Prenuptial Agreements in Colorado

When it comes to marriage, setting clear terms around finances and responsibilities is important. Marital agreements—contracts made between spouses concerning their marriage—outline how assets, income, spousal support, and other obligations will be handled in case of separation, divorce, or death.

In Colorado, marital agreements signed after July 1, 2014, fall under the Uniform Premarital and Marital Agreements Act (UPMAA), which provides a standardized approach to formation, enforceability, and scope. These statutory guidelines make marital agreements clear, enforceable, and less vulnerable to challenge (C.R.S. § 14–2–301). For agreements created prior to 2014, older rules apply and are not the focus of this blog. Under the UPMAA, couples have a framework for creating financial security, transparency, and mutual respect in the event their circumstances change.

Key Legal Definitions

Marital Agreement: An agreement between two married people that defines their financial rights and obligations, including property division, spousal maintenance, and debt responsibility (C.R.S. § 14–2–302).

Premarital Agreement: An agreement between two people planning to marry, which becomes effective upon marriage (C.R.S. § 14–2–302).

Scope and Application of Marital Agreements

The UPMAA governs all marital agreements executed on or after July 1, 2014 (C.R.S. § 14–2–303). Agreements that were made before this date are subject to previous Colorado law. The scope of marital agreements is comprehensive, allowing spouses to address any financial or property-related matters, including:

Spousal maintenance or alimony terms
Division of property acquired during the marriage
Management of individual and marital debts
Allocation of attorney fees in case of divorce

Marital agreements, however, cannot address issues of child support, custody, or visitation, as these are subject to the best interests of the child standard under separate Colorado statutes (C.R.S. § 14–2–310).

Formation and Requirements for Validity

For a marital agreement to be legally binding in Colorado, it must meet several critical formation requirements:

Written and Signed: The agreement must be in writing and signed by both spouses. Verbal agreements are not enforceable under the UPMAA (C.R.S. § 14–2–306).
Effective Date: The marital agreement becomes effective upon signing by both parties, as long as the marriage is already in place (C.R.S. § 14–2–307).
Independent Legal Representation: While it is not required, independent legal representation for each party is strongly recommended. The presence of legal counsel can protect each spouse’s interests and strengthen the enforceability of the agreement. If either party does not have legal representation, the agreement must clearly explain the rights being waived (C.R.S. § 14–2–309).
Full Financial Disclosure: Each spouse must make a fair and reasonable disclosure of assets, income, and debts. This transparency is essential for informed decision-making and protects against future challenges on grounds of concealment or fraud (C.R.S. § 14–2–309).

Key Provisions in Marital Agreements

Marital agreements allow couples to tailor terms according to their unique needs. Common provisions include:

Property Division: Terms regarding division of marital and separate property in case of divorce, including specifics about real estate, investments, and personal property.
Debt Responsibility: Clauses that specify how each spouse’s debts, including mortgages, loans, or credit card debt, will be handled.
Spousal Maintenance: Pre-agreed terms about spousal support, including duration, amount, and conditions under which maintenance may be modified or waived. Spousal maintenance clauses can offer clarity but must be fair at the time of enforcement (C.R.S. § 14–2–309).
Attorney Fees: Provisions related to attorney fees and court costs, such as whether fees will be shared or covered by one spouse if the agreement is contested in court.
Future Amendments: Marital agreements can specify how future amendments or modifications will be handled, providing a mechanism to adapt the agreement to changing circumstances (C.R.S. § 14–2–306).

Limitations and Unenforceable Terms

Marital agreements, while flexible, are limited by Colorado law in specific ways. Some terms are not enforceable, including:

Child Support and Custody: Terms that affect child support, custody, or visitation are unenforceable. Courts must evaluate these matters based on the best interests of the child (C.R.S. § 14–2–310).
Domestic Violence Protections: Provisions that restrict remedies available to victims of domestic violence are unenforceable (C.R.S. § 14–2–310).
Public Policy: Any clause that violates public policy, such as penalizing a spouse for filing for divorce, is void. Courts retain discretion to strike down provisions contrary to Colorado public policy (C.R.S. § 14–2–310).
Maintenance & Attorney Fees: Under certain circumstances, maintenance and attorney fee provisions may be considered unconscionable, depending on what the terms of the agreement say and the circumstances at the time of divorce. In re Marriage of Ikeler, 161 P.3d 663, 671 (Colo. 2007)

Enforceability of Marital Agreements

For a marital agreement to be enforceable, the following standards must be met:

Voluntariness: The agreement must be entered into voluntarily by both parties. Coercion or duress may invalidate the agreement. An ultimatum that marriage will not occur without signing the agreement does not, in itself, constitute duress under Colorado law (C.R.S. § 14–2–309).
Adequate Disclosure: Each spouse must provide a fair and accurate financial disclosure. A general understanding of each other’s financial situation may suffice, but written details strengthen enforceability. If either spouse is unaware of key financial facts, the agreement can be contested on grounds of inadequate disclosure (C.R.S. § 14–2–309).
Notice of Rights: If a spouse does not have legal representation, the agreement must include a conspicuous notice detailing the rights waived by signing the agreement. This ensures that both parties are fully aware of the impact on their legal rights (C.R.S. § 14–2–309).

Unconscionability and Court Review

Colorado courts review maintenance and support clauses for unconscionability at the time of enforcement. This means that even if a spousal maintenance provision was reasonable when signed, changes in circumstances, such as a significant disparity in income or financial hardship, may render it unconscionable later. Courts evaluate unconscionability as a matter of law, considering factors such as standard of living, income, and the length of the marriage (C.R.S. § 14–2–309).

Considering Changes in Life Circumstances

One of the most critical yet often overlooked elements in marital agreements is the consideration of potential life changes that could impact each spouse’s financial situation or earning capacity. These agreements are often created with assumptions about each spouse’s current financial standing, but circumstances can change dramatically over decades of marriage. Addressing these potential shifts can create a more balanced agreement and reduce the likelihood of a future challenge based on unfairness.

Accounting for Changing Financial Positions

Marital agreements and those people entering into them should consider provisions that acknowledge and adapt to significant life changes, such as:

Disability or Incapacity: If one spouse becomes disabled or incapacitated, their financial needs may increase significantly, and they may no longer be able to work or generate income. Without a provision addressing this possibility, an agreement that assumes both spouses can independently support themselves could place an undue burden on the disabled spouse.
Role Reversals in Financial Standing: The financial circumstances of each spouse may not remain static. An agreement that is fair when one spouse is the primary earner and the other has minimal income may become inequitable if, for instance, the primary earner experiences a career setback or financial loss, while the other spouse’s income or wealth grows substantially.
Stay-at-Home Parent Considerations: If one spouse has been a stay-at-home parent, their contributions, while not income-generating, are significant. Provisions should account for the fact that a stay-at-home parent has foregone earnings to support the family. A clause allowing each spouse to retain their own income may sound equitable but fails to acknowledge the stay-at-home spouse’s lack of independent income.

Amending and Revoking Marital Agreements

A marital agreement can be amended or revoked if both spouses consent in writing. This flexibility allows couples to adapt their financial arrangements as their circumstances change, whether through an addition of new assets or a significant lifestyle change. Amendments must follow the same formal requirements as the original agreement to be enforceable (C.R.S. § 14–2–306).

Practical Considerations for Marital Agreements

Marital agreements offer Colorado couples a structured way to define financial responsibilities and protections. When drafting or reviewing a marital agreement, consider the following best practices:

Seek Independent Legal Advice: Both parties should obtain independent legal counsel to ensure fairness and prevent future enforceability issues.
Full Financial Disclosure: Disclose all assets and liabilities comprehensively to avoid claims of concealment or misrepresentation. You also need to provide disclosure on your income. Lack of disclosure is the primary basis used to challenge premarital agreements.
Plan for Flexibility: Consider including terms for periodic review or amendment, allowing the agreement to adapt to changes.
Focus on Clarity: Use clear and specific language to avoid ambiguity, especially in high-stakes provisions such as maintenance and property division.

Challenging a Premarital Agreement

Challenging a Prenup for Involuntariness or Duress

A premarital agreement can be challenged if one party signed it involuntarily or under duress. In assessing a claim of involuntariness, the court examines all surrounding circumstances, including:

Opportunity to Review and Reflect: Courts look at whether the signing party had enough time to carefully consider the agreement’s terms. Rushed agreements, especially those presented close to the wedding day, are scrutinized closely for voluntariness (see In re Marriage of Ross, 670 P.2d 26, 28 (Colo. App. 1983)).
Sophistication of the Parties: The court will consider the legal and financial knowledge of each party. If a spouse is significantly more experienced in these areas, the other party may argue an imbalance that influenced their decision-making (see In re Marriage of Ingels, 596 P.2d 1211, 1214 (Colo. App. 1979)). Another factor could be a parties’ ability to understand the English language or whatever language the premarital agreement is written in.
Awareness of Waived Rights: Knowing the full extent and value of the rights forfeited is essential to voluntariness. If a party signed the prenup without a clear understanding of what they were giving up, the agreement’s enforceability may be compromised (see Linker v. Linker, 470 P.2d 921, 134 (Colo. App. 1970)).

The phrase “ink on the wedding dress” often comes up, describing situations where one party was presented with the prenup so close to the wedding that they felt pressured to sign without proper review. Colorado courts, however, generally do not view a marriage ultimatum—one partner’s demand to sign or forgo marriage—as duress. A person retains the legal right to choose not to marry at any time, and such demands do not rise to the level of legal duress.

Challenging a Prenup for Inadequate Financial Disclosure

Inadequate disclosure is another basis for challenging a prenuptial agreement. Colorado law requires each party to disclose all known assets, liabilities, and—since July 1, 2014—income. The purpose of this disclosure is to ensure each party understands the financial landscape of the other, enabling informed consent. The primary question is whether the party challenging the agreement had a reasonable understanding of their partner’s financial circumstances when signing the agreement (see Newman v. Newman, 653 P.2d 728, 733 (Colo. 1982)).

Challenging a Prenup for Lack of Legal Representation

For agreements entered into after July 1, 2014, Colorado law added a distinct ground for challenge based on the lack of independent legal representation. If a party didn’t have a lawyer, the prenup must include a clear, plain-language statement outlining the rights and obligations affected by the agreement. Additionally, the spouse without legal counsel must have had “access” to independent counsel, which includes:

Financial Means: The party must have had the resources to hire a lawyer, or the other party must have offered to cover reasonable legal costs.
Reasonable Time: The party should have had ample time to consider whether to hire an attorney, locate one, and obtain and reflect on their advice before signing (C.R.S. § 14–2–309(1)(b); C.R.S. § 14–2–301(2)).

While this provision became law in 2014, a lack of independent legal counsel in agreements from 1986 to 2014 could still be factored into the court’s analysis of whether the agreement was entered into voluntarily.

In addition to these statutory challenges, prenuptial agreements are also subject to common law contract principles. They may be rendered void by legal and equitable defenses, such as fraud or misrepresentation, that could apply to any standard contract.

Conclusion

Marital agreements in Colorado provide a valuable tool for couples to define financial rights and obligations during their marriage. The UPMAA establishes strict requirements for formation and enforceability, ensuring that marital agreements are entered into fairly and voluntarily. By adhering to these standards and seeking legal counsel, couples can create agreements that offer stability, clarity, and peace of mind, while also safeguarding each spouse’s interests in the event of divorce or separation.

Christopher Griffiths is a Shareholder and Chief Financial Officer at Griffiths Law—a law firm specializing in family law and civil litigation.