DLO / Thursday, March 1, 2012 / Categories: Springfield Business Journal Article, Blog Post What Can A Prenup Do For You? When you get married, you’re risking having your heart broken, but you’re also risking your financial assets. Your lawyer can’t prevent the broken heart, but if you want to try to minimize the financial risk, you need a premarital or prenuptial agreement – a “prenup.” 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, consider the case where a man and a woman are getting married. She is young, maybe 22. The invitations have gone out. She has her dress. She’s made large deposits toward the reception. The week before the wedding, the groom demands a prenup. If the bride refuses, she is faced with heartbreak, the embarrassment of calling off the wedding, financial losses, etc. Such a situation could be determined to result in an involuntary execution of a prenup. Therefore, 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 in unconscionable at the time of the divorce. For example, assume husband and wife both come into a marriage with few or no assets, have equal levels of education, and sign a prenup that says they will never share any property – everything he ever earns or acquires is his and everything she ever earns or acquires is hers. At the time the agreement is signed, it appears to be equal. However, if the husband turns out to be Bill Gates, is it unconscionable at the time of the divorce to award the wife none of his assets or income? Most people would answer yes. 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 maintenance (also called or alimony), 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 a 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 “fair.” Although it is legal to say “nothing of mine will ever be yours,” such agreements are more difficult to enforce. Instead, reasonable provisions should be made in the event of death or divorce. Death time provisions can often be handled through the purchase of life insurance. In addition, a prenup can provide for separate and joint property. For example, it 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 her. So, negotiate the agreement early on, have independent lawyers, provide full disclosure and be reasonable. Then your agreement will have the best chances of being enforced. by Sarah Delano Pavlik Previous Article Will You Live Forever On The Internet? Next Article After the Bang - Some Do's and Dont's Following an Injury Print 647