Relationship agreements are contracts between couples that specify the disposition of assets if the relationship ends or upon the death of one member. They include prenuptial agreements, postnuptial agreements, domestic partnership agreements and cohabitation agreements.
Prenuptial Agreements: Prenuptial agreements are contracts couples enter into prior to their marriage. They typically define how the couple wishes to order their finances, specifically addressing separate and marital property. “Separate property” is property each person owns individually, distinct from their joint property. “Joint property” is property they acquire or own together. Separate property consists of inherited property or property that is a gift from one member of the couple’s parents. “Marital property” is usually property the couple accumulates together. Under Colorado law, the value of property inherited or received as a gift is separate property — any increase in value after marriage is marital property. All assets accumulated by the couple during the course of their marriage are also treated as marital property. In order to protect their separate property, many couples agree that inherited property, gifted property, plus all growth on that property, will be treated as separate property. Issues concerning inheritance as well as the disposition of property in the event of a divorce are typically covered under a prenuptial agreement.
Postnuptial Agreements: Postnuptial agreements are marital property agreements entered into after a marriage. As occurs in a prenuptial agreement, a postnuptial agreement defines what is separate property and what is marital property of couples. Additionally, a postnuptial agreement usually addresses issues such as the division of property in the event of a termination of the marriage and rights of inheritance.
Cohabitation Agreements: In Colorado and many other states, common law marriage is recognized. A cohabitation agreement specifically states that a couple does not intend for their relationship to become a common law marriage. Cohabitation agreements can also provide a contractual means of dividing the jointly owned property of the couple in the event of the end of the relationship or the death of one member of the couple. If the relationship ends before a death of a member of the couple, the contract becomes enforceable under state law. In the event of the death of one member of the couple and should that deceased person’s estate planning documents not make provisions for the surviving person as required in the cohabitation agreement, the surviving individual will have a claim against the deceased person’s estate.