Planning for marriage is critical and should begin as soon as the wedding is being planned, if not sooner. Individuals planning for marriage should start by working with their financial advisors and estate planning and/or family law team. First, individuals should define their short term and long-term priorities and goals, and work with their financial planner to do so. Next, everyone is well advised to consult an estate planning attorney and/or a family law attorney – ideally both – to prepare for the legal ramifications of the marriage. This should be done as far in advance of the marriage date as time allows. That planning may include a premarital agreement. Illinois (USA) law strongly favors upholding premarital agreements, as long as the requirements are met. However, laws very drastically from state to state within the United States and from country to country. Premarital agreements are contracts entered into by two parties in contemplation of marriage that address how property will be divided or distributed upon either death, divorce, or both. The agreement can also address the issue of maintenance (spousal support/alimony) when addressing divorce, among other financial matters. As these matters vary differently, family law attorneys will frequently consult estate planning attorneys to address the death provisions; likewise if an individual is working with an estate planning attorney, it would be recommended to consult a family law attorney to review/draft the divorce provisions. The requirements of a premarital agreement in Illinois are: (i) that it be in writing; (ii) that it be signed by both parties; (iii) it is enforceable without consideration; and requires full disclosure of assets/income. In addition, it is best practices that each party is represented by independent counsel and that counsel is provided a copy of any initial draft (instead of to the other party individually).
In addition, post-marital agreements can be used for happily married couples to clarify expectations as an option for individuals who did not obtain a premarital agreement prior to their marriage. In Illinois, post-marital agreements require consideration (unlike premarital agreements).
Aside from the option of having a premarital and/or post-marital agreement, the titling of assets in the context of marital planning is key as well. Again, the laws regarding titling will vary drastically from state to state within the United States and country and country – which is why it is vital to consult with an attorney in the appropriate jurisdiction. Without proper advice, overall couples tend to commingle their assets, which often has unintended consequences. Titling is about making sure property passes in the manner desired. It is imperative to consider titling of assets during marriage or if contemplating the same. Individuals are frequently unaware that the titling of assets controls not only such factors as the disposition of property at death but whether or not the property will be exposed to liabilities and creditors. There are various ways to title assets depending on the individuals’ needs and wishes. In addition, title may impact how property will be divided in the event of a divorce – for example, non-marital property claims in Illinois. Title may be different for estate purpose versus divorce purposes. For example, for divorce purposes, in many jurisdictions, the concern is when and how the property was acquired. Generally, title does not control classification of property as marital or non-marital property in Illinois. Rather, when and how property was acquired determines classification for divorce purposes in Illinois.
During this planning phase, individuals can also plan for future assets, for example, the purchase of a new home. Other considerations during the planning phase of marriage include educational considerations for current or future children, savings and/or payment of private school tuition and/or undergraduate education, updating basic estate planning documents including but not limited to wills, living wills, and Powers of Attorney for healthcare and property, and reviewing and updating beneficiary designations for retirement accounts and life insurance policies.
The key first step will always be to assemble a team of advisors, who will guide and lead the individual who is planning their marriage through this exciting and important planning phase.