Chapter 5 - § 5.5 • PROPERTY SETTLEMENT AGREEMENTS
| Jurisdiction | Colorado |
Colorado recognizes two types of property settlement agreements: (1) nuptial or marital agreements31 and (2) separation agreements.32
§ 5.5.1—Marital Agreements33
Marital Agreements Signed Before July 1, 2014
A marital agreement is an agreement either between prospective spouses in contemplation of marriage or between present spouses, but only if signed by both parties prior to the filing of an action for dissolution of marriage or for legal separation.34 Thus, a marital agreement signed during the pendency of a dissolution proceeding is invalid even though the dissolution proceeding is subsequently dismissed.35 A marital agreement must be in writing and signed by both parties. It is enforceable without consideration.36 It becomes effective upon marriage, if signed by both parties before marriage, or upon the signatures of both parties, if signed after marriage.37 After a marital agreement becomes effective, it may be amended or revoked only by a written agreement signed by both parties. The amended agreement or revocation is enforceable without consideration.38
Marital agreements provide a means by which parties can arrange their affairs, both prior to and subsequent to marriage, and are fully consistent with public policy.39 A marital agreement may cover the rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located; the acquisition, disposition, management, and control of any property; the disposition of property upon separation of the parties, dissolution of the marriage, death of either party, or the occurrence or nonoccurrence of any other event; the determination, modification, or elimination of spousal maintenance; the making of a will, trust, or other arrangement to carry out the provisions of the marital agreement; the ownership of rights in and disposition of the death benefits from a life insurance policy; the rights and obligations in benefits available or to be available under an employee benefit or retirement plan, except to the extent federal law prevents a binding agreement with respect to such rights and obligations;40 the choice of law governing the interpretation of the agreement;41 and any other matter, including the personal rights or obligations of either party, not in violation of public policy or any statute imposing a criminal penalty.42
C.R.S. § 14-2-302(3) provides: "'Property' means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings."
Unless the marital agreement provides to the contrary, a waiver of "all rights upon death" (or equivalent language) in the property or estate of a present or prospective spouse is a waiver of all rights to an elective share, exempt property, family allowance, and homestead exemption of the waiving party in the property of the other; a waiver of the statutory priority of the waiving party to serve as personal representative, executor, or administrator of the estate of the other; and a renunciation and disclaimer by the waiving party of all benefits that would otherwise pass to him or her from the other by intestate succession or by virtue of the provisions of any will executed before the marital agreement.43 Prior to the enactment of the Marital Property Act, it was held that a widow's allowance could not be waived in a nuptial agreement except, perhaps, in terms that did not admit of doubt.44
Even prior to the enactment of the Marital Agreement Act, marital agreements were held valid and enforceable and were generally given full force and effect45 whether the parties' marriage was terminated by death or by dissolution. It is recognized, however, that the parties to a marital agreement do not deal at arm's length. Rather, a confidential relationship exists between them, and each has a responsibility to act with good faith and fairness to the other. Such a responsibility contemplates that each party will make fair disclosure of his or her assets to the other spouse or prospective spouse prior to the execution of the agreement.46
Marital agreements may be set aside on any of three distinct grounds:
1. The agreement is unenforceable if a spouse establishes that it was entered into as a result of fraud or concealment.47
2. Even where fraud or concealment is not established, the agreement may be set aside if one spouse fails to make a fair disclosure of all relevant information, but a list of assets is not necessary.48 Fair disclosure is not synonymous with detailed disclosure such as a financial statement of net worth and income. Where the agreement was freely executed, the fact that one party did not disclose in detail to the other party the nature, extent, and value of his or her property will not alone invalidate the agreement or raise a presumption of concealment. Fair disclosure contemplates that each spouse should be given information, of a general and approximate nature, concerning the net worth of the other. Each party has a duty to consider and evaluate the information received before signing an agreement.49 In estate proceedings, where there is a claim that the surviving spouse has waived his or her rights, the legislature has codified the fair disclosure requirement. C.R.S. § 15-11-207(1) provides:
The rights of election of a surviving spouse and the rights of the surviving spouse to exempt property, family allowance, and the decedent's homestead may be waived, wholly or partially, before or after marriage, by a writing signed by the waiving party after fair disclosure.
3. The agreement will not be enforced if it is determined to be unreasonable at the time it was entered into.50 An agreement is not invalid merely because there is a disparity in the respective values of the assets held by each spouse.51 Rather, the terms of the agreement must be so unfair and the parties' bargaining positions so disproportionate as to render the agreement unconscionable.52
Once the proponent of a nuptial agreement has...
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