What Benefits Can a Prenuptial Agreement Provide to a Couple?

 Posted on February 21, 2022 in Division of Assets

If you are preparing to get married, you will have a lot to consider as you plan for your life together with your future spouse. When there are many different issues related to your wedding that you will need to address, as well as plans for changes to your life as you combine your finances and prepare to live together, the possibility of a divorce is likely to be the last thing on your mind. Even if the idea that your marriage may not last may be unthinkable, you should still consider this possibility and make plans for how you and your partner will handle matters if you do choose to get divorced in the future. You can do so by creating a prenuptial agreement, and even if divorce never becomes an issue, this type of agreement can benefit you and your spouse in other ways as well.

Prenuptial agreements in Illinois are governed by the Uniform Premarital Agreement Act. Illinois law uses the phrase "premarital agreement" but the term prenuptial agreement is still sometimes used informally. 

As you consider how to address legal and financial issues as you prepare to get married and determine the best ways to protect yourself, Weiss-Kunz & Oliver, LLC can provide invaluable legal help. We will make sure you understand your rights and options, and we will work with you to negotiate an agreement that will fit your unique situation. With our help, you can make sure both you and your partner fully understand the issues you plan to address, the decisions you make, and the benefits a prenuptial agreement can provide to you throughout your marriage.

What Issues Can a Prenuptial Agreement Address?

Premarital agreements, often referred to as “prenups,” are legal agreements similar to contracts. As the prefix “pre-” indicates, a prenuptial agreement is created and signed before a couple gets married. However, the agreement will not become legally binding until the couple’s marriage becomes official. Once the couple is legally married, the prenup will go into effect, and its terms will be followed if the couple chooses to get a divorce in the future. A prenup’s terms may also apply in other situations, including a legal separation or the death of one spouse.

A prenuptial agreement will generally address issues related to a couple’s property and finances. Illinois law details the terms that can be included in a prenup, and these include:

• Property rights - A couple can make decisions about each party’s rights toward the property they own, including property owned by either partner before getting married and marital property they acquire during their marriage. A prenup may state that certain assets will continue to be considered separate property during a couple’s marriage. A couple may also include any provisions detailing each party’s rights regarding different types of property, including the right to buy, sell, transfer, manage, use, control, or dispose of different assets. An agreement may address any and all assets owned by the couple together or separately, including property that may be acquired in the future and items located in other states or countries.

• Property division in the case of divorce - In the absence of a prenuptial agreement, Illinois law requires a couple’s marital property to be divided fairly and equitably during a divorce. However, a prenup can make decisions about how property will be divided, and the terms of an agreement will be followed during the divorce process, even if this will result in an unequal division.

• Spousal maintenance - When a couple gets divorced, one spouse may ask for financial support from the other spouse to ensure that they will be able to maintain the standard of living they enjoyed during their marriage. Without a prenup, a court may consider a number of factors to determine whether spousal support should be awarded, including each party’s needs and financial resources. If a couple chooses to address this issue in a prenuptial agreement, they can specify whether spousal maintenance will or will not be paid in certain situations. An agreement may also state the amount of support that will be paid, the duration that these payments will last, and any other factors that may affect these payments.

• Estate planning issues - A prenup may state that certain instruments will be used to carry out the terms of the agreement. A couple may agree that they will create wills for each partner that detail how a person’s assets will be allocated to their spouse or other parties after their death. A prenup may allow for the creation of a trust that will hold assets and ensure that they are distributed properly according to the terms of the agreement. A prenuptial agreement may also detail each party’s ownership rights toward death benefits of life insurance policies.

• Choice of law - If disputes arise in the future regarding the terms of a prenuptial agreement, a couple may be unsure about where their case will be heard, especially if they move to a different county or state in the future. A prenup may state that the laws in Illinois or another state will apply during a potential divorce or they may agree that their case will be litigated in the courts of the county where they currently live.

In addition to the issues detailed above, a couple may include any other decisions they like in their prenuptial agreement, as long as these terms are not in violation of the law and do not go against public policies regarding divorce and family law matters. However, decisions about the custody of a couple’s children generally cannot be made in a prenup. This is because courts will determine how to make decisions on these issues based on what is in children’s best interests. Since it is impossible to determine what would be best for children in advance, these decisions will be made at the time of a couple’s divorce or separation. Similarly, a prenup cannot reduce or eliminate the child support that a parent would be required to pay. Children have the right to receive sufficient financial support from both parents, and parents cannot make agreements that would adversely affect these rights.

Situations Where a Prenup May Be Needed

Prenuptial agreements can provide benefits in many different situations. Even if a couple does not own significant assets and does not expect to encounter disputes related to their property or finances, a prenup can provide them with an understanding of how certain matters will be handled if they choose to get divorced. By making decisions about these issues, they can better understand the “stakes” of a potential divorce, and this may encourage them to maintain a healthy relationship, work together to address financial matters, and avoid problems that could lead to the end of their marriage. A prenup may also allow a couple to prevent a contested divorce in the future. By deciding how divorce-related matters will be handled ahead of time, they will not need to fight over these issues if they choose to end their relationship.

There are certain types of situations where prenuptial agreements can be especially helpful, including:

• One or both parties are entering the marriage with significant assets or debts - If a person comes from a wealthy family or owns valuable property, they will likely want to make sure their assets will be protected. In these cases, a prenup may be used to ensure that certain assets will be classified as separate property, protecting them from the requirement to divide these assets in the case of a divorce. In addition, if either party has debts going into their marriage, a prenup may state that the other party will not be held liable for these debts.

• Either party earns a large income - If there is a disparity between the amount earned by the partners, the person with a higher income may be concerned that they will be required to pay spousal support in the case of divorce. A prenuptial agreement may address this issue, such as by having the lower-earning spouse waive their right to spousal maintenance. A prenup may also detail certain situations where maintenance will or will not be paid, such as eliminating a person’s right to receive support if they commit adultery.

• Either party is a business owner - A person who owns a business before getting married will likely want to make sure their business will not be affected by a potential divorce. A prenuptial agreement may state that the business will continue to be considered separate property, and the other spouse will not have an ownership claim toward business assets. In some cases, business partners may be required to create this type of agreement when they get married, ensuring that the future of the business will not be threatened if the partner’s marriage does not work out.

• Either party currently has children - If a person is getting married for a second time or has children from a previous relationship, they will likely want to make sure their children will be provided for, no matter what happens during their marriage. To do so, they may wish to create a prenup that will set aside certain assets for their children, ensuring that these assets will not be subject to division during a divorce.

Making Sure a Prenup Is Valid and Enforceable

A couple will want to make sure the terms of their prenuptial agreement will be followed if they choose to end their marriage in the future. To ensure that an agreement will be enforceable should disputes arise, it is important to make sure it meets all legal requirements. Each party should be able to review the agreement with the help of an independent attorney. This will ensure that they fully understand the terms of the prenup, and it will allow them to identify any issues and negotiate any changes that may be necessary. 

When disputes arise regarding prenuptial agreements, they are often based on claims that a person did not enter into an agreement voluntarily. To ensure that this will not be an issue, a couple will want to make sure their agreement is in place well before the date they plan to get married. If one party presents the other with a prenup immediately before the couple’s wedding and states that they will not go forward with the marriage unless the agreement is signed, this may be considered coercion, and it may be a reason to invalidate the agreement if disputes arise during the couple’s divorce.

It is also important to make sure both parties are fully aware of each other’s financial situations. Each party should provide the other with a complete financial disclosure that details their assets, income, and financial obligations. Either party may waive their right to receive a financial disclosure, although this is generally not recommended. If certain information is not disclosed, and a person did not waive their right to receive a disclosure, an agreement may be invalidated if a judge determines that it is unconscionable, meaning that it is grossly unfair and benefits one party over the other.

Contact Our Elmhurst Prenuptial Agreement Lawyers

If you are planning to get married, you may want to consider a prenuptial agreement that will provide you with legal and financial protections and help you avoid disputes in a potential divorce. At Weiss-Kunz & Oliver, LLC, we can help you draft and negotiate an agreement that will fit your unique circumstances. To discuss these matters in a confidential consultation, contact our DuPage County prenup attorneys at 312-605-4041.

Sources:

https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2087&ChapterID=59

https://www.huffpost.com/entry/destigmatize-prenups-not-just-for-rich-people_l_5f7df979c5b62e45eed528ce

https://www.theknot.com/content/prenuptial-agreement-sample-form-mistakes