Springfield Business Journal Articles

Sarah Delano Pavlik

Prenuptial Agreements

Now that COVID restrictions are "over," wedding bells are ringing again.  If you intend to be married, you may want to consider a prenuptial or premarital agreement.

The requirements for a prenup are deceptively simple.  Per Illinois statute, "A premarital agreement must be in writing and signed by both parties.  It is enforceable without consideration."  The difficulty comes in the enforcement section of the statute.

A premarital agreement is not enforceable if a  spouse proves that he did not execute the agreement voluntarily.  Many times a person who is trying to avoid the consequences of a prenup will claim that he did not sign the agreement voluntarily.  A simple refusal to marry a person if he does not sign a prenup does not make the agreement involuntary.  However, it is always best to negotiate and sign a prenup well before the wedding date and to sign a ratification agreement after the wedding to further evidence the voluntary nature of the agreement.

"A premarital agreement is [also] not enforceable if the party against whom enforcement is sought proves that:

    the agreement was unconscionable when it was executed and, before execution of the agreement, that party:  (i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;  (ii)  did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and (iii)  did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.

The issue of unconscionability is a gray area.  A judge, not a jury, determines if an agreement is unconscionable.  Although the statute says the agreement must be unconscionable when it is executed, in reality the courts often look to whether or not an agreement is unconscionable at the time of the divorce.

Issues of support are further complicated.  A prenup cannot waive or determine child support.  A parent cannot waive child support on behalf of a child, and the amount of support is determined by the courts.

Regarding alimony (also called maintenance or spousal support), it can be waived in a prenup, but in addition to the issue of unconscionability, there is a standard of "undue hardship."  "If a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the agreement undue hardship in light of circumstances not reasonably foreseeable at the time of the execution of the agreement, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid such hardship."  Again, the issue of "not reasonably foreseeable at the time" is a gray one.

In light of these gray areas and changes in circumstances, no prenup can be guaranteed to work at all times, but there are measures you can take to increase the likelihood of enforcement.  First and foremost, each person must be represented by his or her own lawyer.  The lawyers cannot be in the same firm.  The wife's lawyer should not have ever represented the husband and vice-versa.  In addition, the wife's lawyer should not be in the husband's golfing foursome and vice-versa.  One way to try to invalidate a prenup is to say that you did not understand what you were signing.  If your future husband is represented by an independent lawyer who explains the prenup to him and negotiates changes to it, it is hard for your husband to argue that he did not know what he was signing.

Second, the agreement should be "reasonable" at death and divorce, giving a court less inclination to find holes in the agreement.  Death time provisions can often be handled through the purchase of life insurance.  In addition, a prenup does not have to separate all of a couple's property.  For example, the agreement can say that all of wife's "family property" and the income from the property is hers alone, but that any other income or assets she acquires after the marriage are marital property.

Third, you must disclose all of your assets, liabilities and income to your future spouse in negotiating the agreement.  Your future spouse cannot be determined to have waived her interest in assets that you did not disclose to him.

So, negotiate the agreement early on, have independent lawyers, provide full disclosure and be reasonable.  Then your agreement will have the best chance of being enforced.


This article is for informational and educational purposes only and does not constitute legal advice.

 

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