The following is a fictional “what-if” scenario that many couples in Illinois may currently be dealing with.
It’s been almost a year and you couldn’t be happier with Mike. He’s charming, sweet, funny, has a good job, keeps a clean bathroom, actually gets along with your mom, and (let’s face it) he’s pretty easy on the eyes. You’ve sampled the dating pool and have come to the conclusion that Mike could be The One. All your friends agree that he’s definitely got The One material—even your mom thinks so!
If you are getting married, one of the last things you want to do is bring up a prenuptial agreement (prenup for short) because it’s usually something connected with divorce. And clearly, that is not a possibility you’ll want mentioned before the marriage has even started.
A prenup is a document drafted prior to getting married that determines certain financial arrangements between the spouses. Although people commonly associate prenuptial agreements with those who are wealthy, anyone can execute a prenup before marriage. It is important to understand not only what constitutes a prenup, but what factors can declare a prenup invalid.
Following a Supreme Court ‘punt’ earlier in the month, a ban on same-sex marriage has been struck down in six additional lower courts – bringing the total number of states to ratify the action to 32. The federal government now recognizes unions between same-sex couples in Colorado, Indiana, Nevada, Oklahoma, Utah, Virginia and Wisconsin; as a result, federal and state benefits will finally be extended to couples living in those states.
Which raises the question that so many couples consider prior to entering into a union – how will my benefits and overall financial stability be impacted if we divorce? Now that same-sex marriages are finally on equal footing as their heterosexual counterparts in the State of Illinois, are there any particular economic considerations that should be documented in a prenuptial?
When it comes to highlighting the need for a focused, well-executed and thoroughly acknowledged prenuptial agreement, you need only look to the current high-profile proceedings between Citadel CEO, Ken Griffin and his wife Anne Dias-Griffin.
Beginning in July of this year, Mr. Griffin filed to dissolve his 11-year marriage in Illinois state court, citing irreconcilable differences between the two. Mr. Griffin also asserted the couple’s prenuptial agreement outlined the final terms of the divorce and, in fact, it has been actively utilized since the start of their marriage.
The divorce attorneys at the law firm of Nottage and Ward in Chicago have run into this scenario all too often: a woman has decided to forgo a budding or successful career to stay at home, raise the children, and run the household. Suddenly, the marriage falls apart and she finds herself divorced and jobless with little or no prospects of gaining meaningful employment in the future.
Many think that family courts will protect them and that alimony payments will be commensurate with the monies they may have earned after giving up their careers. According to Forbes, many of these women are in for a shock. Often judges, including female judges who had to make sacrifices in their own family lives to pursue their careers, are not sympathetic to the Stay-At-Home-Mom (SAHM) plight.
These women (and, increasingly men) may assume that they will receive alimony covering full support, but with the advent of alimony reform laws in many states those expectations may simply be unrealistic. Permanent alimony is increasingly becoming a thing of the past. We are living in an age where “rehabilitative” or “temporary” alimony is becoming the norm. These alimony judgments only stay in place until the affected spouse gets back on his or her feet and can rejoin the workforce.
If you have signed a prenuptial agreement and are getting a divorce, does it mean that you have signed away your rights during divorce proceedings? The answer to that question can be complicated, especially given the passage of the Illinois Uniform Premarital Agreement Act (IUPAA), which made it more difficult for parties to challenge the validity of a prenuptial agreement during divorce proceedings.
That being said, the IUPPA only applies to prenuptial agreements signed after 1990 and still allows some leeway for courts to invalidate prenuptial agreements.
One consideration the court might factor in is whether it believes the terms of the prenuptial agreement are “unconscionable.” For example, a judge may decide that the terms of the prenuptial agreement were so overwhelmingly one-sided that it is blatantly unfair and can therefore be invalidated.
The importance of pre-nuptial agreements for high profile couples can be demonstrated by the recent developments in Mel Gibson’s divorce from Robyn Moore. The couple had separated after approximately 28 years of marriage and their divorce became final at the very end of 2011. Having gotten married when Gibson’s career was just taking off, they apparently did not see the need to have a pre-nuptial agreement. As a result Robyn Moore was awarded half of Gibson’s fortune, estimated at $800 million, and, according to The Huffington Post, this also includes a large portion of Gibson’s retirement benefits.
While it is easy to understand why two high-profile individuals would want to protect their individual fortunes when deciding to marry, many have a hard time understanding why normal couples choose to create a pre-nuptial agreement. Many view prenups as marriage killers. Some people believe that, by going into the marriage preparing for the end of it, couples create a self-fulfilling prophecy for their marriage. This may have been how Gibson and Moore felt before Gibson became such a prominent celebrity.
A pre-nuptial agreement is a contract between spouses, which is entered into before the couple gets married. This contract often contemplates and determines the rights and responsibilities of each party in areas such as property division, maintenance, distribution of any assets, and other family law matters in the event of a divorce/separation. It may also address estate planning issues in the event that one of the spouses dies during the marriage. A pre-nuptial agreement cannot impact a child’s right to receive financial support, child custody or involve anything criminal. Pre-nups can eliminate legal gray areas and provide a couple with more security for their future. They are not for everyone, however.
There is a negative stigma surrounding pre-nuptial agreements, according to The Huffington Post. However, though formerly seen as a detriment to marriage and even an inducement to divorce, pre-nuptial agreements may actually strengthen a marriage. While pre-nuptial agreements recognize the possibility of divorce, it does not mean divorce is inevitable. Thinking of a pre-nup as legal protection for when you divorce is inaccurate and is not the point of a pre-nup. The point is to make sure your future is secure, no matter what happens. There’s nothing wrong with being prepared. There are a few factors to consider when determining whether you should get a pre-nup:
Recently, Forbes featured an article that discussed how divorce can complicate business ownership, particularly if the value of a business increased during a marriage. The value of a marital business in Illinois will usually be included in marital assets that will need to be split between divorcing spouses following a business valuation. However, there are steps a party can take to protect the business and their investments. If they have a greater stake in the business or if they consider the business to be separate property, they may be able to prevent a business valuation from being conducted.
While marital and separate property can be incredibly complicated, typically, one party will claim a right to a certain percentage of the other party’s business, whether or not they contributed directly to growing it. One of the biggest steps a person can take to protect their business during a divorce is to have a pre-nuptial agreement in Illinois in place before the marriage begins. In order for the prenup to be most effective, it should contain certain elements, including:
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