What’s the difference between a prenuptial agreement and a postnuptial agreement? Do you need one? And if so, which is the right fit for your marriage?
Marriages and civil unions are an act of love and commitment. But they are also a contractual pact that binds together the finances and resources of a couple. Before you enter such a union, it’s a good idea to protect your individual assets, which can be crucial if a marriage ends whether by divorce or death.
A prenuptial agreement (also referred to as a premarital agreement) is defined as, “an agreement between prospective spouses that is made in contemplation of marriage and that is effective on marriage.”
A prenuptial agreement can protect you down the line if you and your new spouse part ways in the future. Failing to make a prenuptial agreement will result in the courts having power over your estate.
Who Should Have a Prenup?
Prenuptial agreements may not be for everyone. If one of the following situations applies to you, you may be a good candidate for a prenuptial agreement:
- When one spouse is substantially wealthier than the other
- One of you owns a business
- One of you is about to fall into a lucrative career
- You have the potential to earn a large amount in the future (stocks or inheritance)
- If you have previous children or elderly grandparents that must be taken care of
How Long Do These Agreements Last?
Generally speaking, prenuptial agreements are permanent, but feelings do change, and you may reach a point in your marriage where you no longer feel a prenuptial agreement is necessary.
If you or your spouse decide that you no longer wish to have a prenuptial agreement, a signed document with you and your spouse’s written agreement will revoke the terms of the prenup. You can also add a “sunset clause” to your prenuptial agreement that sets a specified time in which the document expires.
You may already be familiar with prenuptial agreements, but postnuptial agreements can also prove to be quite valuable during a transitional time. It can be helpful to know what these documents are and what makes them different from one another.
Postnup agreements are virtually the same as prenups, only they are made after the marriage. The main issue is that, in the absence of a prenup, many assets become “marital property” as soon as the marriage is legal. But a postnup agreement will specify how these assets will be divided in the event of a divorce.
Who Should Have a Postnup?
Postnups aren’t always agreed to soon after marriage; rather couples often sign them five years or even one or two decades later.
Postnuptial agreements are often sought out by people who have discovered something they did not previously know about their spouse’s financial situation. If, for example, you have found out that your spouse is heavily indebted, you can have a postnuptial agreement drawn up that absolves you of any liability for their debt if the two of you split up.
What is Needed to Make a Valid Postnup?
In Illinois, a postnuptial agreement that is made willingly and is generally fair and equitable will be enforced. However, according to the law, if a postnup is found to be “unconscionable”, it will be thrown out.
Examples where a postnuptial agreement might not be enforced include:
- One spouse signed the document involuntarily or under duress.
- The monetary stipulations of the agreement render one spouse eligible for public assistance.
- The terms of the agreement are extremely unfair, unjust, or “unconscionable.”
- One spouse did not divulge assets or debts before signing the agreement.
- The spouse who did not know the other spouse’s financial data never waived the right to review it.
Protect Your Future with Masters Law Group
You should gather all the facts concerning prenuptial and postnuptial agreements before deciding if you need one. Hiring an experienced Family Law attorney in these kinds of agreements can help you address your specific concerns, interests, and priorities.
Illinois has specific legal standards that relate to each of these issues, and we can help inform you of the law that relates to your prenuptial, or postnuptial concerns. Contact us here today to schedule a consultation.