Due to a number of social trends, individuals are entering marriage with more personal assets and property than ever before. The average age of first-time spouses has increased dramatically in the last several decades along with the remarriage rate, while the overall rate of marriage is dropping. This means those who do decide to get married are more likely to have accumulated significant assets, including financial savings and real estate than those of previous generations. While increased wealth and property may be a relatively “nice” problem to have, it is extremely important for a couple to develop a plan or an agreement regarding separate and marital assets, especially assets in the form of real estate.
Two Become One
One of the more common marriage scenarios in today’s society involves two individuals who each own a home prior to getting married. According to Illinois law, property acquired prior to a marriage is not, in most cases, considered marital property. As such, each spouse has the rights to do with his or her home as he or she pleases. Realistically, most couples in this situation are likely to sell one or both of the homes and move into the other, or a new home. This is where a clear plan becomes necessary.
Assume Wife sells her home with the intention of moving into Husband’s home upon their marriage. By law, the proceeds of the sale of her home are considered non-marital property, since they were acquired by selling non-marital property. If she, however, deposits those funds into a joint account intended for the betterment of the marriage, it is possible for the money to lose its identity as non-marital and become part of the marital estate. Should divorce occur down the road, it could be very difficult for her to recover those assets.
Consider a Prenuptial Agreement
There is no right or wrong answer as to how a couple should or should not manage their financial affairs. It is important, however, that each spouse fully understands the potential implications of their decisions. Working with a family law attorney in developing a prenuptial agreement can help eliminate much of the potential uncertainty regarding real estate in marriage and divorce.
If the Husband and Wife in the above scenario had developed a valid prenuptial agreement, they might have been able to negotiate a more mutually beneficial arrangement. For example, they might have specified that the proceeds of her home’s sale were not simply gifted to the marital estate, but rather used to essentially buy a share of the Husband’s home, thereby intentionally and with full awareness, converting his home into marital property as well. In effect, she contributed money to the marital estate and he contributed partial ownership of his home, and the prenuptial agreement recorded it all as intended.
Trustworthy Legal Counsel
If you are considering marriage and are looking for advice on protecting or sharing your existing real estate assets, contact an experienced St. Charles family law attorney. Our knowledgeable team will help you understand the law and how it may apply to your particular case. We will work with you and your future spouse to draft a prenuptial agreement that meets your needs both now and in the future. Schedule your free consultation with Bochte, Kuzniar & Navigato by calling 630-377-7770 today.