Married and non-married couples can benefit from setting out terms in premarital, postnuptial or cohabitation agreements.
For some people, the thought of signing a prenuptial agreement fills them with dread. They may assume that a "prenup" is a sure sign that their impending marriage is doomed to fail, or that only a greedy person with too much money would ask his or her partner to sign one in an attempt to protect wealth above the relationship itself.
For others, however, prenuptial agreements (sometimes called "premarital agreements" or "premarital contracts") make perfect financial sense. This is particularly true in the event of second, third or subsequent marriages where one partner is concerned about protecting assets for their children from a prior relationship, or if one or both parties to the agreement have their own businesses.
There is no "one size fits all" version of a prenuptial agreement that will suit every single couple's needs. Nevertheless, many couples would benefit from having one, even if they aren't very wealthy or don't already have children. Prenups, as well as similar documents signed after the marriage called "postnuptial agreements," can be very beneficial in terms of getting couples to discuss finances openly, as well as setting forth terms in the event that the relationship might end in the future. Roughly half of all first-time marriages end in divorce regardless of the presence of a prenup; knowing that, doesn't it make more sense to have one than to not?
What prenups and postnups can do
Prenups and postnups are surprisingly versatile. They can be used to set forth terms of any future alimony/spousal support payments should the couple divorce, including whether there should be a lump sum paid or scheduled payments, the amount and duration of such payments, and whether there are circumstances - like infidelity on the part of the spouse who would have been set to receive payments or others - that would prevent their being paid.
Prenuptial agreements can also be used to delineate treatment of specific items of property or assets. If, for example, one spouse comes into the marriage expecting a significant inheritance, the agreement could address how such property would be addressed in the event of a divorce (i.e., that the assets will be included in the marital estate, that they will be held separate as only belonging to the spouse who received the bequest, or that they will be set aside as the property of the couple's future children).
The value of cohabitation agreements
With the passage of the Illinois Civil Unions Act a few years ago, the state's courts were finally able to recognize the property rights of unmarried couples who have lived together without marrying (regardless of whether the couple was unable to wed because they were same-sex or chose not to for personal reasons). By signing cohabitation agreements or entering into civil unions, these couples are now able to enjoy many of the same property-related benefits as married couples, including formalizing how expenses should be split relating to housing and utilities, addressing issues concerning insurance (health, life, etc.) and other benefits, and dealing with potential property division issues similar to those that would be faced by married couples (like who will remain in the home if the couple splits).
Premarital, postnuptial and cohabitation agreements can all help couples prevent legal headaches in the event that their relationship ends in the future. To learn more about these powerful legal documents, and to determine if one is right for you, contact the Chicago-based Law Offices of Jeffrey M. Leving today.
Keywords: premarital agreement, postnuptial agreement, cohabitation agreement, prenup, prenuptial agreement