What Can Be Included in A Prenuptial Agreement?

prenuptial agreementNot only is the divorce rate going up these days, but the rate at which couples are signing a prenuptial agreement has also been on the rise.

Although it has long been perceived as a measure to protect the wealthy from gold diggers, spouses of a wider range of incomes are now signing prenuptial agreements as a way to determine how their property will be divided in the event of a divorce. It essentially provides a blueprint for how debts, assets, and other financial matters will be handled within the marital estate if the marriage ends.

Rather than a sign that trust is lacking in the relationship, one could think of a prenuptial agreement as a way to speed up the divorce process and even improve marital happiness by helping spouses avoid disputes over money and property.

Reasons for Getting A Prenuptial Agreement

Spouses generally want to consider signing a prenuptial agreement if they have any personal or otherwise pre-marital property they want to protect from the possibility of getting touched during divorce. This includes any property the person owns, including real estate, a retirement account, and/or their business(es) if they’re a business owner. These agreements can, and often do, involve property the spouses expect they will receive after the date of the marriage, but that both parties agree will remain, for all intents and purposes, that spouse’s sole property.

Children from a prior relationship are also a big motivator for many people to get a prenuptial agreement, as many parents will want to protect any assets or funds the children might inherit. A prenuptial agreement can define what property will belong solely to that spouse and his or her specified beneficiaries.

What Cannot Be Included In A Prenuptial Agreement

While a prenuptial agreement can avoid many of the “classic” disputes people think of during a divorce, a prenuptial agreement cannot determine a party’s obligation for child support. Child support belongs to the child, and the child alone, and as such, public policy in Illinois indicates that it cannot be contracted in advance or given away by a parent. Because children’s financial needs change depending on their age and circumstances, it is impossible to determine ahead of time how much (if any) child support they may need by the time the couple gets divorced, which could be any number of years in the future, if it happens at all. This is the same rationale behind the policy prohibiting spouses in a divorce from entering into an Agreement that no child support will ever be owed to the other parent and/or that a child support amount cannot be modified in the future.

The same goes for custody of children. If a couple does get divorced, a judge will determine what is best for the child at that point in time.

Dividing Marital Property

Any property a person owns prior to getting married is generally considered their personal property, and it will most often be returned to them by a divorce judge even without a prenuptial agreement. To the contrary, property and assets acquired during marriage are presumed to be marital property regardless of how they are titled, and that’s where divorces can get contentious. In order to avoid such a mess, a prenuptial agreement can decide ahead of time how marital property will be divided in the event of a divorce.

Things That Are Commonly Included In Prenuptial Agreements

In addition to protecting personal property, assets, and debts, prenuptial agreements can determine the following:

  • A spouse’s right to use, manage, transfer, sell, or dispose of property during marriage
  • Alimony that will be paid by a spouse after divorce, including the amount and duration of payments
  • A spouse’s right to ownership of death benefits from their partner’s life insurance policy
  • A spouse’s requirement to create a will that will carry out the terms of the agreement; and
  • Which state laws can be applied to the contract in the event of divorce.

Enforceability

A prenuptial agreement is there to give both parties peace of mind, but there are certain requirements the contracts must meet in order to be enforceable in each state. Whichever state’s marriage law you decide will apply to your prenuptial agreement, make sure the contract abides by all of that state’s requirements for prenuptial agreements. The timing and execution of a premarital agreement is also an important consideration, as an agreement made under coercion or duress will be held unenforceable by the Court.

The attorneys at Sherer Law Offices have been providing legal representation for divorce cases, as well as all types of family law for more than 20 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

What I Need to Know If This is My Second or Third Marriage

second or third marriageThere is no doubt that marriage is harder than ever. A new bride will gain more than a husband, as if the groom has been married before, the bride might find herself married to his alimony and child support payments as well. A groom might suddenly be a stepfather if the bride has children from a previous marriage. These are just some of the reasons to need to approach another marriage very carefully, and be aware of some of the unique financial situations that arise for second marriages.

More than 40% of weddings involve a bride or groom who has been married before. While most of these couples pay attention to their wedding budget, most don’t take time to discuss the financial issues that will have a larger impact on their relationship. These include situations where one spouse owns assets awarded in a prior divorce, or more commonly a when either spouse is supporting children from a prior marriage. You need to address these issues before you tie the knot and understand how they will impact your life together. It will be the best thing for your relationship.

Consider a Prenuptial (or Post-nuptial) Agreement

A prenuptial agreement lets you and your new spouse agree how your assets, no matter when they are acquired, will be distributed if you divorce or pass away. This agreement can be done after the marriage or before, but it’s better to take care of it before you get married.  The ideal time to begin discussing this in during your engagement, well in advance of the wedding day. The reason being that there are laws that allow a spouse to later challenge a prenuptial agreement if that agreement was made close to the wedding and the spouse claims he or she was under duress.

It is also not uncommon for people getting married for a second or third time to want to determine the allocation of expenses during the marriage. Sometimes, a couple will want even to establish the division of property and the payment of any alimony should the marriage end in divorce. These things can be addressed in the prenuptial agreement that your experienced family law attorney can prepare for you.

Will Revision

In many states, a surviving spouse has an interest in the estate of their deceased spouse, regardless of a provision of a will. People in second marriages often prefer that some of their assets transfer over to their children from their prior marriage, and or such an arrangement was actually agreed to within their prior divorce. For example, many couples will agree that they will maintain life insurance policies naming their children as beneficiaries, or they will award certain items of property to their children. This can be a part of the prenuptial agreement. You should consult with an experienced estate planning attorney to make sure your assets will be divided per your wishes. Make sure that your will is current and has an updated medical power of attorney.

Non-Marital Assets

Assets gained prior to a second marriage are non-marital. If there is proof they are non-marital and have not been combined with marital assets, they will not be distributed in the event of a divorce. Some tips to protect and maintain your non-marital assets are:

  • Keep your marital and non-marital assets completely separate
  • Use only marital funds during your second marriage to purchase new property that you intend to share with your new spouse
  • Keep your non-marital assets or accounts titled in your own name, and do not apply any of your new marital funds to those assets or accounts
  • Keep detailed records of your non-marital assets

With so many factors needing to be considered before a second or third marriage, it is best to consult with an experienced family law attorney. At Sherer Law Offices, we have the knowledge and expertise to guide you through the prenuptial process.

CONTACT US TODAY!

 

5 Myths About A Prenuptial Agreement Debunked

Prenuptial Agreement Definedprenuptial agreement

Prenuptial agreement is defined as an agreement between two parties who intend to marry, and basically outlines how the couple will manage assets, debts and other financial aspects during the marriage and in the event the couple splits. The agreement goes into effect the day the couple is married.

Reasons for a Prenuptial Agreement

Prenuptial agreements can actually assist a couple to avoid disputes over property and can potentially remove some financial stress by protecting individual retirement accounts and/or business or property owned by each individual. If a divorce occurs, a prenuptial agreement can protect those assets from potential division as well as protect inheritances of children from a previous marriage.

Now that we know what a prenuptial is and how it can benefit those who engage it, let’s review some myths that evolve around this growing popular decision.

Myth No.1: Prenuptial agreements are expensive and are only for people with a lot of money. Considering the stress of divorce, and how often relationships end in divorce, as well as increasing financial sophistication and independence of many people, a prenuptial agreement can benefit anyone who plans to marry.

Myth No. 2: Prenuptial agreements are only useful if there is a divorce. Prenuptial agreements are useful estate planning tools as well. A prenuptial agreement can be especially helpful if you have children from a previous marriage or have family heirlooms that you want to keep in the family.

Myth No. 3: Prenuptial agreements are not romantic. The ability to discuss with your partner your future financial plans and expectations for each individual, along with relationship goals, generally leads to a more stable relationship than if one spouse expects the other to solely take care of the finances and planning.

Myth No. 4: The courts do not uphold prenuptial agreements. At times, courts do invalidate these agreements, and in most cases these agreements are those prepared without an attorney, or those that were manipulated by one partner over another. By creating a legitimate prenuptial agreement drafted by an attorney, you can be confident that the prenuptial agreement will be acknowledged by the Court.

Myth No. 5: Only the financially successful partner wants a prenuptial agreement. Prenuptial agreements are used to set expectations for the relationship. A prenuptial agreement, for example, can include a provision to compensate a partner for an interruption in a career through spousal support, so that one parent can care for the children during maternity leave.

A Guide to Prenuptial Agreements in Illinois

Prenuptial agreements in Illinois can include the following options:

  • Alimony, with an outline of amount and duration of payment
  • Dispersal of property at the time of divorce
  • Plan of dispersal of property
  • Create a will that will be carried out upon divorce
  • Death benefits from each spouse’s life insurance policy
  • Which state law that will apply to the agreement in case of a dispute
  • Any other matter that is chosen to be contracted

Either spouse can amend or revoke a prenuptial agreement at any time after marriage. The amendment or revocation must be a written document and signed by both partners.

Many times when deciding what is accurate and lawful about issues such as a prenuptial agreement can be difficult and something that you may not wish to do prior to one of the happiest days of your life. However, if you want assistance with understanding the laws about Prenuptial Agreements in Illinois and find out if this financially sound decision is right for you and your soon-to-be spouse, please contact our attorneys at Sherer Law Offices. We provide you with the most recent information and guidance throughout any Prenuptial Agreement procedure and will address legal concerns you may have as you make your marriage plans.

Who Gets the Diamond? How Assets are Divided During Divorce

ringfIllinois law requires that property in a divorce be divided equitably, but that does not necessarily mean that it will be equal. Some couples agree on how to divide what they own while other couples need the help of an attorney or a mediator to come to a settlement.

Couples who are unable to come to an agreement will end up in court and ask the judge to make the decision for them. Sometimes an arbitrator will make the decision. A judge in Illinois will consider all of the factors that are relevant when making a decision about the division of property. Some of those factors include the effects of any prenuptial agreements, the couple’s occupations and ability to be employed, the length of the marriage, and custody arrangements for any children.

Separate Property vs. Marital Property

When dividing property, the first thing that needs to happen is differentiating between separate property and marital property. Separate property includes the property that either spouse owned before they got married. It also includes property that was inherited or received as a gift. Income from separate property is also included.

Marital property includes most of the debts and assets acquired during the marriage. Sometimes, separate property can be converted into marital property. This can be specified in a written agreement. A spouse might also change separate property into marital property by changing the property title from an individual title to a joint title.

Marital and separate properties are occasionally mixed together; this is called “commingling.” Couples might combine their property on purpose, or they may do it without even knowing it. For example, a bank account that one spouse has before the marriage can become marital property if the other spouse deposits money into it. A house that is owned by one spouse can also become marital property if the other spouse makes a mortgage payment or pays for any other expenses regarding the house. This can make things very complicated and require the help of an experienced divorce attorney.

Determining Value

After figuring out whether the property is marital or separate, the spouses, or possibly the court, will assign monetary value to the items. If a couple needs help with determining value, they can hire a professional appraiser. Things such as retirement accounts are difficult to evaluate and may require the advice of a C.P.A. or other financial advisor.

Property Division

Assets can be divided by assigning particular items to each spouse. There may be a need for an equalizing payment if one spouse gets considerably more than the other. They may also choose to sell a particular piece of property and split the money equally. Sometimes, they agree to continue owning the property jointly. For example, a divorced couple may decide to keep the family house until their children are no longer in school or keep it as an investment property with the hope that the value will increase over time. This is NOT recommended for couples who don’t get along, but it may be an advantage for couples who get along well and can remain friends after they are divorced.

If you have questions about the division of your property during a divorce, you need the advice of an experienced divorce attorney.

CONTACT Sherer Law Offices for a consultation.

When Is It Too Late to Get a Postnuptial Agreement?

schrijven met penThe answer to this question is: it’s never too late. A common misconception by many couples is that nuptial agreements can only be made before the wedding (prenuptial). While a prenuptial agreement is most widely recommended, couples who are already married can still draw up a valid marital contract, known as a postnuptial agreement.

Much like a prenuptial agreement, a postnuptial agreement can ensure that the interests of both spouses are protected in the event of a divorce. Prenuptials and postnuptials both allow the spouses, rather than a judge, to make the big decisions regarding distribution of marital property and asset protection. Postnuptial agreements may also give direction in regards to who is responsible for certain liabilities like credit cards or student loans after a divorce.

Postnuptial agreements can be carried out at any time during a marriage. It doesn’t matter if the couple just got married last month or if they’ve been married for 20 years. Postnuptial agreements are ideal for couples who have experienced a lot of change in their relationship, a change in financial status, or both. Postnuptials are also very beneficial for couples who have children from a previous marriage because they will be able to ensure that the interests of those children are well protected along with their own.

What is in a Postnuptial Agreement?

These agreements state the rights and responsibilities for the couple during the marriage and after the marriage in case of divorce. This agreement is unique to your personal situation. When putting together your agreement, you will want to consult an experienced attorney and make note of these items:

  • Division of property
  • Custody arrangements for children
  • Child support
  • Spousal support
  • College funding for the children
  • Division of other assets

Benefits of Having a Postnuptial Agreement

Many individuals think that these agreements are only for the wealthy. This is simply not the case. Most couples can benefit from such an agreement regardless of their wealth status. Compiling these agreements ahead of time gives couples the chance to work out some issues that sometimes cause problems in the marriage and lead to divorce.

For a marriage that ultimately ends, a postnuptial can ease the divorce proceedings. The agreement has taken care of the most important issues, which leaves you and your attorney to be able to deal with any other issues that may come up. This can make the divorce proceedings go much faster, helping to ease the emotional drain and lessen the cost.

Not all couples have a postnuptial or even a prenuptial agreement. Should the need arise at a later date it is best to consult with an experienced family law attorney because these agreements are legally binding documents. An attorney will ensure that content and language comply with Illinois State Law.

If you and your spouse are considering a postnuptial or prenuptial agreement, CONTACT the experienced attorneys at Sherer Law Offices for a legal consultation.