People often associate the term prenuptial agreement with wealthy couples who still somehow end up involved in long, drawn-out divorce cases. Yet a prenup is not just for the wealthy. Indeed, even if you do not believe you and your future spouse need a prenuptial agreement, there are many valid reasons to consider making one, regardless of the size of your asset portfolio right now.
Here are five things to consider about having an Illinois prenuptial agreement:
1. A Prenuptial Agreement Can Serve as Insurance Against a Complicated Divorce
Obviously, nobody enters into a marriage thinking it will fail. But we all probably know someone who has been divorced. In fact, you or your current partner may have already been through an especially nasty divorce.
Having a prenuptial agreement in place can help to ensure a more amicable resolution of your divorce should the need arise. In this sense, a prenup is no different than any other kind of insurance. After all, you do not buy an auto insurance policy because you expect to be in an accident. But if an accident does occur, you are glad to have the coverage. In a similar sense, a prenup can actually reassure you that if something unexpected happens and your marriage falls apart, most if not all outstanding legal issues are already resolved without the need for complicated–and potentially expensive–litigation.
2. A Prenuptial Agreement Can Serve as a Critical Part of Your Estate Planning
Estate planning and divorce are similar in many respects. Both types of law address how to distribute property when a certain event occurs (divorce or death). In Illinois, the law also provides a set of legal defaults that apply if the parties have not made advance arrangements. In the case of estate planning, for instance, if you do not have a will, then state law decides who gets your assets after you die. Along those same lines, Illinois divorce law establishes rules for how to divide property if spouses separate and cannot agree on what to do next.
Viewed in this light, a prenuptial agreement serves much the same function as a last will and testament. It really does not matter how much you own. Plenty of people make wills even if they are not currently wealthy. The same logic can apply to having a prenuptial agreement: It is not about how much you own, but rather simply making your own choices on what to do if the worst happens.
Another way that estate planning and prenuptial agreements can overlap is when it comes to dealing with “mixed” families. That is to say, if you have children from a prior marriage, a prenup can ensure certain property is preserved for their benefit and does not go to your new spouse or their own children. While a will or trust can accomplish similar goals, a prenup can demonstrate you and your spouse are clearly on the same page when it comes to these issues. And in fact, many prenuptial agreements include provisions requiring each spouse to make necessary provisions in their estate planning documents to carry out the terms of the agreement.
3. A Prenuptial Agreement Allows Spouses to Clearly Separate Marital and Non-Marital Assets
Illinois is not a “community property” state. This means that in the event of a divorce, the law does not presume a 50-50 division of any property acquired during the marriage. Instead, a judge must make an “equitable division” of any marital property, taking into account a number of factors.
Many divorce cases actually get caught up in deciding what assets are, in fact, marital property. A prenuptial agreement can help clarify matters. As a general rule, each spouse retains sole ownership of any assets they bring into the marriage. But there may be situations where a spouse wants to classify their personal property as marital property and vice versa. A prenuptial agreement can clearly delineate marital and non-marital property, which in turn can make it much easier to facilitate an equitable division in the event of a divorce.
One scenario where this can be especially important is if either spouse owns or decides to start their own business. If the other spouse is not involved in the business, it often makes sense to classify it as a non-marital asset. At the very least, a prenup can ensure the business will not get caught up in any potential divorce proceedings.
4. A Prenuptial Agreement Can Help Prevent Any “Surprises” Before the Wedding Day
It is often overlooked, but one of the key functions served by a prenuptial agreement is the requirement for each future spouse to disclose all of their assets and debts. Ideally, this means there are no financial “surprises” after the marriage takes place. This can be especially helpful when it comes to issues involving debts. While spouses are typically not responsible for debts incurred by the other spouse prior to marriage, a prenup can make this crystal clear to any potential creditors.
Also, keep in mind, if either spouse fails to disclose their assets or debts, it can invalidate the entire prenuptial agreement. It is possible for a spouse to waive their right to receive the other spouse’s financial information. But that waiver should always be made in writing, either separately or as part of the prenuptial agreement, and it cannot be the product of duress. In other words, one spouse should never pressure the other into “taking their word for it” and agree to sign a prenup without a full, good-faith disclosure of assets and debts.
5. A Prenuptial Agreement Can Protect a Stay-at-Home Parent
It is not uncommon for one spouse to quit their job or place their career on hold after marriage to serve as the primary caregiver for the couple’s children. Having a prenuptial agreement in place can ensure this spouse is not punished for their sacrifice. Illinois prenuptial agreements commonly provide for spousal maintenance (i.e., alimony) for the stay-at-home spouse. Such payments can provide an important financial cushion for that spouse should they suddenly need to re-enter the workforce after a divorce.
Of course, even without a prenuptial agreement, an Illinois judge can still order one spouse to pay alimony to the other spouse. But as discussed above, a prenup can help avoid the need for a contested divorce proceeding. And for the spouse looking to rebuild their career and financial independence, a prenup can provide an important lifeline–and remove a potential barrier to ending an unhappy marriage.
What You Need to Know Before Signing a Prenuptial Agreement
So as you can see, prenuptial agreements are not just for the wealthy. They can benefit any couple looking to guard against the potential risks of a failed marriage. Even if you and your partner elect not to have a prenup, you should still discuss the matter, as it can facilitate better communication and a stronger relationship heading into a marriage.
You also must understand that if you and your partner do decide to make a prenup, you are entering into a binding legal contract. A prenuptial agreement is not something that should be entered into lightly or casually. You both need to consult with your own separate attorneys. And you need to be aware of the legal formalities accompanying the prenup.
Once the prenuptial agreement is signed, it will generally be enforced by an Illinois court in the event of a divorce. There are, however, exceptions to the general rule. As noted above, if either spouse concealed assets or debts–i.e., committed fraud–that alone can invalidate the entire prenup. Additionally, if a judge finds that either spouse used duress–made threats–to get the other spouse to sign, that can also be grounds for throwing out the agreement.
Finally, there are situations where a judge may decide the actual terms of a prenuptial agreement are so “unconscionable” that they cannot be enforced under Illinois law. This does not mean, however, that a judge will alter or invalidate a prenup simply because one spouse now complains the terms are “unfair.” Again, once you sign the prenup it is generally binding for the duration of the marriage absent unusual evidence of unconscionability, fraud, or duress.
Speak with a Naperville and Bolingbrook Family Law Attorney Today
You would never sign a business contract without consulting a qualified attorney. The same should be true of a prenuptial agreement. Both you and your future spouse will benefit from speaking with a qualified Naperville and Bolingbrook family law attorney before deciding whether a prenup is right for your situation. Contact Keller Legal Services today to schedule a confidential consultation with a member of our family law team. We serve clients throughout the Will County and DuPage County area.
