Valentine’s Day is one of the most romantic days of the year. If you’re considering proposing to your love on Valentine’s Day, propose a prenup at the same time!
More couples are using prenups now than ever before. A prenuptial agreement—which is a legally binding contract that determines how spouses will divide assets and debts in the event of a divorce—isn’t just for the wealthy, or those with many assets. If you’re curious about whether a prenup is right for you, or if you’re considering signing your fiancé’s proposed prenup, it’s helpful to consider the pros and cons of a premarital agreement first.
Understanding Prenuptial Agreements
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.
If your partner wants a prenuptial agreement, it does not mean your partner is anticipating a divorce, or that he or she is not committed to a long-term relationship with you. Rather, the agreement is for protection if something were to ever happen. Because 40 to 50% of marriages end in divorce in the United States, it is pivotal to take the steps that will allow you to take care of yourself in the future.
The New Trend in ’21
The number of couples entering into premarital agreements has surged in recent years, and Millennials are leading the charge. These days, the stigma of entering into a prenup is drastically receding, thanks in part to the many Millennials who have viewed the idea of a prenup as a smart move. In a current survey of more than 550 individuals, 71% of respondents have said that they think a prenuptial agreement is a good idea. (Source: Charlotte Agenda)
According to a recent survey taken by the American Academy of Matrimonial Lawyers (AAML), 62% of divorce attorneys reported seeing an increase in the total number of clients seeking prenuptial agreements before marriage in recent years. Notably, more than half of the matrimonial attorneys who responded to the survey also reported an increase in the number of Millennials requesting prenuptial agreements.
Why the trend? Millennials in particular are choosing premarital agreements as the preferred option to protect separate property holdings, business interests, and to avoid potential alimony disputes.
Proposing a Prenup in Illinois
One of the most popular days of the year to propose is Valentine’s Day. And contrary to belief, a discussion about a prenuptial agreement can be extremely romantic. After all, you are now taking another step toward committing yourself completely to another person, In this case, being honest and transparent about important and sensitive issues such as finances.
With a prenuptial agreement in mind, it is important to have a complete understanding of your partner’s financial situation, your own financial situation, and also to be sure that you and your future spouse are honest and transparent about financial expectations.
States impose different rules for prenups. In Illinois, prenuptial agreements are governed by the Illinois Uniform Premarital Agreement Act (750 ILCS 10/1-10/11). A prenup must be created in writing, and it must be signed by both spouses. A prenuptial agreement will not become effective until a couple becomes legally married. If a couple chooses not to get married, any prenuptial agreement they have made will become void. A prenup can also be amended or revoked after a couple’s marriage if these changes are made in writing and signed by both spouses.
What About Same Sex Couples?
Illinois’s same-sex marriage law took effect on June 1, 2014. Couples who entered into civil unions could convert them into marriage licenses, backdated to when their civil union ceremonies were held.
On June 26, 2015, the United States Supreme Court struck down all bans on same-sex marriage in the entire country. Therefore, same sex couples face the same benefits – and difficulties – as heterosexual couples when it comes to family law. Including prenuptial and postnuptial agreements.
Timing Not Right? Consider a Postnup
So you planned on proposing a prenup, but you never had the right time and got married anyway. Don’t panic as there is a second option: a Postnuptial Agreement, which can offer you the same sense of financial security.
Postnuptial agreements, or postnups, are gaining in popularity. Postnups are designed to settle some of the same issues as a prenup, such as who gets which property and how much alimony a spouse will receive after a split, but in this case the contracts are signed after the wedding.
With a postnuptial agreement, married couples can iron out the same financial considerations they wanted to address all along—albeit after they’ve exchanged vows. Reasons to pursue a postnup include:
- Protecting inheritance: When one of the spouses expects a large inheritance, the two may want to work out who’s entitled to the money should they split.
- Dividing interest in a business: Valuing a company can be extremely expensive and time-consuming, so some couples use postnups as a way to categorize the business as separate property that will stay with the titled spouse.
- Repaying gifts: If one spouse’s parents gave the couple a substantial amount of money—perhaps for the down payment on a house, a postnuptial agreement provides the in-laws (and their child) with the peace of mind that they’ll be reimbursed if the relationship doesn’t last.
- Rebuilding a relationship: In some cases negotiating these topics is seen as a way to keep a struggling marriage solvent. Agreeing on post-divorce terms that are favorable to the other spouse can be a sign of an intention to keep the relationship intact.
- Timing: There was never the right timing pre-marriage to discuss/implement a prenup, or the spouse/family members were once against the idea but have since warmed to the prospect.
(*Note: The agreement can be in place for the duration of the marriage, or it may include a sunset provision in which the contract expires after a given number of years. If the couple ends up getting divorced and the agreement is no longer in force, their marital assets and liabilities would be allocated in accordance with state law.)
Take Action Today
If you’re planning to propose this Valentine’s Day (or any day of the year) a prenup can provide many benefits, both during a couple’s marriage and if the possibility of divorce ever enters the picture.
Although not a romantic discussion to have with your future bride or groom, the discussion about prenuptial agreements is an important aspect of your future. The agreement is nothing more than an insurance policy to protect the couple from the consequences of death or divorce. It’s a one-time, upfront cost to shield each spouse’s estate.
As with any contract, it is crucial to seek separate legal counsel to ensure your best interests are protected. If you live in the state of Illinois, contact the Family Law Attorneys at Masters Law Group. Our experienced prenuptial and postnuptial lawyers will help you navigate through the complexities of family law and determine all of your available legal options. We will ensure that your best interests are protected always.
Contact us here today to set up a virtual consultation.