Prenuptial Agreements: Protections and Best Practices
A prenuptial agreement (prenup) is a legal agreement between intended spouses made before marriage, outlining the division of assets and financial responsibilities in the event of a divorce or upon the death of one spouse. It can be a great planning tool that, if done correctly, both parties can benefit from, as it can help clarify how certain issues will be settled and reduce attorney's fees in the event of a divorce.
Illinois, as well as most states, have adopted the Uniform Premarital Agreement Act. The Act governs how courts decide if a prenup is enforceable and provides guidelines to ensure the agreement's validity.
Under 750 ILCS 10/1, et seq., a prenup's validity will be determined if both parties voluntarily signed it, the agreement is in writing, and it is fair and reasonable. It is also important to note that a prenup does not require consideration like most contracts. Prenups are effective upon marriage, and after marriage, they may be amended or revoked only by a written agreement signed by both parties, as seen in 750 ILCS 10/5 and 750 ILCS 10/6.
What can a prenup protect? A prenup generally may provide for various issues, such as property rights and assets, in the event of a divorce or death. It can be used not only to protect your assets but also to protect yourself from your spouse's debt incurred before the marriage. A prenup can be a great legal tool for people who own a business, have already been married, have personal wealth, have large amounts of debt, or have inheritance rights. 750 ILCS 10/4 provides discretion on what parties may include in their prenup.
What can a prenup not do? A prenup will not cover allocation of parenting responsibilities and time, support, or attorney's fees related to those disputes, as it is against public policy.
Best Prenup Practices
A prenup must be entered into with full, fair disclosure and may not unfairly benefit one party over the other. It cannot be enforced if either party withholds information, such as failing to disclose assets or debts fully. Typically, this is done by attaching assets and liabilities as an exhibit to the prenup.
It is advisable that each party have their own attorney to assist them in drafting, reviewing, and negotiating the agreement. This helps prevent any claims that the agreement was created in bad faith or otherwise unfairly.
Timelines for prenups are critical, as once you are legally married, you can no longer get a prenup. Even if you have one drafted out before marriage, it is not enforceable unless both parties sign the prenup before the wedding day. To avoid this, you should get your prenup as soon as possible in anticipation of marriage. If you are running up against a wedding date, a potential argument can be made for duress, as a spouse may claim they were under pressure and forced to sign the prenup to meet the wedding date. This sort of argument can make your prenup weaker. Make sure to have a prenup made and discussed between you and your spouse early on so that there is no question of the agreement's validity. A postnuptial agreement is another option, which you can learn more about here.
The advantage of a prenup is that you spend time and energy on the front end to protect yourself and your assets and save on attorney's fees in the event of a divorce or death. Making sure your prenup is enforceable and in compliance with 750 ILCS 10/1 et. seq., the Illinois Uniform Premarital Agreement Act, and discussing it with attorneys is essential. You do not want to draft up something that legally will not hold up in court. Ensuring you complete your prenup correctly the first time can protect both parties, save money, and minimize litigation. The stronger you create the prenup, the more valuable it is to you.
Marriage involves a lot of planning and can be a busy and exciting time. The Law Office of Erin M. Wilson LLC can make prenuptial agreements easy, as we have a talented team skilled at individualized agreements that ensure the protection of both the parties and their assets. Contact The Law Office of Erin M. Wilson LLC for a consultation to discuss your goals, rights, responsibilities, and questions to ensure you have an effective prenuptial agreement.
NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.