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olume 161, No. 118

HICAGOLAWBULLETIN.COM WEDNESDAY, JUNE 17, 2015

Post-nuptial agreement or separation

may be viable option for some clients

hile post-nuptial

agreements, legal

separations and di-

vorce have drasti-

cally different ef-

fects, all three options are gov-

erned by various sections of the

Illinois Marriage and Dissolution

of Marriage Act.

The parties remain married

when creating a post-nuptial

agreement and when entering into

a legal separation. In contrast, the

parties’marriage completely dis-

solves when a judgment is entered

in a divorce.

Post-nuptial agreements and le-

gal separations are less traversed

paths, however, these options may

be appropriate over divorce de-

pending on the client’s personal

needs or desires.

Post-nuptial agreements

A post-nuptial agreement is a

contract entered into by married

parties and is not prepared in an-

ticipation of a divorce. Rather, it

serves as a guideline for how par-

ties would divide their assets and

income in the event of death, di-

vorce or separation.

The purpose of a post-nuptial

agreement is to limit contested

issues should the couple later de-

cide to divorce or if one party

dies. Post-nuptial agreements

strive to promote harmony in the

present and future.

Similar to a pre-nuptial agree-

ment, issues of child support, cus-

tody and visitation should

not be included. Rather,

post-nuptial agreements

often include back-

ground information

about the parties and

their children, financial

disclosures, property

(current and future),

provisions in the event of

death, should the couple

divorce, and property division.

A post-nuptial agreement may

be a good option for a client look-

ing to protect nonmartial assets

—any assets acquired before the

marriage or by gift or inheritance

during the marriage.

Both parties must participate in

the negotiation to ensure ade-

quate disclosures and to avoid fu-

ture issues surrounding the en-

forceability of the agreement. It is

recommended that each party be

represented by his or her own

attorney to increase the chance of

the agreement being enforceable.

For ensured enforceability, the

parties and attorneys should gath-

er with a court reporter and fully

review the agreement before sign-

ing it. Both attorneys should direct

their clients to disclose all income,

assets and liabilities to minimize

the risk of future litigation.

It should come as no surprise

that courts have a major say in

the validity of a post-nuptial

agreement. Courts are authorized

to find post-nuptial agreements

unconscionable even if the party

was provided with adequate finan-

cial disclosures or waived his or

her right to disclosures and pos-

sessed adequate knowledge of fi-

n a n c e s .

Furthermore, the principles of

contract law apply to post-nuptial

agreements. Courts often look to

whether the agreement has ad-

equate consideration to be en-

forceable. See In re Marriage of

Ozma Tabassum, 377 Ill.App.3d

761, 770 (2008).

When an agreement is chal-

lenged, there is no hard-and-fast

rule provided by the courts and

post-nuptial agreements are ex-

amined case by case.

Legal separation

A legal separation is sought by

parties who wish to remain mar-

ried but desire to live apart. Ac-

cording to Section 402 of the

IMDMA, the parties may reside

together at the time a legal sep-

aration is sought but may not re-

side together when the judgment

is granted.

The purpose of a legal sepa-

ration is to provide clients with an

alternative to divorce as well as

the right to support. A legal sep-

aration may be appropriate for

clients who are opposed to di-

vorce for religious or moral rea-

sons, do not wish to remarry or

wish to formalize their separation

before deciding whether divorce is

ultimately the route they take.

Common topics in separation

agreements include custody, sup-

port, property division, tax con-

siderations and health insurance.

Herein lie many of the distinc-

tions between legal separation,

post-nuptial agreements and di-

vorce and when counsel may di-

rect a client in a particular di-

r e c t i o n .

Unlike a post-nuptial

agreement, the parties in

a legal separation may

determine issues related

to child custody includ-

ing who gets residential

custody, whether joint

custody is appropriate

and how much parent-

ing time the non-custo-

dial parent will have.

The guidelines for calculating

child support and maintenance

are the same as if the parties

were divorcing, however, unlike di-

vorce, maintenance in a legal sep-

aration is always modifiable.

Liability for debts and expenses

by one party after a legal sep-

aration poses a challenge, since

third parties may have the ability

to collect from the spouse not in-

curring the debt. This differs from

divorce, where a spouse is not

liable for debts incurred by a for-

mer spouse after the divorce.

Unlike in divorce, courts do not

have intrinsic authority to award

property in a legal separation. The

court obtains authority to award

and divide property only when the

issue is put before it. Such issues

are decided using Section 503 of

the IMDMA, which is the same

statute used in divorce. Property

obtained after a legal separation is

considered nonmarital, which be-

comes important if a divorce is

later sought.

When a judgment for legal sep-

aration is entered, the parties may

no longer file joint tax returns and

must choose either “s i n g l e ”or

“head of household.”M a i n t e n a n c e

payments may be included as pay-

ee income and deductible by the

p ayo r.

There are several similarities

with divorce on the tax front,

namely tax-filing status is deter-

mined by Dec. 31, the parties can

apportion dependency exemp-

tions, and the property transfer of

the separation is a nontaxable

e v e n t .

Legal separation often allows a

spouse and dependent children to

remain on a health insurance

plan. Under the Consolidated Om-

nibus Budget Reconciliation Act,

or COBRA, legal separation trig-

gers continuity of coverage for

employers with 20-plus employees

for a maximum of 36 months.

The permanency of divorce

may not fit every client’s needs

when they meet with counsel.

Both post-nuptial agreements and

legal separations are viable op-

tions, providing couples with

mechanisms for working out their

personal and financial situations,

while remaining married.

If parties ultimately decide to

divorce, they may decide to adopt

all or some of the terms created

in a post-nuptial or legal sepa-

ration agreement.

A postnuptial agreement is a

contract entered into by married

parties and is not prepared in

anticipation of a divorce.

C O L L A B O RAT I V E

C O N C E P T S

BETH

FAW V E R

MCCO R M A C K

Beth Fawver McCormack is a partner at

Beermann. She practices exclusively in

family law matters and is a collaborative

law fellow, mediator and child

r e p r e s e n t a t i v e .