Some people may be confused about alimony and prenups. Can you get a prenup but still receive alimony? The answer is absolutely yes. But it is a decision that you and your future spouse need to make together and agree to the terms within the prenuptial agreement. Alimony (sometimes called spousal support or maintenance) is basically a fancy word for financial support that is paid from one spouse to the other. Let’s break this topic down for you, from state laws to creative ways to address alimony in your prenup.
What is a prenup?
A prenup is a contract between two soon-to-be spouses that lays out various terms that apply both during the marriage and in the event that the marriage ends. For example, terms about how property should be managed during the marriage and how property should be divided in a divorce. Or how alimony should be handled in the case of a divorce (i.e., what this article is all about). Prenups also have certain requirements that must be followed if you want them to hold up in court. These requirements are dictated state-by-state. What is required in Pennsylvania isn’t necessarily the same requirements as what is mandated in California.
What is alimony?
Alimony, also called spousal support or maintenance (depending on which state you’re in), is the financial support from one spouse to the other in the event of divorce. Alimony is dictated by state law, so each state has its own rules around when to award alimony and how much is appropriate. It’s a complex area of law, but in essence, most states utilize a list of factors to assess if alimony is appropriate in the situation and then a calculator to determine how much should be paid.
Let’s look at an example of how alimony works. In Illinois, the spousal maintenance (a.k.a., alimony) formula is laid out in 750 ILCS 5/504(b-1). The statute says (in part): “The amount of maintenance under this paragraph (1) shall be calculated by taking 33 1/3% of the payor’s net annual income minus 25% of the payee’s net annual income. The amount calculated as maintenance, however, when added to the net income of the payee, shall not result in the payee receiving an amount that is in excess of 40% of the combined net income of the parties.”
Keep in mind, alimony is different from state to state. How Illinois calculates alimony is not the same as how other states may do so. Whether or not you will be awarded alimony or be required to pay alimony (and how much) will depend on your state laws.
How do you include alimony in a prenup?
You can address alimony in several different ways, including waiving it entirely. Waiving it entirely means that neither party can request alimony in the event of a divorce. Deciding whether to waive alimony depends on factors like financial independence, potential income during marriage, and plans for caregiving. Some couples may choose to waive alimony for a specific period, such as until a certain duration of marriage, to allow for changes in circumstances over time. For example, only waiving alimony if children are NOT had. If children are had, then alimony stays on the table. Keep in mind legal requirements vary by state; for instance, in California, legal representation is mandatory for enforcing alimony waivers in prenups.
Another way to address alimony in a prenup is not to address it at all, leaving the decision to the couple and/or the court at the time of divorce. This approach acknowledges the uncertainty of future circumstances and entrusts the court to make fair determinations.
For those who want to leave alimony on the table but don’t like the unknowns of leaving it up to a court, including a lump sum equalization payment instead of alimony can be a good resolution. This involves adding a clause that requires a lump sum payment from one spouse to the other, providing definite financial expectations instead of relying on potential alimony rulings.
Another strategy involves setting caps on the amount and/or duration of alimony in the prenup. Caps can be specified as a fixed amount or a percentage of income, offering predictability for both parties. Additionally, prenups can even restrict which sources of income are considered in alimony calculations. This allows individuals to protect specific income streams, such as rental property earnings, from being factored into alimony determinations by the court.
Can you still receive alimony if you have a prenup?
The answer is yes, but it depends on what you put in your prenup! Did you waive alimony? Did you leave it on the table? You can draft a prenup that also allows for one person to receive alimony still. This may mean (generally) one of three things:
- Leaving it up to the future you (and alternatively a court) to decide: You can leave it up to the future you and your partner to decide if alimony is appropriate. In the event of a divorce, you and your future spouse can agree on alimony privately or ask a court to decide for you. There are guidelines on alimony in every state, so you should speak with an attorney or check out your state’s laws on what entitles a person to alimony.
- Including alimony with a cap or restrictions: You can also include an alimony clause that specifies exactly what the alimony would be, whether that is with caps or restrictions, such as limiting what income sources can be used towards alimony or how much alimony can be paid. You can model it after the formula listed in your state’s statute or come up with your own model.
- Waiving alimony but including a lump sum clause: If you want a more clear, definitive amount, you can waive alimony and offset that with a lump sum clause (a.k.a., a wealth equalization clause), which basically says one party will pay the other party a one-time lump sum payment. For example, Spouse A will pay Spouse B a lump sum of $100,000. And then both parties will waive their right to alimony. This is good for those folks who want something definitive.
Final thoughts
So, there you have it – the answer is YES, you can have your cake and eat it too (that is, alimony AND a prenup). Whether you’re “waving” goodbye to alimony, setting caps, or leaving it all up to the court, it’s all about finding what works for you and your partner. So, we urge you not to forget to pencil in those prenup talks while you’re planning your big day. After all, nothing says “I love you” like a little financial planning, right? Cheers to happily ever afters – with or without alimony!
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
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