Getting Engaged? Why a Prenup Is a Romantic First Step

February is the season of love, and the weeks leading up to Valentine’s Day are a prime time for engagements. Among the exciting and romantic moments that go into preparing for the “Big Day,” there is oftentimes a less popular planning component to consider — the prenuptial agreement, also known as Antenuptial Agreements or Premarital Agreements but more commonly referred to as the “prenup.”

The stigma surrounding prenups is real: they are often perceived as contracts reserved for the rich and famous or they kill the romance surrounding the engagement. However, when viewed differently, prenups can help couples better prepare and plan for their future and set the stage for open, informed and honest communication about financial and life planning throughout a marriage. They can encourage couples to have the “hard” conversations early on, when issues don’t exist, rather than facing those decisions when the problems are upon them — sometimes, during a time in life when matters are more complicated. And according to researchers, couples who communicate well tend to have longer-lasting, stronger marriages and, in that sense, prenups could actually help marriages be more successful.

What Does a Prenup Do?

Each state has laws regarding how a couple’s assets should be divided in the event of divorce.  Some assets, regardless of when they are received, are already entitled to protection under the law even in the absence of a prenup. For example, here in Illinois, a spouse’s inheritance is already protected by the law as a spouse’s separate property (provided those assets have not been mixed or “commingled” with marital assets) even if those assets were received during the marriage. Should a couple divorce, those assets will stay with their owner, outside the marital estate.

However, other assets are not entitled to inherent protections under the law, and that’s where the true value of the prenuptial agreement lies. A prenuptial agreement is a contract between a couple before marriage, which governs certain marital rights in the event of a divorce.

Examples of issues that couples could consider in a prenuptial agreement in Illinois include:

  • Determining whether certain assets will be treated as marital or nonmarital, to the extent those characterizations are different than what the law provides
  • To the extent there is a marital estate, deciding on how to divide marital assets in the event of a divorce
  • How to characterize their respective incomes from employment post-marriage
  • Determining whether a spouse is entitled to receive spousal support/maintenance (formerly called alimony)
  • Deciding how and from where attorney’s fees will be paid in connection with a divorce
  • Delineating specific property owned prior to the marriage and determining how that property will be handled in the event of a divorce
  • Determining what constitutes marital debt and how to allocate that debt in the event of a divorce

Ultimately, an effective prenuptial agreement settles, in advance, arguments over many issues that arise in the event of a divorce, which can save a couple significant time and litigation expenses if their marriage ends in divorce. The best and most fair outcomes are often achieved when the spouses formulate their own settlement, as opposed to leaving those decisions to be made by a third party such a judge or arbitrator.  Making these important “uncoupling” decisions while a couple is happy and feeling more gracious toward each other—as opposed to when they are on the precipice or in the midst of a divorce—can oftentimes lead to a better outcome upon divorce for both parties.

Aren’t Prenups a Signal of Distrust?

No! Amidst the negative connotations and experiences that frequently accompany the divorce process, which is a significant part of our family law practice at Berger Schatz, I fondly refer to prenups as “happy” contracts. Prenups allow couples to enter marriage with a positive foundation. In particular, in Illinois, couples are required to fully disclose all of their assets and debts in connection with the agreement in order for it to be valid.

As a result, couples are able to enter the marriage with the power of knowledge, communication and full disclosure. This can assist couples in planning how they want to handle their finances during their marriage, even (and hopefully) if they never divorce. It provokes goal-oriented conversations early on, such as, “What are our future financial goals?” “How do we want to handle our marital earnings?” “Do we want to have children and, if so, is it anticipated that one of us will stay home and raise the children?” “How will we pay for expenses?” “Do we want to buy a house together?” “How do we foresee ourselves accomplishing those goals?” “What do we want to do with our pre-marital (nonmarital) assets once we are married?”

Handled properly, prenups can build trust and strengthen the marriage. They can provide the couple with a solid foundation of honesty and disclosure before they face certain complicated decisions that inevitably arise during a marriage.

How Important Are Prenups?

Depending on your unique situation, a prenup could be very important. They provide an extra layer of certainty so each spouse has a better idea of how assets will be divided should they divorce. Even though Illinois law provides clear parameters on what assets can be characterized as either marital or nonmarital (separate) property, proving that an asset is nonmarital can be difficult—especially in longer-term marriages. In particular, Illinois courts require that a spouse prove a nonmarital claim by clear and convincing evidence, which is the highest evidentiary standard.

Marital property also carries its own complexities, particularly where marital and nonmarital assets are mixed or “commingled”. For example, if a spouse had a nonmarital savings account and used the funds in that account to pay for the down payment on a house in the parties’ joint names, that could result in competing arguments regarding the characterization of the house. Prenups can clearly and definitively determine how such common, sometimes complicated, issues will be handled in the event of a divorce.

Prenuptial agreements are oftentimes complex and nuanced, and it is advisable to be aware and educated about the laws in your particular state regarding prenuptial agreements and to ensure that your prenup satisfies those laws.

Is There a Good Way to Propose a Prenup?

Understandably, there can be tremendous trepidation when proposing a prenuptial agreement—discussing the possible end of your marriage when you are planning your happy future is less than ideal for anyone. In my experience, the “prenuptial agreement proposal” is usually less jarring and more successful when it is raised before the “marriage proposal”.  This way the receiving person knows what to expect before the marital commitment has been made and can be more prepared to have that conversation, when the time comes.   

While there is no “romantic” way to ask for a prenuptial agreement, a direct and simple approach is usually best, such as “I have or may have in the future certain assets and interests I want to protect in the awful event that we get divorced, which is something I hope will never happen.” In the end, a prenuptial agreement can be a wise and romantic way for a couple to begin their married life together and set themselves and their relationship up for success in the years ahead.

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