The wedding vows: “To have and to hold, from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, to love and cherish always.” While every bride and groom truly believe these words when they utter them, not every marriage ends happily-ever-after.
Enter prenuptial agreements (“prenups”).
A prenup is created before a marriage begins, stating that if things do not work out, the assets will be divided in a specific way. Contrary to what many people think, you don’t need to be a celebrity or a millionaire to consider drafting a prenup. They can benefit everyone, regardless of status or bank account balance.
So who should create one?
- People with a substantial amount of money. This doesn’t have to mean millions, but enough money that it would affect your life greatly if an ex-spouse were entitled to half of it.
- People who are expected to or have a large inheritance.
- Second or more marriages, where there is already a large payout to children or spouses of prior marriages.
- People who own a business.
- People with properties and separate assets they want to maintain and keep as separate.
- People who want to protect their assets in case of marriage dissolution.
- People who have been through or witnessed difficult divorces and want the dissolution of the marriage process to be smoother.
If you are unsure whether or not a prenuptial agreement is a good idea for you, reach out to a local attorney, and they will advise you.
Prenuptial agreements range in complexity and cost, depending on your needs. Some are relatively simple and inexpensive to create, while others, as you can imagine, are very complex, detailed, and costly. To make it more complicated, the laws of what is acceptable in each state vary. Twenty-eight states (Illinois is one of them) have adopted the Uniform Premarital and Marital Agreements Act which helps bring consistency to contracts signed by two parties entering a marriage. The act ensures that a premarital agreement entered into in one state is honored by the courts of another state where the couple might get a divorce.
Why are they so awesome?
A prenuptial agreement will state how the estates will be divided in the event of a divorce or death. Yes, this means there is crossover into estate planning as well. Not only does it help create a less complicated divorce if the parties decide to separate, but it can also make estate administration easier if one spouse passes away.
Depending on your jurisdiction, the prenup will vary as to what can go into it and the requirements needed to make it valid. Many family law attorneys also draft prenuptial agreements, so the first place to start is to contact a local family law attorney. Let them know what you want to protect, and they can inform you of what is allowed/not allowed in your jurisdiction.
Already married but still want to protect your assets? A postnuptial agreement is essentially the same as a prenuptial agreement, but it is an agreement created after the marriage has already begun. As with a prenup, consult a local attorney to help draft an agreement.
Happy-ever-after can still exist even if the marriage does not. By creating a pre-or postnup agreement, you are protecting both partners’ best interests, making divorce easier (should it occur), and saving yourself from future headaches and stress.
If you’d like a more detailed description of this process, check out Cindy Campbell’s new book, “Legal Things Parents Should Know”. If you’d like to learn more about drafting a pre or post-nuptial agreement, do not hesitate to reach out. Please call or email us at 866-566-9494 or Assistant@clcounsel.com.