled to ownership of "tainted" assets, earnings and appreciation of the separate property, and ownership of the property acquired during marriage. Other issues such as spousal support (alimony) but not child support which is dictated by statute, tax issues, reimbursement for past services (such as putting hubby or one's better half through law school), etc., can be covered. Of course, a nuptial agreement can be more complex than the foregoing general summary but I think you get the idea of the traditional areas covered. Sex, toilet seat positions, color of cars, cooking obligations, etc. really do not fit in very well with a nuptial agreement's intended purposes.

For inheritance purposes, a few years ago the moment two people married, each gained an "elective share" (dower and courtesy rights in common law) of one-half of the other's property regardless of what was sought to be accomplished in a Will (hence the legal chestnut that holds one can disinherit everyone in the whole world except a spouse).

The law changed a few years ago so now the "elective share" against the "augmented" asset estate is now 20% of ˝ of the property during the first year of marriage, increasing 20% each year, until by the fifth year of marriage, the right is 100% of the entire ˝ and it is fully vested. A nuptial agreement is intended to modify each spouse's right to receive up to half of the "property." In other words, a nuptial agreement is a partial or total voluntary waiver of that statutory right not to be disinherited.

Because the agreement is so important, Colorado has several guidelines in attempting to make the nuptial agreement "bullet proof." To be certain of coverage, assets sought to be protected need to be listed and approximate values need to be disclosed. That eliminates later arguments such as if I only knew that such an item was owned, I would never have agreed, or if I knew the values, I never would have signed.

Then one of the two people involved needs to take the document to another attorney who will review the document from that person's point of view, explain the legal consequences of signing the agreement, and maybe suggest modifications. This is not an example of "make work" for attorneys. It is intended to undercut later arguments such as the attorney really represented my partner not me, or the attorney never explained that that would happen.

Since Colorado is basically a no-fault state, the foregoing fundamentals of the law make the pundit's pronouncements pointless for a Colorado nuptial agreement. Only one attorney among several who I contacted suggested that such provisions might affect spousal support or serve as the grounds for monetary reimbursement but she quickly added that that would be a reach.

So at least in Colorado nuptial agreements are basically boring yet legally significant documents, the normal provisions of which probably would make for a deadly dull radio program.

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