What is a prenuptial agreement?
A prenuptial agreement (or premarital agreement) is a contract between prospective spouses made in contemplation of marriage. The agreement is solely intended to be effective upon the parties' marriage. It appears that prenuptial agreements are more common than ever before. Sometimes, my clients refer to them as insurance policies when the marriage does not work out. With divorce rates still hovering around 45%, it may be a prudent investment.
It is governed by Illinois Uniform Premarital Agreement Act. In summary, the parties to a prenuptial agreement may contract on the following matters:
1. the rights and obligations of each of the parties relating to any acquired or property to be acquired in the future;
2. right to buy, sell, use, or transfer property;
3. distribution of property upon separation, divorce, or death;
4. modification of alimony (also known as maintenance)
5. making of a will or trust;
6. ownership rights in and disposition of death benefits from a life insurance policy;
7. choice of law governing the interpretation of agreement; and
8. any other matter that do not contradict public policy.
It is important to note that a prenuptial agreement cannot address any issues concerning allocation of parental responsibilities of minor children of the parties, or issues of child support.
Any such clauses would be deemed to be invalid in family court, as this contradictory to public policy. In short, the parties cannot determine what is in minor child's best interest in advance of the birth.
Typically, parties enter into premarital agreement to protect their respective rights concerning property, either previously acquired or to be acquired during the marriage. There are several examples where entering into a prenuptial agreement is sensible and in fact, encouraged.
For one, a spouse with substantial assets acquired prior to the marriage, may wish to enter into a prenuptial agreement so that they may preserve their wealth in the event of a divorce. The parties may want to reach an agreement on exactly how any jointly acquired assets, like bank accounts, real estate, retirement plans may be divided during a divorce. This eliminates a lot of bickering as to who contributed more during the marriage.
Please keep in mind, that in Illinois is not a community property state (like in California, for an example). In Illinois, there is "equitable distribution," means that property is divided in just proportions, not necessarily 50/50.
Accordingly, a well prepared agreement can eliminate years of litigation in court, and clearly set forth how any acquired assets shall be split, ultimately, saving the parties thousands of dollars in attorney's fees.
Gregory Gancarczyk is an Illinois licensed attorney concentrating in all aspects of Family Law.
Mr. Gancarczyk, is a principal in his firm, Gan Law Group (www.ganlawgrup.com). For the preceding four years, he was named by Super Lawyers Magazine as a Rising Star in the area of Family Law, a designation reserved for the top 2.5% of all Illinois attorneys under 40.
Mr. Gancarczyk can be reached at email@example.com.