Consider a Prenuptial Agreement for Real Estate Concerns
As the average age of those entering marriage for the first time continues to rise, along with the record rate of remarriage around the country, more and more couples are faced with increasingly complicated property ownership situation. In previous generations, an average couple would pursue marriage shortly after high school or college, rent a home for a short time, then move onto home ownership as they build their marital estate together. Of course, that was not the case for every couple, but for many, such a progression was somewhat expected.
Today, however, individuals are approaching marriage altogether differently. Many have already had years to build wealth, start and sell businesses, and accumulate assets. In fact, it is not uncommon for both halves of a married couple to each own their own homes prior to getting married. However, such a scenario presents a number of options—and a number of challenges—for couple pursuing marriage and may a prenuptial agreement may be necessary to prevent future problems.
Real Estate Possibilities
When both you and your soon-to-be spouse own your own homes, you will need to make some decision on how to proceed. You could:
- Sell both homes and purchase a new marital home together;
- Move into one home and sell the other; or
- Move into one home and keep the other as a rental property.
The right option for you will depend entirely on your individual situation, but it is important to remember the potential impact of each situation. Under Illinois law, any property belonging to you at the time of your marriage is not considered marital property, and, unless you choose to handle it otherwise, the proceeds gained by selling the property would not be marital property either.
Where these issues can get complicated is if you and your spouse begin to invest marital funds into one property or the other. For example, if you bought your home a few years before getting married, you probably had a significant amount remaining on your mortgage. Using marital funds to pay the mortgage would not necessarily make your home marital property, but a court may see it that way. Likewise, investing marital money into a home being used as a rental property could potentially create issues should your marriage ever deteriorate to the point of divorce.
How a Prenuptial Agreement Can Help
You and your spouse, in such a situation, would be strongly advised to develop a prenuptial agreement that addresses the ownership of all existing and realistically possible real estate interests. Doing so would require detailed research and negotiation regarding how the proceeds of a sale or rentals are to be used, and how each property is to be considered should divorce become a reality. An attorney, along with real estate appraisers and other professionals can help you understand the specific details applicable to your case.
For more information about drafting a prenuptial agreement or any other aspect of family law, contact an experienced Geneva divorce lawyer. We will help you find the answers you need as you are preparing for marriage or, conversely, as you are trying to end one. Call 630-232-9700 today to schedule an appointment at the Law Offices of Douglas B. Warlick & Associates.