Prenup and Postnup Basics: What Should Your Agreement Include?

First, let’s get the terminology straight.  Prenuptial Agreements (“Prenups”) refer to written agreements signed before a couple gets married.  Postnuptial Agreements (“Postnups”) are executed after a couple gets married and are only appropriate if there’s no divorce on the horizon.  In Colorado, both types of agreements are considered “Marital Agreements” and are governed by Colorado Revised Statutes §14-2-301 et seq.

So, what should you include in a Prenup or a Postnup?  The possibilities are numerous and depend mostly on what you and your fiancé(e) or spouse want to address.  Work with your partner to make a list of the issues that are important to you, and take that list to your lawyer to work brainstorm how to achieve your goals.  Keep in mind that Marital Agreements can deal with what happens if you divorce and/or one of you passes away before the other.  Some folks choose to deal only with the divorce scenario and leave death issues to their wills.  But, there can be implications to that choice that should be discussed with a lawyer.

To help you generate ideas, here are some examples of things clients sometimes want to address in their Marital Agreement:

Real Estate:  What do you want to happen with your home, rental properties, vacation homes, or other real estate?

Maintenance:  Will one of you receive maintenance (also known as “alimony”) from the other person?  If so, do you want to specify how much and for how long?  Or, do you want the then-existing law to apply?

Retirement:  How will retirement assets be handled?

Trusts:   Do either of you own any interest in a trust?  If so, what kind of trust is it? Different types of trusts involve different types of ownership rights and interests.  Your Prenup or Postnup should identify the trust interest and describe what will happen to it if there’s a divorce.

Income Earned During Marriage:  Will all income earned during marriage be considered “marital”?  Or, will some or all of it be considered either person’s “separate” property?

Debt:  If there’s any debt in either of your individual names, will that debt be divided between you?  How?  If there’s jointly titled debt, what will happen to that?

Premarital Assets:  How will any increase in the value of premarital assets be divided, if at all?  What about premarital asset income?

This list is not exhaustive, so feel free to raise whatever issues are important to you and your partner.  Your lawyer can help you evaluate whether and how to address each issue in a Prenup or Postnup.