Couples can agree, before (prenuptial agreement) or after (postnuptial agreement) marriage, on how assets will be divided upon a dissolution of marriage. Prenuptial agreements can foster financial transparency and open communication between partners. Through the process of discussing and drafting a prenup, couples have the opportunity to share important conversations about their financial expectations, responsibilities and goals. This is one reason prenuptial agreements are becoming more acceptable in general society.
Under the Illinois Uniform Premarital Agreement Act, parties can contract the disposition of property during a divorce. Prenuptial agreements are viewed as contracts and general contract law and interpretation govern these agreements. In re Marriage of Woodrum, 2018 IL App (3d) 170369. For a prenuptial agreement to be enforceable, it must satisfy certain formalities, including that it is entered into voluntarily and it must be conscionable. 750 ILCS 10/7-a. Because prenuptial agreements are viewed as any other contract, the parties are essentially free to bind and contract themselves in any way they like. By using a prenuptial agreement, parties can contract the disposition of their property during a divorce and at death.
Typical Reasons a couple may want to consider a prenuptial agreement include:
A desire to protect assets that you accrued prior to marriage
One main reason to consider a prenuptial agreement is to protect your hard-earned assets that you bring into the marriage. Illinois follows an equitable distribution system, which means the attempt at a fair but not necessarily equal division of marital property in case of divorce. If you have significant assets or property that you wish to keep separate, a prenup can help safeguard your interests. This may be even more relevant in second marriages where you might want to protect assets for children from a previous marriage, where one party brings a business to the marriage, or in families where continuation of inherited wealth to certain family members should be delineated.
Define Spousal Support i.e., Alimony
A prenuptial agreement can address spousal support/alimony, also known as maintenance, here in Illinois. In Illinois, courts consider various factors when determining spousal support, including the length of the marriage, the financial situation of both parties and their respective needs. By including provisions for spousal support in your prenuptial agreement, you can have more control over these arrangements.
Clarify and Identify Inheritance Rights
Inheritances are often a matter of concern in marriages. A prenuptial agreement can specify the treatment of inheritances in the event of a divorce. Without a prenuptial agreement, inherited assets may become part of the marital estate and therefore subject to division.
While prenuptial agreements are not always a topic couples eagerly discuss before tying the knot, they can offer peace of mind. Begin the drafting and discovery of assets and liability process well in advance of your wedding. Rushing to create an agreement shortly before the wedding can create unnecessary stress, and the agreement may not hold up to scrutiny at the point of a dissolution event. Our Mediation and Collaborative training make this firm well suited to draft and negotiate prenuptial agreements. If such an agreement is something you want to explore prior to marriage, we are here to help.