Pre-Marital Agreements in Illinois
A pre-marital agreement is an agreement that future spouses enter into prior to their marriage which sets forth how property will be divided in the event of divorce. Pre-marital agreements are also called pre-nuptial agreements or ante-nuptial agreements. Pre-marital agreements are valid and enforceable in Illinois as long as the agreement is made in accord with the Illinois Uniform Premarital Agreement Act.
Post-Marital Agreements in Illinois
A post-martial agreement is an agreement made between already married individuals that sets forth how property will be divided in the event of divorce. A post-marital agreement may also address children’s issues like parenting time and child support. A post-marital agreement is valid and enforceable as long as the agreement is made in accord with the Illinois Marriage and Dissolution of Marriage Act.
Why should I get a pre- or post-nuptial agreement?
In either a pre or post-marital agreement guidelines are set forth which dictate how non-marital and marital property is divided in the event of a divorce. Some agreements also provide instructions and agreements as to how the spouses will have their estate planning documents drafted, but you should not rely on a pre or post-martial agreement as an estate plan and should have specific estate planning documents prepared.
For pre and post- marital agreements to be valid, the agreement must at a minimum, be in writing, be signed by both parties, be entered into freely and voluntarily, not be entered into under duress, and there must have been a complete financial disclosure of all assets and liabilities of both parties.
When to draft a pre-nuptial agreement
For a pre-marital agreement, I recommend that parties sign a pre-marital agreement one-three months prior to the anticipated wedding date, and that the negotiation process start no less than six months prior to the wedding date. Following this timeline potentially guards against a successful claim that the pre-marital agreement was a last-minute surprise, that the other spouse didn’t have adequate time to have an attorney review the proposed agreement, or that the agreement was signed under duress.
What is the difference between marital property & non-marital property?
Non-marital property is property that is acquired before marriage and maintained as separate property after marriage. Inheritances are also non-marital property regardless of when they are received, as long as the inheritance is maintained as separate property. A person does not need a pre-marital agreement just to identify these types of property however, both of these types of property must be maintained as separate property. If the property is not properly maintained as separate, then the non-marital property will become co-mingled with the marital and that is where the problem occurs.
For example: If you have a bank account before you get married, then you get married and deposit your paycheck into that same bank account after you are married, you have just co-mingled non-marital property, the bank account balance that existed prior to the marriage date, with marital property, your paycheck you received after you got married. It does not matter that the bank account is in just your name. The property has been co-mingled and over time, the difference between the non-marital and the marital will be indiscernible.
A second example: You own a condominium prior to your marriage. You get married, sell the condominium and use the money for the down payment on a house which you live in with your spouse during the marriage. The condominium sale proceeds were non-marital, until you spent that money on a marital residence. In the event of a divorce, absent a pre or post-marital agreement, your use of the condominium sale proceeds to put a down payment on a marital residence will be deemed a gift from you to the marriage, which you are not entitled to reimbursement for.
The above examples are why a pre or post marital agreement is important. With a pre or post-marital agreement you can identify the non-marital property and provide guidelines on how that property may be utilized during the marriage, as well as how you may use marital property during the marriage.
To address the problem created in the first example above, a pre-marital agreement would identify the bank account and the account balance at the time of the marriage and might say: “in the event of a divorce Jane Doe is entitled to reimbursement of her original bank balance at the time of the marriage, then the parties will divide the remaining balance 50% each.” Without a pre-marital agreement, the entire account would likely be subject to division.
To address the problem created in the second example above, a pre-marital agreement might say: “in the event of a divorce the parties will sell the marital residence. Upon the sale, Jane Doe is entitled to reimbursement of her down-payment. After Jane receives her reimbursement, the parties will divide the remaining sale proceeds 60% to Jane Doe and 40% to Mary Doe.” Without a pre-nuptial agreement Jane would not be entitled to receive reimbursement and the parties would argue in the divorce about the percentage each spouse would receive.
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