A premarital agreement is an agreement before the marriage that set forth a husband’s and wife’s rights and obligations in the event of a divorce. Premarital agreements often are a touchy subject. Yet they often provide significantly more protection when carefully considered and drafted. If you are going to use a premarital agreement, though, make sure to understand what the agreement can and cannot do and how the premarital agreement in Illinois should be executed.
Do I need a premarital (“prenuptial”) agreement? This is my second marriage.
We see far more premarital agreements for second or third marriages. And Illinois law provides for broad enforceability of premarital agreements if properly drafted and executed.
Doesn’t my spouse automatically obtain an interest in my premarital assets once we are married?
What can I accomplish with a premarital agreement?
There can be a waiver of maintenance (alimony). Additionally, Illinois is a state that is relatively generous in its awards of maintenance. You can provide for limitations or waivers of maintenance within an Illinois premarital agreement. You can also agree that property would be distributed if there were a divorce in ways other than what would otherwise have been provided by Illinois law.
Without a premarital agreement how can I protect the assets I now own in the event of a divorce?
As long as you keep your premarital assets in your own name, and do not put them in any form of co-ownership with your spouse, and do not pay any money owing on the premarital asset (for example mortgage on a house) with funds you are earning as a result of employment or income from any marital property, these assets will remain your non-marital assets without a written premarital agreement. But this does not address the ever important issue of a spouse’s potential right to maintenance.
Can I protect my assets from going to my widow without a premarital agreement?
No, but the amount of your estate that goes to your widow is limited by the law. If you have no will your surviving spouse will be entitled to one-half of your estate and the other half will go to your children, but if you have no children the entire estate will go to your surviving spouse.
Upon my death, can’t I protect my assets from going to my widow by drafting a will leaving her nothing, or leaving her only a small amount?
No. Your spouse can renounce your will and she would be entitled to share one-third of your estate if you have descendants, or one-half if you leave no descendants. By a premarital agreement, however, a spouse may give up all her rights to your estate, including the right to renounce your will and take her statutory share.
In the event of a divorce, can I protect myself against a claim for maintenance (alimony) with a premarital agreement?
Yes. As indicated, you can either limit, or eliminate the claim for maintenance by a premarital agreement. This author has referred to the Illinois maintenance guidelines as one-size-fits all type law. A premarital agreement is a way to fashion an agreement that may be more thought out than the simplistic presumptive formula that Illinois law would provide.
I have heard about the Illinois Uniform Premarital Agreement Act. What does it provide?
Illinois law provides for broad enforceability of premarital agreements. There are many states that have adopted different versions of this so called “uniform” act. The key components to ensure enforceability of a premarital agreement are often full and fair disclosure of income and assets and the opportunity of each spouse for representation of counsel. The law is far more complex than this but these caveats provide a good starting place.
What is the short of it?
- If you are careful to keep non-marital assets (premarital, gifts and inheritance), such as real estate, stocks, bonds, etc. in your own name you do not need a premarital agreement, if your goal is merely to protect those assets.
- If you have non-marital assets, such as investments before the marriage, or gifts or inheritances you receive during the second marriage, you should keep them strictly in your own name and not put them into a any form of joint ownership. Nor should you mix marital and non-marital property.
- Illinois law is favorable to premarital agreements so long as both parties to the agreement are represented by counsel and there is full and fair disclosure of assets and liabilities.
Are there good resources regarding premarital agreements?
Yes. The author highly recommends Linda Ravdin’s “Premarital Agreements: Drafting and Negotiation, Second Edition.” Also, Gitlin on Divorce: A Guide to Illinois Family Law has recently comprehensively updated its chapter regarding premarital agreements.
What other tips can you provide regarding premarital agreements?
- If you are considering a premarital agreement, start the process of retaining a lawyer to draft and a lawyer to assist the other party to review the agreement early. All too often the steps for negotiating and drafting a premarital agreement may be unduly stressful if approached at the 11th hour.
- Do not rely upon a simple form. The Gitlin Law Firm has been involved in cases where a party essentially chose an inexpensive form that failed to address what he or she thought the form would do. For example, I have seen premarital agreements drafted by estate lawyers with little knowledge of Illinois divorce law. As a result the intentions of the party seeking the premarital agreement may not be met.
- Each side should haver full and fair disclosure of assets, liabilities and cash flow. And err on the side of disclosure.
- Waivers of attorney fees within a premarital agreement need to be drafted very carefully because there can be implications especially with issues related to minor children.