Divorce is terrible. Divorce changes everything in both parties’ lives and in their children’s lives. However, the status quo of living in misery and distrust cannot remain either. There must be some kind of half-measure, some kind of remediation in between marriage and divorce. Often, parties will look to a postnuptial agreement (also known as a “postnup” or an antenuptial agreement) as a way to delay divorce and set new terms for an eventual divorce. How does a postnuptial agreement work in Illinois?
A postnuptial agreement is “an agreement entered into during marriage to define each spouse’s property rights in the event of a death or divorce.” Black’s Law Dictionary (11th ed. 2019).
Agreements happen between couples before a divorce is finalized all the time…and Illinois courts will acknowledge them. “To promote amicable settlement of disputes between parties to a marriage attendant upon the dissolution of their marriage, the parties may enter into an agreement containing provisions for disposition of any property owned by either of them, maintenance of either of them, support, parental responsibility allocation of their children, and support of their children” 750 ILCS 5/502(a)
In Illinois a contract is “an agreement between competent parties, upon a consideration sufficient in law, to do or not to do a particular thing.” People v. Dummer (1916), 274 Ill. 637, 640.
Why A Postnuptial Agreement Can Be A Good Idea In Illinois
When divorce is a possibility (but not a certainty), it may be a good idea to set the terms of that divorce in advance via contract.
If the terms of a potential divorce are not set in advance, the terms of the potential divorce will be the Illinois Marriage and Dissolution of Marriage Act, 750 ILCS 5/et al.
“If the parties decide to settle their property rights by mutual agreement rather than by statute, they are bound to the terms of their agreement.” In re Marriage of McLauchlan, 2012 IL App (1st) 102114, ¶ 21.
Marital property that would, normally, be divisible can become non-marital and, thus, non-divisible in an Illinois divorce.
Non-marital property can be “property excluded by valid agreement of the parties, including a premarital agreement or a postnuptial agreement.” 750 ILCS 5/503(a)
A postnuptial agreement could be entered into reflecting that the parties’ fiscal relationship has completely changed over the years (maybe the parties became wealthy and one party wants to keep a business while the other party has no interest in the business (but the non-business-owning-party does want the right to proceeds of the business without becoming a silent partner)).
A postnuptial agreement is often an agreement that governs the separation of the parties. “Separation agreements…which are agreements attendant upon the dissolution of the marriage are postnuptial agreements.” In re Marriage of Barnes, 755 NE 2d 522 – Ill: Appellate Court, 4th Dist. 2001
A postnuptial agreement is also a way to ensure that a spouse doesn’t invoke their right to a spousal share upon the death of the other spouse. “[A] wife can effectively bind herself during the lifetime of her husband to accept the provisions of her husband’s will and thereby be estopped from renouncing it after his death.” Golden v. Golden, 393 Ill. 536, 539-40 (Ill. 1946)
What Conditions Can You Put In A Postnuptial Agreement
Under Illinois law, almost anything can be bargained for in a postnuptial agreement.
Usually, the division of property and maintenance is simply prescribed in advance by a postnuptial agreement.
Some parties may want to include a clause that gets triggered by another parties’ behavior. This is allowed.
Even back in 1876 a postnuptial agreement was deemed valid because “[in consideration that the said wife would and did dismiss her said suit for divorce, condone said causes of divorce, and return and live with defendant, and that he (defendant) would not get intoxicated or’ mistreat her” Phillips v. Meyers, 82 Ill. 67 (1876)
The behavior that is most likely to trigger a clause in a postnuptial agreement is adultery.
There is no Illinois case law specifically regarding adultery triggers in a prenuptial or postnuptial agreement…but there is plenty of case law from other states which is persuasive if not controlling.
“Wife had several grounds upon which to prosecute a divorce, which she did not do at the husband’s request, receiving promises of faithfulness secured by a property distribution, in the event of divorce, satisfactory to wife.” Gilley v. Gilley, 778 S.W.2d 862, 864 (Tenn. Ct. App. 1989)
In reality, after adultery, the non-adulterous spouse is trading additional time married to possibly reconcile in exchange for the terms outlined in the postnuptial agreement.
“[T]he extension of a marriage that would have otherwise been dissolved but for the execution of an agreement to reconcile” is adequate consideration to support a reconciliation agreement. (quotation marks and citation omitted)); In re Marriage of Tabassum & Younis, 881 N.E.2d 396, 407-409 (Ill. App. Ct. 2007)
Adultery does not even need to be mentioned as a trigger in a postnuptial agreement because either party can get divorced anytime they want under the conditions of the divorce.
If provable adultery triggers a different award of assets or maintenance, the unconscionability of the award may come into question. Is it “unconscionable [a spouse] to agree to risk all of [their] net worth… that [they] would not commit adultery in the future?” Lloyd v. Niceta, 93 Term 2021, Md. App.
Enforcing a penalty in a prenuptial agreement will be challenging. The facts triggering terms would have to be proven with competent evidence. For adultery, would this require evidence of actual sex between a spouse and a third party or would circumstantial evidence (a car parked outside a third parties house overnight) be sufficient?
How To Ensure A Postnuptial Contract Is Valid In Illinois
A postnuptial agreement is a contract between you and your spouse.
“The basic requirements of a contract are an offer, an acceptance, and consideration. Consideration is defined as a bargained-for exchange of promises or performance. An act or promise that benefits one party or is a detriment to the other party is consideration sufficient to support a contract.” In re Marriage of Tabassum and Younis, 881 NE 2d 396 – Ill: Appellate Court, 2nd Dist. 2007
The postnuptial agreement in written form is the offer. The signature on the postnuptial agreement is the acceptance. The terms of the postnuptial agreement are the consideration.
Even agreeing NOT to get something is sufficient consideration for a bargain to be deemed valid.
“[I]t is well settled that a mutual release of property rights by a husband and wife is adequate consideration to support a post-nuptial agreement.” In re Estate of Brosseau, 531 NE 2d 158 – Ill: Appellate Court, 3rd Dist. 1988
The postnuptial agreement needs to have specific terms that the parties can follow and the court can enforce if those terms are not followed.
“For the contract to be enforceable, the material terms must be definite and certain, meaning that the court is enabled from the terms and provisions, under proper rules of construction and applicable principles of equity, to ascertain what the parties have agreed to do.” In re Marriage of Haller, 980 NE 2d 261 – Ill: Appellate Court, 5th Dist. 2012
If the postnuptial agreement is valid, that postnuptial agreement will be enforceable.
“Property settlement agreements, which have been assented to by both parties, may not be cancelled solely because one party withdraws his assent prior to the entry of the judgment; a settlement agreement should not be disregarded simply because one party has second thoughts.” IN RE MARRIAGE OF STOKER AND STOKER, 2021 IL App (5th) 200301 – Ill: Appellate Court, 5th Dist. 2021
Establishing that the postnuptial agreement is valid or invalid is usually the first order of business in an Illinois divorce.
A declaratory judgment is “a binding adjudication that establishes the rights and other legal relations of the parties without providing for ordering enforcement.” Black’s Law Dictionary (11th ed. 2019).
“[A] declaratory judgment [can be] entered finding that an antenuptial agreement, entered into by the parties, was valid, applied in the event of divorce” In re Marriage of Byrne, 179 Ill. App. 3d 944, 945 (Ill. App. Ct. 1989)
How To Challenge A Postnuptial Agreement In Illinois
Signed, written agreements are presumed to be valid. Postnuptial agreements are no different.
“Although an agreement executed during the marriage which modifies the legal duties of married people to one another may be void against public policy. [Post]nuptial agreements determining the rights of spouses to property or maintenance are valid and enforceable so long as (1) an unforeseen condition of penury is not created due to lack of property resources or lack of employability (2) the agreement is entered into with full knowledge and without fraud, duress, or coercion and (3) the agreement is fair and reasonable” Warren v. Warren, 523 NE 2d 680 – Ill: Appellate Court, 5th Dist. 1988
Conditions 1 and 3 are, essentially, asking “is the agreement unconscionable?”
Penury means “extreme poverty.” Obviously, any agreement that left one spouse in extreme poverty would be unconscionable.
Determining if an agreement is “fair and reasonable” requires a little more analysis.“In order for an antenuptial agreement to be fair and reasonable, Illinois requires that the agreement guarantee both parties an equitable financial settlement in lieu of a waiver of their rights to property or maintenance.” In re Marriage of Murphy, 834 NE 2d 56 – Ill: Appellate Court, 3rd Dist. 2005
“Agreements regarding the disposition of property and maintenance are binding upon the court unless they are found to be unconscionable.” In re Marriage of Hightower, 358 Ill. App. 3d 165, 171 (2005)
Unconscionability is the “[d]egree of unreasonableness and unfairness of a contract or deal prompting a court to modify or nullify it.” Black’s Law Dictionary (10th ed. 2014)
There are two kinds of unconscionability when analyzing a postnuptial agreement: substantive unconscionability and procedural unconscionability.
“Unconscionability can be either “procedural” or “substantive” or a combination of both” Razor v. Hyundai Motor America, 222 Ill. 2d 75, 100 (Ill. 2006)
“[S]ubstantive unconscionability refers to terms that are inordinately one-sided in one party’s favor.” Kinkel v. Cingular Wireless, 223 Ill. 2d 1, 28 (Ill. 2006)(Citations Omitted)
An Illinois divorce court determines substantive unconscionability by looking to the parties’ “relative economic positions immediately following the making of the agreement.” (Emphasis omitted.) In re Marriage of Nilles, 2011 IL App (2d) 100528
“Procedural unconscionability” is a finding that process by which the parties negotiated the postnuptial agreement was fundamentally unfair.
“Procedural unconscionability refers to a situation where a term is so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware he was agreeing to it, and also takes into account a lack of bargaining power.” Razor v. Hyundai Motor America, 222 Ill. 2d 75, 100 (Ill. 2006)
“Th[e] analysis [to determine procedural unconscionability] also takes into account the disparity of bargaining power between the drafter of the contract and the party claiming unconscionability.” Kinkel v. Cingular Wireless, 223 Ill. 2d 1, 22 (Ill. 2006)
To determine whether procedural unconscionability exists a court will consider “all of the circumstances surrounding the transaction, the manner in which the contract was entered into, whether each party had a reasonable opportunity to understand the terms of the contract, and whether important terms were hidden in a maze of fine print.” Woodrum v. Woodrum (In re Marriage of Woodrum), 426 Ill. Dec. 99, 107 (Ill. App. Ct. 2018)
Procedural unconscionability will usually hinge on whether there was appropriate disclosure of both parties assets and incomes.
The proper disclosure required in a postnuptial agreement is not specifically described in Illinois law.
“We question whether financial disclosures are required in postmarital reconciliation agreements….[when there are] statutes requiring financial disclosures before parties to dissolutions agreed to resolve property issues [those statutes] did not apply to postmarital agreements that contemplated reconciliation and were not executed in contemplation of imminent divorce.” In re Marriage of Tabassum and Younis, 881 NE 2d 396 – Ill: Appellate Court, 2nd Dist. 2007
This is the key distinction between postnuptial and prenuptial agreements. In Illinois, prenuptial agreements have strict disclosure requirements in order to be deemed valid and conscionable.
Premarital agreements are governed by the Illinois Uniform Premarital Agreement Act, 750 ILCS 10.
The Illinois Uniform Premarital Agreement only applies to agreements before the marriage is established.
“”Premarital agreement” means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.” 750 ILCS 10/2(1)
“A premarital agreement is not enforceable if the party against whom enforcement is sought proves that:
(i) [That they were] not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
(ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and
(iii) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.” 750 ILCS 10/7(a)
Because 750 ILCS 10 does not apply to postnuptial agreements, a party trying to invalidate a postnuptial agreements for procedural unconscionability will have to lean on fraud.
“In order to be fraudulent, a misrepresentation must consist of a false statement of material fact, known to be false by the party making it, made for the purpose of inducing the other party to act in reliance on its truth, and in fact relied upon by the other party. Fraud may consist in the concealment of what is true as well as in the assertion of what is false where the concealment is shown to have been done with the intention to deceive under circumstances creating an opportunity and duty to speak. Fraud must be established by clear and convincing evidence.” In re Marriage of Richardson, 606 NE 2d 56 – Ill: Appellate Court, 1st Dist., 6th Div. 1992
In a postnuptial agreement, the fraud is never going to be where one spouse shows the other spouse overtly fraudulent documents. The fraud will always be the conscious failure to disclose some marital asset or income.
“Concealment of existing material fact is actionable where it is employed as a device to mislead such as where it relates to a matter upon which plaintiff could be expected to rely in determining whether to engage in conduct in question or such that had the defrauded party been aware of the concealed fact, he would have acted differently. This court has held that in instances where the trial court finds that respondent shielded certain marital assets from the petitioner, and thus prevented petitioner from making an informed decision to enter into the property settlement, or the trial court from making a fair and equitable distribution of the marital property in just proportion, the court should find the settlement unconscionable.” In re Marriage of Richardson, 606 NE 2d 56 – Ill: Appellate Court, 1st Dist., 6th Div. 1992
Finally, if unconscionability and fraud cannot undo a postnuptial agreement, duress may be an option to invalidate the agreement.
“Duress includes oppression, undue influence, or taking undue advantage of the stress of another to the point where another is deprived of the exercise of free will. Evidence of duress must be clear and convincing before a court may set aside a marital settlement agreement on this basis.” In re Marriage of Richardson, 606 NE 2d 56 – Ill: Appellate Court, 1st Dist., 6th Div. 1992 (citations omitted)
In re Marriage of Richardson had facts where the court found sufficient duress to undo a post-nuptial agreement in that “[i]t is evident that [husband] intended to divorce [wife]; nevertheless, [husband] resorted to such tactics as promising [wife] that “they would be a family again” In re Marriage of Richardson, 606 NE 2d 56 – Ill: Appellate Court, 1st Dist., 6th Div. 1992
While the promise of remaining a family may induce duress, the threat of losing your children in a divorce may NOT be duress.
“While wife’s fear that she may lose custody of her children no doubt caused her anxiety, we do not recognize this as a factor impairing her ability to exercise her free will and make a meaningful choice when the record reflects that she agreed to negotiations, took part in the negotiations and then presented the substance of these negotiations, under oath, to the trial court. Many spouses may experience anxiety when appearing in court because of a petition to dissolve a marriage and this anxiety is no doubt heightened when one fears she may lose custody of her children; however, this factor, without more, does not clearly and convincingly demonstrate that one lacked the ability to make a voluntary decision.” In re Marriage of Steadman, 670 NE 2d 1146 – Ill: Appellate Court, 3rd Dist. 1996
Clearly, every case of duress is fact-specific to the particular divorce case.
Temporary Orders When A Postnuptial Agreement Exists
During the course of an Illinois divorce, “[e]ither party may petition or move for Temporary maintenance or temporary support, accompanied by an affidavit , accompanied by an affidavit as to the factual basis for the relief requested.” 750 ILCS 501(a)(1)
Child support cannot be contracted for outside of an Illinois divorce court, so temporary child support can always be requested. Temporary maintenance may be contracted away.
Parties to a divorce can also request interim attorney’s fees to aid in their divorce litigation.
“[I]nterim attorney’s fees and costs” means attorney’s fees and costs, including an allowance from the other party for a retainer fee to obtain an attorney, assessed from time to time while a case is pending, in favor of the petitioning party’s current counsel, for reasonable fees and costs either already incurred or to be incurred, and “interim award” means an award of interim attorney’s fees and costs, including an allowance from the other party for a retainer fee to obtain an attorney.”750 ICLS 5/501(c-1)
Postnuptial agreements will often include clauses stating that a party cannot ask for temporary support or attorney’s fees. The language of the postnuptial agreement must be examined closely to determine the agreement’s exact terms. For example, an Illinois divorce “court [can] grant [a party’s] request for temporary relief, finding that under the premarital agreement the parties had only waived maintenance “upon dissolution”—not upon the filing of a petition for dissolution of marriage.” In re Marriage of Woodrum, 115 NE 3d 1021 – Ill: Appellate Court, 3rd Dist. 2018
Illinois courts can circumvent a prenuptial agreement’s bar on temporary (or permanent) relief.
“If a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the agreement undue hardship in light of circumstances not reasonably foreseeable at the time of the execution of the agreement, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid such hardship.” 750 ILCS 10/7(b)
While this is analogous it does NOT apply to postnuptial agreements. There is no statute that bars temporary relief for postnuptial agreements, however.
Postnuptial agreements must rely on the substantive unconscionability of a bar on temporary relief.
A bar on a request for interim attorney’s fees would clearly be unconscionable, in my opinion.
A bar on temporary maintenance would only be unconscionable if the amount of temporary maintenance was totally insufficient.
Postnuptial agreements can either make an Illinois divorce much easier…or much more complicated. If you are interested in drafting, enforcing or invalidating a postnuptial agreement contact my Chicago, Illinois family law firm to speak with an experienced Illinois divorce attorney.
source https://rdklegal.com/postnuptial-agreements-in-illinois/
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