Prenuptial agreements: Are any other legal documents subject to more controversy and misunderstanding? Prenuptial agreements, also called premarital agreements or “prenups,” are legal contracts that a couple signs before getting married. Many people grossly misunderstand the purpose of a prenuptial agreement. They assume that only couples who do not believe in the longevity of their marriage would sign a prenuptial agreement or that prenups are only used by wealthy husbands to prevent their wives from pocketing their wealth.
In reality, drafting a mutually beneficial prenuptial agreement is one of the most responsible and practical steps you can take before getting married. Prenups serve a wide range of purposes, including protecting both spouses’ property rights, avoiding stressful litigation in the event of divorce, and describing how property should be distributed if a spouse passes away.
Does Signing a Prenup Mean We Plan to Divorce?
Prenuptial agreements serve many different functions. However, the top goal of most prenuptial agreements is to describe and protect each spouse’s property rights in the event of divorce. If you are currently engaged, you may be busy compiling the guestlist for the wedding, picking out a wedding cake, and choosing a honeymoon destination. The last thing you probably want to think about is the possibility that your marriage may not last forever.
While this is understandable, it is important to remember that preparing for the worst-case scenario is something that fiscally responsible adults do in multiple areas of their lives. If you drive a car, you almost certainly have auto insurance. Does this mean that you doubt your abilities as a driver or plan to get into a wreck? Of course not. However, the reality is that about 40 to 50 percent of marriages do ultimately end in divorce. Just as it is important to prepare for the possibility of being in a car crash or suffering a serious injury or illness, it is important to prepare for the possibility of divorce. To be clear, signing a prenuptial agreement does not mean that you do not love your fiancé or doubt the marriage’s longevity.
Is a Prenuptial Agreement Beneficial Even If a Couple Stays Together?
Many people wonder, “Is a prenuptial agreement beneficial even if we do not divorce?” While most provisions in a prenuptial agreement do address divorce issues, this does not mean that a prenuptial agreement is pointless if you stay together.
Premarital agreements are also useful for estate planning purposes – especially in situations involving blended families and remarriages. A prenup allows you to identify what property is contained in the marital estate and what property is separate property owned by only one spouse. Prenuptial agreements are often used to identify certain assets or important family heirlooms as separate property so that the assets are passed down to the decedent’s children instead of his or her spouse upon his or her death.
Another key benefit of drafting a prenuptial agreement is that it gives each party a clear understanding of the other party’s finances. Money-related arguments are consistently cited as one of the top causes of divorce. Countless marriages have been rocked by the discovery of hidden debts or undisclosed financial secrets.
To build a prenup, each spouse will need to fully disclose his or her property, debts, and income. This ensures that both spouses have the information they need to make informed decisions about the components of the prenup. Consequently, creating a prenuptial agreement forces spouses to honestly discuss financial issues before they ever walk down the aisle. This builds a foundation of financial honesty and transparency in a way that little else could. When engaged couples have difficult discussions about finances before getting married, they enter into the marriage fully informed about financial concerns and ready to build an honest, successful relationship.
What Types of Issues Can a Prenup Address?
Prenuptial agreements allow a couple to decide in advance how property division concerns and other issues are handled in the event of divorce. These valuable legal instruments also allow the couple to address debts, spousal maintenance or alimony, inheritance, and several other key issues. Prenuptial agreements can:
Determine The Identity of Assets and Debts – Illinois follows a legal doctrine called “equitable distribution” in divorce cases. Unlike in community property states, Illinois courts do not divide property 50/50 in the event of a contested divorce. Instead, the court divides property in a way that is fair with regard to each spouse’s financial circumstances, employability, health, and several other factors. Only marital property is divided in an Illinois divorce. Property that has been identified as separate property or non-marital property is not divided and is instead assigned to the spouse who originally owned the asset.
A prenuptial agreement allows you to determine in advance what property is considered separate and what is considered jointly-held marital property. This ensures that, if the marriage does end in divorce or the death of a spouse, that the appropriate spouse retains the right to the property identified as separate property. Prenuptial agreements are especially useful for spouses who own:
Art, jewelry, antiques, or collectibles
Stock options or profit shares
Assets that want to keep in the family
Prenuptial agreements also address the identity of debts and liabilities. Consequently, prenuptial agreements are often utilized when a party enters the marriage with significant debt. If you or your spouse have student loans, credit card debt, medical debt, or other liabilities, a prenuptial agreement can ensure that the spouse who obtained the debt is responsible for the debt.
Describe a Spouse’s Right to Alimony – Spousal maintenance, sometimes called alimony, refers to payments that a spouse makes to the other spouse after a divorce. Both men and women may receive spousal maintenance. Typically, spousal maintenance is used to help a spouse cope with the negative financial consequences caused by the divorce. Spousal maintenance is often a factor in marriages involving:
A significant disparity in income
A high standard of living
An especially long marriage
A spouse who sacrificed career advancements or opportunities to act as a homemaker or stay-at-home parent
A spouse who helped the other spouse finance educational degrees or allowed the spouse to pursue education or career development by managing other responsibilities
A spouse who cannot work or has a limited earning capacity due to a disability
A spouse who would need time to earn the training or job skills needed to become financially independent after a divorce
Divorcing couples have the right to arrange their own spousal maintenance agreement or they may seek a determination from the court. However, litigating a spousal maintenance arrangement is often complicated, stressful, and expensive. This is why many couples decide on spousal maintenance terms in advance by utilizing a prenuptial agreement. Your prenuptial agreement may:
Waive a spouse’s right to receive maintenance entirely
Determine the amount of maintenance a spouse is awarded
Determine the duration of maintenance payments
Place conditions on spousal maintenance
Limit the amount or duration of maintenance payments
It is important to note that Illinois courts may not uphold spousal maintenance provisions that create an undue hardship on a spouse. Per the Illinois Uniform Premarital Agreement Act, if spouses agree to maintenance terms, but those terms become unreasonable due to unforeseen circumstances, the court may not uphold the agreement. For example, suppose you agreed to pay a certain amount of money in spousal support based on your income when you signed the prenup. Later, you suffered an injury that left you disabled and unable to work. Your income is now considerably lower. In this case, the court may not uphold the original spousal maintenance provision because to do so would place an undue financial hardship on you.
Spouses Property Rights – A prenuptial agreement may also address each spouse’s property rights. The document may spell out how and when a spouse can transfer, sell, or use the property. A prenup may also address a spouse’s right to life insurance benefits and a spouse’s pension.
What May Not Be Included in a Prenup?
Prenuptial agreements cannot address child support or child custody. They may not contain provisions that are unconscionable or grossly unfair. Aside from these limitations, couples are free to include whatever provisions they see fit. Some couples use their prenuptial agreements to define the spouses’ right to the family pets, confirm their child’s education or religious upbringing, or even limit the amount of time the couple spends with their in-laws. An experienced family law attorney can help you ensure that the provisions you include in your prenuptial agreement will be legally enforceable.
What is Required for a Prenuptial Agreement to Be Valid in Illinois?
Prenuptial agreements must meet certain requirements to be valid. Part or all of the agreement may be unenforceable if you do not follow these rules:
The agreement must be in writing
The agreement must be signed by both parties
Both parties knowingly consented to the agreement and were not forced, coerced, or tricked into signing the document
Both parties fully understood what they were agreeing to and had ample time to consider the agreement before signing it
Both parties made full and accurate disclosure of their assets and debts
The document is voided if the couple calls off the engagement and chooses not to get married. Additionally, provisions that are extremely one-sided, unreasonable, immoral, or unlawful will not be upheld by the court. The document may be invalidated entirely if a spouse agreed to the prenup under duress, while under the influence of drugs or alcohol, or without reading and understanding the conditions of the agreement. A prenuptial agreement may also be invalidated if a spouse lied about or withheld financial information during the creation of the agreement.
How Can I Introduce the Idea of a Prenuptial Agreement to My Partner?
If you are like many people considering a prenuptial agreement, you may wonder how to bring up the subject with your soon-to-be spouse. Your fiancé will most likely have a multitude of questions and possibly a few concerns. Fortunately, you do not need to have the answers to these questions yourself. Reach out to a family law attorney for help. The better informed you are, the better position you will be in to discuss the issue with your partner.
Remind your spouse that, although it is sad to consider, all marriages eventually end. Whether your marriage ends in divorce or the death of a spouse, preparing now will save ample time, money, and energy in the long run.
Contact an Elmhurst Prenuptial Agreement Lawyer
Prenuptial agreements or prenups are valuable legal tools that serve a range of purposes. If you would like to learn more or are ready to get started, contact an experienced DuPage County family law attorney from Weiss-Kunz & Oliver, LLC. Call us at 312-605-4041 for a confidential consultation.