Category Archives: Premarital Agreement

Is It Time to Update Your Prenuptial Agreement?A prenuptial agreement is a useful document to have in the unfortunate event that you ever decide to divorce. With all of the turmoil in a divorce, it can be a relief to have some of the negotiation work already complete. However, a prenup should not be a static agreement that you do not examine unless a divorce occurs. Your financial means and needs have changed since your marriage began. At worst, you may discover that your agreement is obsolete once it comes time to use it. You should periodically check your prenuptial agreement during your marriage and update it if necessary.

Division of Property

A prenuptial agreement can list which items will be included in your division of marital property and who will receive them. Many of the properties listed in your original prenuptial agreement are nonmarital properties because you owned them before your marriage. When modifying your agreement you can:

  • Add major properties that you have accumulated since the start of your marriage;
  • Remove properties that you no longer own; and
  • Update the value of the properties that were already in the agreement.

For instance, it is common for a spouse’s business to increase in value since the time when they created the agreement. The division of property in the agreement may now be unbalanced because of that change in value. The spouses can renegotiate whether they will share ownership of the business if they divorce or agree to give the other spouse more properties as compensation.

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Why a Prenuptial Agreement Is Worth the CostThere is a misconception amongst some newlyweds that a prenuptial agreement is not necessary unless you are rich. It is true that a prenuptial agreement is helpful when spouses have substantial assets. Those with fewer assets may believe that creating a prenuptial agreement is unnecessary or not worth the cost. However, you should not discount the benefits of having a prenuptial agreement, even if your premarital assets seem meager. In the event of a divorce, you may be thankful that you took the time to prepare one.

Need

People think of prenuptial agreements as a tool of the rich because they are most likely to hear about prenups in the media when celebrities get divorced. Owning valuable assets is only one reason to create a prenuptial agreement. Others include:

  • Identifying premarital assets;
  • Determining how to divide assets that may grow in value; and
  • Settling potential property disputes while you and your spouse have an amicable relationship.

It is common sense to want to know all of a person’s assets before you marry them. You should be suspicious if they refuse to divulge them. Some assets, such as a business, are likely to become more valuable in the future. If you created and are running the business, you may want to protect your ownership while also acknowledging that your spouse would deserve compensation for the value of your business. You could wait until a divorce to settle issues such as this, but your spouse may be less open to compromise during the divorce.

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The Problems with Lifestyle Clauses in Prenuptial AgreementsBecause of Illinois’ no-fault divorce law, couples can no longer punish each other for acts such as infidelity when filing for divorce. Previously, spouses may have accused each other of immoral behavior in order to avoid paying spousal maintenance or keep a greater share of the marital properties. Now, irreconcilable differences are the only reason that couples can cite for their divorce. Some couples are instead using prenuptial and postnuptial agreements to try to penalize a spouse’s behavior. A lifestyle clause sets rules for a marriage that will result in a financial penalty if either spouse breaks them. However, you should understand the potential problems of lifestyle clauses before you include one in your agreement.

Enforceability

Lifestyle clauses are relatively new, which means that there is little legal precedent for them in courts. The individual opinions of the judge may determine whether a court enforces the clause. Some judges may reject any provision that penalizes a spouse for fault during a divorce. Other judges may allow the clause as long as:

  • The terms of the clause are clear;
  • The clause applies equally to both sides;
  • Both spouses agreed to the clause; and
  • The penalty is fair and does not violate divorce law.

It is important to include a severability clause if you create a lifestyle clause in your agreement. That way, the rest of your agreement remains valid even if the lifestyle clause is unenforceable.

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Determining If You Need a Premarital AgreementFor all of the work that goes into creating a premarital agreement, you want to feel assured that your effort was worthwhile. Premarital agreements settle the same division of property issues as a divorce, which requires accounting for your individual properties and debts. You may feel uncomfortable discussing the possibility of divorce before you have married. Not every marriage needs a premarital agreement. However, you should weigh the potential benefits of an agreement before dismissing the idea because it is at least worth a discussion.

Financial Protection

A premarital agreement is most useful when the parties own several properties from before their marriage. In the agreement, you can:

  • Differentiate between marital and nonmarital properties; and
  • Determine which marital properties you will receive in case of a divorce.

The agreement will protect your ownership of key assets, such as your business interests and retirement benefits. An agreement can still be useful if you have not accumulated many premarital assets. Your spouse may have premarital debts, such as student loans, which you may share responsibility for during your marriage. A premarital agreement can separate the debts you are each liable for in case of divorce.

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Initiating Conversations About Prenuptial AgreementsDespite the practicality of getting a prenuptial agreement, there is no avoiding that it is an awkward conversation to have with the person you plan to marry. Talking about a prenup means you are admitting the possibility that your marriage will end in divorce. It is particularly uncomfortable if you are the one who broaches the subject. Anger, distress and avoidance are all possible reactions. How you introduce the topic can determine whether you will be able to continue the conversation and create an agreement.

Framing the Conversation

Before you have your first prenup conversation, you should consider ways to present the subject that make it seem more benign. You can plan exactly what you will say to start the conversation, but everything beyond that should follow a broader outline. Sounding scripted can be off putting, and you must be flexible enough to respond to unexpected questions. You can expect that your significant other will ask why you want a prenuptial agreement. Prepare several answers that frame the idea as reasonable:

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Goostree Law Group

Goostree Law Group

 555 S. Randall Road, Suite 200
St. Charles, IL 60174

 630-584-4800

 1770 Park Street, Suite 205
Naperville IL 60563

 630-364-4046

 400 S. County Farm Road, Suite 300
Wheaton, IL 60187

 630-407-1777

Our Illinois divorce attorneys represent clients in Kane County, DuPage County, Kendall County and DeKalb County, including Geneva, Batavia, St.Charles, Wayne, Wasco, Elburn, Virgil, Lily Lake, Aurora, North Aurora, Elgin, South Elgin, Bartlett, Crystal Lake, Gilberts, Millcreek, Maple Park, Kaneville, LaFox, Yorkville, Oswego, Plano, Sugar Grove, Big Rock, Bristol, Newark, DeKalb, Sycamore, Naperville, Wheaton, West Chicago, Winfield, Warrenville, Downers Grove, Lombard, Oak Brook, Streamwood, Hoffman Estates, Barrington, South Barrington, Lake Barrington, Schaumburg, Big Grove, Boulder Hill, Bristol, Joliet, Kendall, Lisbon, Minooka, Montgomery, Plainfield, Sandwich, Yorkville and many other cities.

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