Last time, we began looking at the divorce case of Richard Stephenson and the dispute him and his wife are currently having with regard to their prenuptial agreement. As we noted, the agreement specifies that property owned individually prior to the couple’s marriage, and property acquired individually during the marriage, was to remain separate in the event of divorce.
The issue now is determining how to classify certain items under the terms of the couple’s agreement: as marital or separate. As we explained last time, prenuptial agreements may specify not only a distribution scheme to replace the default rules established by state statute, but they may also assign different definitions to the terms marital and separate.
What would be the benefit of assigning different definitions the terms marital and separate under a prenuptial agreement? First of all, doing so allows a couple to better control how a court will interpret the agreement in the event of divorce. Second of all, though, assigning a different definition to the term marital allows a couple to limit the expansiveness of the term.
Illinois, like many other states, generally considers marital property to be all property acquired by either spouse during the marriage, regardless of how the property is titled. There may be some exceptions, but that is a rather expansive definition. For couples who only want to keep certain assets separate in the event of divorce, the state’s definition may sufficient alongside exceptions for specific assets listed in the prenuptial agreement.
Couples who want a more thorough financial separation, though, may wish to narrowly define what qualifies as marital property. With careful planning and negotiation, they are able to do so.
As always, though, it is important for couples to work with experienced legal counsel to ensure their interests are advocated and that everything is done correctly.