When you get married, there is a long list of decisions. You must find a wedding venue, a florist, a baker and the list goes on and on. Planning a wedding requires a lot of time and patience, but it is all worth it because you want your big day to be perfect.
One thing you and your future spouse may or may not have discussed is a prenuptial agreement. Though it is certainly not as romantic as picking out your first dance song, a prenuptial agreement can provide peace of mind and provoke important discussions about finances. Here is how to know if a prenuptial agreement might be a good idea for you and your soon-to-be partner.
Property division in Illinois
Illinois is an equitable property division state. During a divorce, marital property is divided equitably, though not necessarily evenly between former spouses. Marital property is all the property you acquired together during your marriage. However, when you contribute to individual assets during your marriage, like your retirement account, these contributions are typically viewed as part of the marital property. That would make these contributions subject to equitable distribution.
Make the financial decisions
When you create a prenuptial agreement, you and your future partner are putting yourselves in charge of financial decisions. You make decisions about how property is divided, what property remains separate and even how alimony is paid. According to The New York Times, you can also stipulate a part of your salary or appreciation on individually-owned property remains separate property in the marriage. If one of you plans to stay home to raise children, you could also address how that spouse is compensated for his or her lost income.
Protect your independence
By signing a prenuptial agreement, you also protect your independence. Though marriage is about coming together and sharing a life, it is possible your marriage might end. You want to make sure you are protected if it does. If you bring assets to your marriage, you should be able to keep those assets. This allows you to maintain your financial independence no matter what happens.
Situations where a prenup makes sense
Other than putting you in charge and protecting your independence, a prenuptial agreement may be a good idea in certain specific situations. If you or your future partner:
- Have significant debt
- Own property
- Are a business owner
- Have significant retirement accounts
- Were previously married
- Have children from a previous relationship
- Want to stay home to raise children
If you or your former partner have children from a former relationship, signing a prenuptial agreement can protect their inheritance. Typically, spouses inherit some types of property automatically when the other spouse passes on. Creating a prenuptial agreement allows you to waive these rights and ensure property is passed on to the children.
A business owner should also consider their business. If you own a business, your future partner could be awarded an ownership interest, if you divorce. With a prenuptial agreement, you can stipulate that you get to maintain full ownership of the business.
Signing a prenuptial agreement may not be romantic gesture, but it can be a wise move for your future. It forces you and soon-to-be spouse to discuss finances before you marry, and it puts you in charge regarding financial decisions, if you do split up. It also protects your independence and may be a smart decision if you or your future partner have significant assets, debts or children from another relationship.