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I am in Illinois and I have spoken with 2 attorneys. Please
tell me these guys are idiots.
My fiancee and I have discussed the financial plans for our
future married life in detail. We decided we would like to
setup Joint accounts for what we consider "marriage" expenses
and investments, but still keep separate all "new money" we
manage to save in our own separate names.
The whole point of this is that we do not want to ever fight
over how much her latest dresses cost or how much I'm spending
on my expensive hobbies, or how much I lost in the stock market --
that stuff will not touch the joint finances.
We also decided that in the event of a divorce, the "hers" and
"mine" should be absolutely untouchable, and the "ours" would
be divided in whatever way a judge deems fair (e.g. if I become
a raving cash-burning drug addict, she'd get whatever is left).
Guess what... both attorneys said that such a provision would
be unenforceable in an Illinois prenuptial! You CANNOT stipulate
anything regarding marital assets, which by definition is anything
you acquire during the marriage, regardless of whose paycheck the
cash came from.
You can only protect pre-marital property (which is already separate
anyway, without a prenup).
An Illinois prenuptial also allows you to disinherit your spouse.
Without a prenuptial, putting such a clause in a Will would cause
the Will to be void. We have no interest in that aspect of it,
so, for us, a prenuptial agreement would be essentially worthless,
or at least not worth the $2000+ in lawyer's fees.
What are the attorneys missing? Is there some kind of "special"
prenup we need to ask about, by a different name? Maybe a combination
of prenup with two Revocable Trusts to hold our separate assets?
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Alex Goorgle wrote:
I am in Illinois and I have spoken with 2 attorneys. Please
tell me these guys are idiots.
Or perhaps they have knowledge that you lack.
My fiancee and I have discussed the financial plans for our
future married life in detail. We decided we would like to
setup Joint accounts for what we consider "marriage" expenses
and investments, but still keep separate all "new money" we
manage to save in our own separate names.
You can still do this with or without a pre-nup of any kind. The money will
be part of the community, but each of you can dispose of 'hers' and 'his'
without consulting with the other.
The whole point of this is that we do not want to ever fight
over how much her latest dresses cost or how much I'm spending
on my expensive hobbies, or how much I lost in the stock market --
that stuff will not touch the joint finances.
You can also choose not to fight without a pre-nup. In fact you can separate
your finances and just not show your transactions to each other. The money
kept separately will still be part of the community. If you divorce, you can
divide the community assets pretty much as you choose if you both agree at
the time to this. A court would almost always endorse such a divorce
settlement. People divide property upon divorce every day using meditation.
I am one such mediator. The court's deciding on asset split (and other
matters) is only for those who can't negotiate a separation agreement.
We also decided that in the event of a divorce, the "hers" and
"mine" should be absolutely untouchable, and the "ours" would
be divided in whatever way a judge deems fair (e.g. if I become
a raving cash-burning drug addict, she'd get whatever is left).
You can decide all you want, but the Illinois legislature has the authority.
Guess what... both attorneys said that such a provision would
be unenforceable in an Illinois prenuptial! You CANNOT stipulate
anything regarding marital assets, which by definition is anything
you acquire during the marriage, regardless of whose paycheck the
cash came from.
You can only protect pre-marital property (which is already separate
anyway, without a prenup).
No, you are wrong here. Separate property can and often does become part of
the community. The triggers for this differ state by state, but they are
there. The pre-nup can halt those triggers - which is the prime purpose of
the things. Usually folks get them to protect pre-existing assets from being
part of the community because they wish to bequest assets (upon demise) to
children from a different union.
An Illinois prenuptial also allows you to disinherit your spouse.
Without a prenuptial, putting such a clause in a Will would cause
the Will to be void. We have no interest in that aspect of it,
so, for us, a prenuptial agreement would be essentially worthless,
or at least not worth the $2000+ in lawyer's fees.
Don't get it then, but consider *carefully* that your current separate
property can and most likely will, become part of the community without that
agreement. Why not ask the lawyers what those triggers are?
What are the attorneys missing? Is there some kind of "special"
prenup we need to ask about, by a different name? Maybe a combination
of prenup with two Revocable Trusts to hold our separate assets?
I'm amazed that you assume the lawyers are missing something here. I suggest
you look into the mirror and ask what the person looking back at you is
missing.
-paul
ianal
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Alex Goorgle <goorgle@hotmail.com> wrote:
I am in Illinois and I have spoken with 2 attorneys. Please
tell me these guys are idiots.
Two attorneys? _One_ might be an idiot. Your chances of getting two
idiots in a row are very small. OTOH, it's possible you didn't have
enough discussion to explore alternative ways of accomplishing what
you want.
[OP and spouse want to establish both "joint" and "separate"
accounts, with the "joint" accounts being community property and the
"separate" accounts being separate property. In the event of a
divorce the community property would be divided however a judge deems
"fair".
What are the attorneys missing? Is there some kind of "special"
prenup we need to ask about, by a different name? Maybe a combination
of prenup with two Revocable Trusts to hold our separate assets?
This is for discussion purposes only, and is not legal advice. I'm
not a lawyer. If you want legal advice, hire a lawyer.
I don't know about Illinois law. I live in California. My wife and I
executed an agreement (not even a "pre-nuptial" - we did it shortly
after the marriage) that states that assets held in both our names is
Community Property, and any asset held in only one name is Separate
Property.
This was drafted by one lawyer. Later on another lawyer said that he
and his wife have the same agreement. We have had no trouble, except
for one brokerage that insisted on some really weird wording in the
titles of our accounts.
Maybe some experts in Illinois law can clarify if there's any way to
accomplish what you want to do.
For example, would it be possible for one spouse to periodically make
a "gift" to the other of the money to be deposited in a separate
account? Gifts are not community property in most states.
Of course, if your spouse suddenly stops being willing to sign off on
these "gifts", you'd have a problem. But at least you'd _know_ you
have a problem and could start divorce proceedings before the damage
becomes too great.
The other area that might be questionable is the idea the community
property be divided arbitrarily by a judge. In California, at least,
Community Property is divided equally, without regard for other assets
or, partner's relative spending habits, etc. If one partner would be
impoverished by this the judge may order "spousal support" (formerly
"alimony") for some period to give that partner a chance to get back
on his/her feet. But that is different from an unequal division of
the Community.
This might happen if, for example, one partner works and the other
stays home and takes care of the house and children. This would
likely leave the stay-at-home spouse with a shortage of marketable
skills, so the judge might order spousal support for one or two years
while the spouse goes to school, takes "internship" jobs, or otherwise
acquires the skills needed to survive as an independent person.
The concept of "alimony" that is paid forever (or until the recipient
remarries) is pretty much gone in California.
--
I pledge allegiance to the Constitution of the United States of America, and
to the republic which it established, one nation from many peoples, promising
liberty and justice for all.
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Barry Gold wrote:
<snip assumption of Il idiot lawyers>
The other area that might be questionable is the idea the community
property be divided arbitrarily by a judge. In California, at least,
Community Property is divided equally, without regard for other assets
or, partner's relative spending habits, etc. If one partner would be
impoverished by this the judge may order "spousal support" (formerly
"alimony") for some period to give that partner a chance to get back
on his/her feet. But that is different from an unequal division of
the Community.
If the couple agrees, in mediation or otherwise, to unevenly distribute the
property, will the court go along or will it force what it thinks is equal?
In NM, the court will endorse whatever the couple agrees to upon split
unless it's unconsciencable. Assuning both parties were represented by
attorneys, I doubt the court would interfere no matter what. I have first
hand knowledge of such post marital agreements in NM so I'm curious to know
about CA.
-paul
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In fact you can separate
your finances and just not show your transactions to each other. The money
kept separately will still be part of the community.
Not entirely correct, IMHO. If the other spouse has no knowledge
of it, it's not considered part of the community, at least for the
purpose of calculating tax liabilities if married filing separate
returns.
As an aside, I didn't think IL was a community property state.
The IRS list from publication 555 is AZ, CA, ID, LA, NV, NM,
TX, WA, WI, ignoring the community property election for AK.
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Alex Goorgle wrote:
Or perhaps they have knowledge that you lack.
I was afraid of that :-]
My fiancee and I have discussed the financial plans for our
future married life in detail. We decided we would like to
setup Joint accounts for what we consider "marriage" expenses
and investments, but still keep separate all "new money" we
manage to save in our own separate names.
You can still do this with or without a pre-nup of any kind. The money will
be part of the community, but each of you can dispose of 'hers' and 'his'
without consulting with the other.
What do you mean by "dispose"? If I "dispose" of my extra income
by buying a yacht, the yacht is marital property!
You can also choose not to fight without a pre-nup. In fact you can separate
your finances and just not show your transactions to each other. The money
kept separately will still be part of the community. If you divorce, you can
divide the community assets pretty much as you choose if you both agree at
the time to this.
I think the presumption behind a pre-nuptial agreement is that people
in a divorce situation become adversarial. So whatever we agree on now,
doesn't matter unless it's committed to a binding document!
You can only protect pre-marital property (which is already separate
anyway, without a prenup).
No, you are wrong here. Separate property can and often does become part of
the community. The triggers for this differ state by state, but they are
there. The pre-nup can halt those triggers - which is the prime purpose of
the things.
The triggers in Illinois are very few -- essentially, commingling and
transmutation (deliberate change of title to joint names).
What are the attorneys missing? Is there some kind of "special"
prenup we need to ask about, by a different name? Maybe a combination
of prenup with two Revocable Trusts to hold our separate assets?
I'm amazed that you assume the lawyers are missing something here. I suggest
you look into the mirror and ask what the person looking back at you is
missing.
That was just a bit of inflamatory drivel to get the discussion going :-)
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Alex Goorgle wrote:
"Paul Cassel" <pcassel1@earthlnik.net> wrote in message
What do you mean by "dispose"? If I "dispose" of my extra income
by buying a yacht, the yacht is marital property!
Yes, the yacht is part of the community, but upon divorce, you two can agree
that the yacht is yours. For sure, if she gets nasty she can claim half of
it. Let me state right now that you're hardly the only folks with this
problem. Many older folks find that legislative interference or agency rules
make it undesirable to get married. Many old folks 'live in sin' to protect
assets or pensions.
I think the presumption behind a pre-nuptial agreement is that people
in a divorce situation become adversarial. So whatever we agree on
now, doesn't matter unless it's committed to a binding document!
Which is why, if you have pre-existing assets or you wish to maintain
utterly separate estates, marriage in IL may be impossible for you. Just
because you want it, doesn't mean you can have it.
The triggers in Illinois are very few -- essentially, commingling and
transmutation (deliberate change of title to joint names).
That't typical. Now, say you put $1 of community money into your $1 MM
brokerage account. Your account now isn't $1 community, but all community.
Again, civil marriage may not be tolerable for you folks.
That was just a bit of inflamatory drivel to get the discussion going
Well, it worked. There is a fantasy that if you throw enough money and
influential enough lawyers at anything, you can get any outcome you desire.
That's a myth. Just because the law can't be bent to your wishes doesn't
mean the lawyers were stupid or lazy. Right or wrong, the various States
believe they have an interest in regulating the instution of marriage and
while you can exploit certain soft boundaries, you can't wholesale construct
things to your individual liking any more than you can demand higher speed
limits because you drive a Ferrari.
-paul
ianal
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The triggers in Illinois are very few -- essentially, commingling and
transmutation (deliberate change of title to joint names).
That't typical. Now, say you put $1 of community money into your $1 MM
brokerage account. Your account now isn't $1 community, but all community.
Again, civil marriage may not be tolerable for you folks.
What happens if you put $10K of community money into the brokerage account
of a $100K revocable trust that has the individual as the sole beneficiary
and trustee?
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goorgle@hotmail.com (Alex Goorgle) blurted out
"Paul Cassel" <pcassel1@earthlnik.net> wrote
The triggers in Illinois are very few -- essentially,
commingling and transmutation (deliberate change of title to
joint names).
What happens if you put $10K of community money into the
brokerage account of a $100K revocable trust that has the
individual as the sole beneficiary and trustee?
Again, it depends on many factors. At least in California when a
single revocable trust is created for two spouses, the property in
the trust retains the same character it had before going into the
trust. On the other hand, if the trust has only one bank account
that started out as separate property, but community funds are
deposited in it, it all may be transmuted to community.
Stu
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