Prenuptial Agreements

Many people are hesitant when it comes to signing or even discussing a prenuptial agreement. There is a stigma in today’s society that a prenuptial is a cold-hearted or self-defeating thing to contemplate before entering into expected marital bliss. In reality, a prenuptial agreement has the power to affect rights during marriage and long after divorce. It can be critical to consult with an experienced family law attorney before signing a prenuptial agreement or if you are faced with one potentially being enforced.

A prenuptial agreement, or “prenup,” is a contract two people sign before they are married that governs rights and obligations during the marriage and in the event of separation, death or divorce.

A prenuptial agreement does not go into effect until a couple is married. If the couple never marries, the agreement becomes null.

Without a prenuptial or separation agreement in North Carolina, any property a couple acquires during marriage becomes “joint” property. This means that in the event of divorce it will be divided between the spouses. For this reason, individuals frequently use prenuptial agreements to protect any solo business ventures that they own in a marriage—otherwise, a company you dedicated your entire life to building could be split down the middle in divorce. Further, even individual property owned before the marriage can be swept up into the joint property classification if it is not extremely clear who owned what and when.

Most prenups can resolve at least one of the following issues:

• Each spouse’s right to manage assets and property

• Set spending limits

• Includes the buying, selling, transfer and mortgaging of assets

• Each spouse’s rights to separate or marital property

• Includes management of that property

• Property division (remember, if this is not addressed the default rule in North Carolina is that everything acquired during the marriage is joint)

• Spousal support for either party

• Rights to death benefits from the other party’s insurance policy

• Protect inheritance for children from a previous relationship

• Get rid of either partner’s premarital debts

• Affect child custody or child support for the couples current or future children

First and foremost, a prenuptial agreement must be put in writing and voluntarily signed by both parties. The parties can agree to revise the agreement later on if those amendments are also in writing and signed by both partners.

North Carolina adheres to the Uniform Premarital Agreement Act, which provides two main avenues with which to defend against the enforcement of a prenuptial agreement: involuntariness and unconscionability.

• The Prenuptial Agreement Was Not Voluntary

• This defense guards against situations where a spouse may have been coerced, whether directly or indirectly, into signing a prenuptial agreement.

• Factors the courts here can consider include:

• Did the protesting spouse consult independent legal counsel before signing?

• Is the agreement overall fair?

• Did the non-protesting spouse deceive or misrepresent anything to the other spouse before signing?

• The age and mental and physical condition of the protesting spouse at signing

• Did one of the spouses pressure the other into signing the agreement?

• How much time passed between when the protesting spouse was presented with the proposed agreement and the wedding?

• If an agreement appears last-minute to the court they may consider the agreement unfair and not enforceable.

• The Prenuptial Agreement Was Unconscionable

• The other way to invalidate a prenuptial agreement is if one of the parties was kept in the dark as to the other person’s debts and assets. This makes the agreement so unfair it would be unconscionable. A person, after all, cannot waive rights to property that they did not know existed. To invalidate a prenuptial agreement based on unconscionability, a spouse must prove the following three things:

• The other spouse did not fully disclose his or her financial debts, obligations, and/or assets

• The protesting spouse did not waive the right to see this financial information in the agreement, and

• The protesting spouse had no way at the time of signing to have had adequate knowledge of the other spouse’s financial situation.

• “In the interest of fairness”

• Further, if a judge finds a particular area of a prenuptial agreement grossly unfair or mean-spirited to one party, he or she can pick and choose what parts of the agreement to enforce or throw away the entire agreement altogether. In addition, in the interest of fairness, a judge can essentially add to the terms of a prenup by requiring one party to pay for things like alimony that are not in the original agreement.

• Along these lines, North Carolina law also provides that if part of a prenuptial agreement modifies or does away with spousal support and this causes one of the parties to be eligible for some type of public assistance, the court can require the other party to pay spousal support to the extent that their ex is no longer eligible for welfare.

• For this remedy, the court must find that the welfare-eligible spouse is a “dependent” spouse, which means that he or she is

• actually and substantially dependent on the other for support and maintenance, or

• substantially in need of support and maintenance from the other spouse.

• These considerations make it even more important that both parties speak with a family law attorney both before signing a prenuptial agreement as well as in the event that one of them is trying to enforce the agreement.

If you are planning to be married and are interested in a prenuptial agreement, or are being faced with the enforcement of one, it is important to consult with a local family law attorney who will help ensure your rights are protected. Please contact Arnold & Smith, PLLC today to speak with one of our dedicated family law attorneys about your unique circumstances.