Premarital agreements can help protect wealth and reduce conflict during a divorce. People with significant assets often use premarital agreements to outline what will happen if the marriage ends.
These agreements can clarify how to divide property, arrange spousal support and allocate future earnings. It is important to understand why having more assets will increase the necessity of such an agreement.
Equitable distribution is not always equal
Illinois follows the principle of equitable distribution in divorce. This means that courts divide marital property fairly, but not always equally. Without a premarital agreement, a court will decide what counts as marital property and how to divide it. This can create uncertainty, especially for people with large estates, business interests or valuable investments.
Premarital agreements ensure control
A premarital agreement allows each person to keep control over specific assets. For example, someone who owns a business can state that the business will stay separate property. Someone with investment accounts or real estate holdings can do the same. This keeps those assets out of the marital estate. The agreement can also include rules for dividing future income or gains, such as bonuses, commissions or profits from the sale of a company.
What to consider before creating a premarital agreement
For a premarital agreement to hold up in court, both people must sign it voluntarily. Each person must fully disclose their finances before signing. The terms must be fair at the time of signing and at the time of enforcement. If the agreement appears grossly unfair or if one person hid important facts, a court might set it aside.
Premarital agreements are also not only for the ultra-wealthy. They are useful for anyone who owns property, expects to inherit wealth or has children from a prior relationship. These agreements can also help protect family-owned businesses or inherited assets.
Waiting until after marriage to settle financial concerns can lead to costly disputes. Creating a clear plan before marriage can make separation easier and help both people feel secure. In Illinois, the more assets someone has, the more important it becomes to have a premarital agreement in place. This legal tool provides structure and protection for people who want to preserve what they have worked hard to build.
