When Should a Couple Consider a Prenuptial Agreement?

 Posted on January 09, 2024 in Marital Agreements

A prenuptial agreement, often referred to as a "prenup," is a contract that a couple may sign before getting married. It can determine how various financial matters will be addressed if the couple chooses to get a divorce or separation. While discussing and signing a prenup may not be the most romantic aspect of wedding planning, it can provide peace of mind, and it can protect both parties' interests.

There are numerous situations where a prenup may be beneficial, but it is important to make sure this type of agreement is drafted correctly, and both parties should fully understand the terms they are agreeing to. At Weiss-Kunz & Oliver, LLC, our experienced attorneys work with couples to address concerns about financial issues and create agreements that will benefit them. With proper planning, a prenup can strengthen a relationship, help a couple avoid divorce, and ensure that both parties will be protected financially. We work to make sure our clients have addressed these issues correctly, and we take steps to ensure that their agreements are valid and legally enforceable if divorce becomes an issue in the future.

What Terms Can Be Included in a Prenuptial Agreement?

A prenup may address multiple types of financial issues, including:

• Division of marital property - During a divorce, a couple will need to determine how to divide all of their marital assets. These will include any assets acquired during the marriage, such as homes, vehicles, bank accounts, retirement savings, and investments. To help avoid disputes about these issues, a prenuptial agreement can detail how different assets will be divided. A couple may agree that they will each receive certain items, or they may make decisions about how different types of property will be allocated. This can help ensure that both parties will receive a fair and equitable share of the property they own and that they will both have the financial resources needed to support themselves, no matter what may happen in the future.

• Classification of marital and separate property - In addition to determining how marital property will be divided, a prenup can also define what assets will be included in the marital estate. While marital property will include any assets acquired by a couple during their marriage, separate property will include assets owned before the marriage. Since separate property will not need to be divided during a divorce, a prenuptial agreement can protect assets by stating that they will not be considered part of the marital estate. By clearly identifying separate property in advance, spouses can protect specific assets from being subject to division if they get a divorce.

• Inheritance rights - The right to inherit property owned by either spouse can be an important consideration for couples when drafting a prenup. A person’s assets may be inherited by their spouse, their children, or other beneficiaries after they die. To help prevent disputes over who should receive which assets, a prenuptial agreement may detail whether certain assets should be inherited by a spouse or other family members or loved ones.

• Spousal maintenance (alimony) - If a couple’s marriage ends in divorce, one spouse may sometimes be required to pay financial support to the other to ensure that they can maintain the lifestyle the couple enjoyed during their marriage. A prenup can address spousal maintenance, helping a couple avoid disputes about this issue during the divorce process. The agreement could determine whether spousal maintenance will be paid, the amount of support, and the duration of the payments. This ensures that both parties will have a clear understanding of their financial responsibilities in case their marriage ends.

It is important to note that prenuptial agreements must be fair and reasonable at the time they are created. They should not contain provisions that would encourage divorce or violate the rights of either party. Also, they generally cannot include decisions about child-related issues, including child custody or child support. 

When addressing issues related to a couple’s children, courts will seek to determine what would be in the children’s best interests. These determinations will be based on the children’s needs and other issues affecting the parents and children at the time of separation or divorce. Agreements made between parents ahead of time may not take children’s best interests into account. Any terms of a prenup that would determine how child custody would be handled or that would affect a parent’s child support obligations will be disregarded during the divorce process, and they could even cause the entire agreement to be invalidated by the court.

Situations Where a Prenup Can Be Beneficial

Nearly every couple can benefit from discussing the issues that may be addressed by a prenuptial agreement, even if they do not take steps to formalize these decisions in a legally binding contract. However, there are certain situations in which a prenup can be especially beneficial. Couples may want to consider a prenuptial agreement in the following situations:

• Protection of separate property: If one or both partners have significant financial assets or other valuable property that they owned prior to their marriage, they may want to ensure that those assets will remain separate in the event of divorce. A prenup may be used to protect valuable assets such as homes, artwork, vehicles, or financial investments. It may also be a good idea in cases where one spouse comes from a wealthy family and wants to make sure certain assets will remain within their family rather than being divided in a possible divorce.

• Business owners: A person who owns a business before getting married may be concerned about what could happen to the business in the event of a divorce. To ensure that a business will remain intact and can continue operating, no matter what may happen in the future, a business owner may want to include terms in their prenuptial agreement that will prevent their business from becoming part of the marital estate. By classifying business assets as separate property, a person can protect their business from dissolution if their marriage ends.

• Children from previous relationships: When either spouse had previously been married or had children with a previous partner, they may want to make sure their children will be financially protected, no matter what happens during their marriage. A prenup can help protect children's inheritance rights or their right to receive money or property by outlining specific provisions for asset distribution in the event of divorce or the death of a spouse. By setting aside certain assets that will be allocated to children, a person can make sure their children will be protected, regardless of how the marriage works out.

• Significant debt: If either spouse had significant debts before getting married, a couple may want to take steps to make sure the other spouse will not be responsible for these debts. A prenuptial agreement may establish guidelines for responsibility for paying off debts both during a couple’s marriage and after the marriage ends.

In addition to making plans for the potential end of a marriage, a prenuptial agreement can help a couple solidify their relationship and avoid possible issues that could lead to problems in the future. A prenup may include terms for how certain financial issues will be managed during a couple’s marriage, ensuring that both parties are aware of how their money is being handled and how debts and expenses are being paid. Reaching agreements on these issues can help a couple avoid conflict about financial matters, and it can ensure that they will be prepared to work together to address any challenges they may encounter during their marriage.

A prenup can also give a couple an understanding of the stakes of a potential divorce. By fully understanding what will happen if their marriage breaks down, they will be better prepared to approach these situations, and they may have the incentive to address any relationship issues and prevent a future breakup. 

Making Sure a Prenuptial Agreement Is Enforceable

When creating a prenup, it is important to make sure it meets all legal requirements and will be enforceable if divorce becomes a possibility. To ensure that a prenuptial agreement will be legally binding and enforceable, the following requirements must be met:

• Financial disclosure: Before entering into a legal agreement, each spouse should have a full understanding of the other party’s financial situation. They should fully disclose all relevant financial information, including their assets and debts, the income they earn, and their ongoing responsibilities. While a spouse can waive their right to receive this type of disclosure, doing so is generally not recommended. By having the information needed to make informed decisions, both parties can make sure they fully understand the implications of the decisions they are making.

• Voluntary signing: Both parties should willingly enter into the agreement. A prenup may not be enforceable if there is any evidence that it was signed under coercion or duress. Threats, manipulation, or other tactics used to convince a spouse to sign an agreement that is unfavorable to them may result in an agreement being unenforceable. For example, if one spouse waited until their wedding day to present the other with a prenup that they had drafted, and they stated that they would not get married unless the agreement was signed, this may be considered coercion, and a judge may choose not to enforce the agreement in the event of a divorce.

• Fairness: The agreement should be fair and reasonable for both parties. It should not leave one party in a position where they would not be able to meet their own financial needs, and it should not create an unbalanced power dynamic within the marriage. If an agreement is unconscionable, a judge may choose not to enforce it. For example, if a prenup is highly imbalanced, favoring one spouse financially and leaving the other spouse with little to no assets or financial resources in the event of a divorce, it may be found to be unenforceable.

• Clear language: The language used in a premarital contract must be clear, precise, comprehensive, and free from ambiguity. The terms should be written in plain English so that they can be easily understood by both parties. By eliminating potential confusion, both parties can be sure they understand what they are signing and how they may be affected by a potential divorce. Clear, descriptive language in a prenup can also help avoid legal disputes that could prolong the divorce process or lead to additional litigation.

Contact Our Elmhurst Prenup Lawyers

Given the complex nature of prenuptial agreements, it is advisable to consult with an experienced family law attorney if you are considering creating this type of agreement before getting married. By working with an attorney who focuses on prenuptial agreements and other areas of matrimonial law, you can make sure the terms of your agreement will meet your needs. At Weiss-Kunz & Oliver, LLC, our DuPage County prenuptial agreement attorneys can help draft a comprehensive agreement that adheres to Illinois laws while protecting your interests. To learn more about how we can help you address any legal concerns related to marriage or divorce, contact us at 312-605-4041 and set up a consultation.