Premarital Agreements Start to Finish

Congratulations on your upcoming nuptials! This is a very exciting time for you and your future spouse. While you are likely in the midst of planning for the big day; you may also be contemplating a premarital agreement. Now, more than ever before, engaged couples are turning to prenups while planning for their big day.

A premarital agreement is a legally binding agreement entered into prior to marriage and in contemplation of a marriage “concerning the ownership of [each party] respective assets.” A premarital agreement is used to protect one or both spouses, and their assets, in the event you were to decide that the marriage is no longer working. Premarital agreements can be used to protect not only your own assets, property holdings, business interests, and even potential inheritances but they can also be used to protect your spouse in pre-resolving maintenance (formerly known as alimony) disputes and ensuring that your future spouse is set up for success in the event of a divorce.

If you are contemplating getting a premarital agreement, below is a roadmap for the entire process start to finish.

If you have decided that you want to get a premarital agreement. The first place to start is to discuss it with your soon to be spouse. There is no worse way to begin this process than to blindside your partner with this news after you have already hired an attorney and started the process. Also, there are many items which should be discussed with your partner prior to you starting this process with an attorney. Below, is a list of topics that you should discuss with your partner and come to an agreement on prior to retaining an attorney:

• What, if any,  non-marital, pre-marriage or individual assets and/or debts are held by each party? Are all of these assets and debts going to be kept separate or will they possibly be combined later? What happens to the any increases or decreases in value of these assets/debts?
• How do you want to handle your income(s) going forward?  Will it be considered joint property or individual property?
• How do you want to handle real property (real estate), personal property (furniture, furnishings, etc.), retirement accounts, investment accounts, bank accounts, debts and the like going forward?  Will they remain separate, or will they possibly be combined at a later date?  What happens if the value increases or decreases?
• How would you want to allocate these assets and debts upon divorce?
• Do you want to address maintenance (also known as alimony) in this Agreement?  If so, what do you think is fair and reasonable?
• Do you want to address attorneys’ fees upon divorce?
• Are there any other issues that you want specifically addressed?

If you are afraid to speak to your partner about a premarital agreement due to the it being received negatively, keep in mind that in 2022, more than 40% of marriages ended in divorce. It is true that entering into a premarital agreement can often carry a stigma that you or your partner are already looking for an exit route. However,  the truth is that a premarital agreement is a crucial step in protecting not only you but, more importantly it can be used to protect your future spouse.  Failure to have a premarital agreement in place prior to your marriage (or post-marital agreement) may leave you and your partner at risk of a court deciding how your assets are handled in the event your marriage ends. While the initial discussion may be difficult to have, both parties should see this agreement as beneficial and an extra level of security for the future.

Once you have had those initial conversations with your partner and are on the same page with the terms of your agreement, you and your partner should create three individual lists: 1) A list of all of your separate income,  assets, and liabilities; 2) a list of your partner’s separate income, assets, and liabilities; and 3) a list of any assets and liabilities which you may already own jointly. These lists, also known as financial disclosures, are a crucial component to ensuring that your agreement will be valid and binding. These lists should outline not only the assets/liabilities and income currently held by each party but also the present value of any assets (i.e., amounts held in individual accounts), the present balance on any liabilities/debt, and all sources of income for both parties. Failure on the part of either party to fully disclose their individual assets/liabilities may render the agreement invalid upon divorce, or, at minimum subject the undisclosed assets/liabilities to be split between the parties in the event of a divorce.

Once you have had those initial conversations  and compiled your financial disclosures,  both parties should contact an attorney. In order to ensure, that your agreement is valid, binding, and enforceable down the road, each party needs to obtain their own individual legal counsel. You should also decide, between you and your partner, which attorney will draft the agreement, as only one attorney will hold this responsibility.

After one parties’ attorney has drafted the agreement and that party has approved the initial draft, the drafting attorney will send the agreement to the other party’s attorney for their review with their client. If your attorney is the one who drafted the agreement, it is always a good idea to discuss the initial draft with your partner prior to you approving it with your attorney it being sent to your partner’s counsel. This will continue to ensure that you and your partner remain on the same page and will keep the lines of communication open. Once the agreement has been sent to your partner’s counsel, it is at this point, that some minor negotiations may occur. With that said, if both parties remain on the same page, and both attorneys deem the terms to be fair and equitable to their respective clients, negotiations should be minimal. However, if the parties are no longer on the same page, or if the reviewing attorney does not believe the terms to be fair and equitable to their client, negotiations can take longer and be more extensive. Therefore, it is always advised that you and your partner keep the lines of communication open amongst yourselves and try to stay on the same page during this process.

Once both parties have approved of the agreement it is time to move toward  the finish line and schedule your formal signing. A signing is a meeting in which both attorneys, both parties, and a licensed notary are present to witness the signing of the agreement. You will not be required to sign the agreement prior to this date.

So, where is a signing held? The signing is often hosted by the drafting attorney. However, in the wake of COVID, many attorneys and parties are opting to hold signings via Zoom. This is also often more convenient for the parties as it allows the signing to be done from the comfort of your home and reduces the need to travel to an actual office. The lack of travel time also offers more flexibility and options for scheduling.

What can you expect of a signing? While  the way in which each attorney handles signings, and the compiling of the final document can vary, the general gist of the meeting is relatively the same. On the day of signing, you and your partner will  appear via Zoom from the same location so that you can sign the same agreement and have a hard copy of the agreement ready to sign. Once the signing has begun, the host will introduce the signing and each attorney will be given a chance to ask their client any questions. Once you are instructed to do so, you and your partner will be required to sign and/or initial each page of the agreement and ensure that the notary can witness the signing of each page. With that said, it is always advised that you speak with your attorney prior to the scheduled signing to get a brief run-down of what you can expect from the signing.

Once your agreement is signed, and stamped by a notary, you should receive a fully executed agreement from your attorney. It is at this time that your agreement will be deemed legally enforceable upon marriage.

If you or your future spouse are considering entering into a premarital agreement the attorneys at WARD FAMILY LAW, LLC are well versed in this process from start to finish. Contact our founder, Jennifer R. Ward, Esq., at jward@wardfamilylawchicago.com to set up your free consultation.