Although many weddings have been put on hold due to the COVID-19 pandemic, couples are continuing to become engaged and plan for the future. The prolonged period between the engagement and the wedding offers couples a unique opportunity to explore the protections of a premarital agreement.
What is a Premarital Agreement?
A Premarital Agreement is a contract entered into by two parties before they are married that only becomes effective upon the party’s marriage and provides clarity on each of the party’s respective rights upon separation or the initiation of divorce proceedings by one of the parties. Many states, including Illinois, have enacted the Uniform Premarital Agreement Act. For a premarital agreement to be enforceable, there must have been a full and fair financial disclosure between the parties, and the agreement must have been entered into voluntarily without coercion.
What can and cannot be addressed in a Premarital Agreement
Premarital agreements most commonly deal with the financial aspects of divorce, such as property division, allocation of debt, and maintenance (formerly known as alimony). A premarital agreement can also set forth the party’s respective rights relative to a party’s death. There are some issues, however, that cannot be resolved and must be left to the parties’ agreement or court order. Decisions surrounding child support, allocation of parental responsibility, and parenting time cannot be dealt with in a premarital agreement.
Who needs a premarital agreement?
Premarital agreements may be beneficial to parties who are entering a marriage with a large amount of assets, who have their own business, or who expect to acquire a large amount of assets in the future. Even if the parties do not have a large amount of assets, a premarital agreement can also be beneficial to ensure one spouse will not be responsible for another spouse’s premarital debt and it can also offer a clear roadmap for what happens if the parties divorce. A premarital agreement can give a soon-to-be spouse peace of mind when entering the marriage that their assets will be protected should the marriage end in divorce and that there will be predictability in the financial settlement and court process.
Approaching the conversation with your spouse?
Many people are unsure about approaching the conversation surrounding a premarital agreement with their fiancé. At first glance, it seems counter-intuitive to talk about a premarital agreement just after you have decided to get married, so it may be wise to bring up the possibility of a premarital agreement aside from other conversations related to wedding planning. A premarital agreement is like a form of insurance that protects both parties to the marriage should there be a divorce, and like any conversation between significant others, the conversation should be handled tactfully with an emphasis on the fact that the agreement will protect both parties.
Getting Attorneys?
The assistance of a competent attorney is crucial for the premarital agreement entered into between parties to be enforceable and ensuring the intent of the parties is adequately represented. For a premarital agreement to be found enforceable, both parties must have had the opportunity to be represented by independent counsel. The best way to ensure this is for both parties to be represented by a different attorney. Typically, attorneys assist clients with completing a financial disclosure, drafting, and review of the premarital agreement itself, and facilitating a signing ceremony to make sure that the premarital agreement is properly executed. Both parties should be represented by independent attorneys to make sure that they are adequately represented in the negotiations and creation of the premarital agreement.
The Premarital Agreement Timeline
It is advisable that the premarital agreement be completed and signed well before the wedding. A premarital agreement that is handed to one party moments before walking down the aisle is at risk of being found to be a product of coercion. It is best to start the conversation about a premarital agreement soon after engagement so that attorneys can be hired, the financial disclosures made, and the ink can be dry on the agreement well in advance of the wedding.
What Happens Next?
Once the agreement is signed, it goes somewhere safe; the parties get married and go on with their lives. With a premarital agreement in place should it be needed, both parties can rest assured that they are somewhat protected financially in case of a divorce.
Having a conversation with your soon-to-be spouse regarding a premarital agreement can be challenging, but should your marriage come to an end, both parties can benefit from the protection of a well-drafted, enforceable, premarital agreement. GQ Law is experienced with all aspects of drafting, executing, and enforcing premarital agreements.