Premarital Agreements
Are Premarital and Prenuptial Agreements the Same Thing?
Premarital agreements and prenuptial agreements are interchangeable terms and have the same meaning. These agreements are contracts created before the marriage or civil union of two parties. The contracts are legally binding and detail how things such as assets, debts and spousal support will be divided and/or distributed if one party passes away or the couple dissolves their marriage.
When Is It a Good Idea to Get a Prenuptial Agreement?
While it’s ultimately up to the couple to decide if getting a prenuptial agreement is a good idea, these agreements are highly recommended in certain situations. Some scenarios in which a prenuptial agreement may benefit both parties include:
- One or both spouses have significant assets
- One or both parties are business owners or partners in a business
- Either party has children from a previous marriage
- One or both spouses have debt accumulated before the marriage
- Either party wishes to waive or place limits on spousal support if the marriage is dissolved
What Can You Include in a Prenup in North Carolina?
In North Carolina, prenuptial spousal agreements can include:
- Full disclosures of assets and debts for both parties
- Property division instructions that clearly detail how property will be divided if the parties divorce or separate
- Estate planning provisions
- Business interests and investments of one or both parties
- Provisions on how current and future debt of one or both parties will be handled
What a Prenuptial Agreement Can and Can't Protect or Provide
Prenuptial agreements in North Carolina help protect one or both spouses’ assets in the event of a divorce or separation. Both parties need to understand the limitations of North Carolina law in areas such as child support, custody and illegal matters.
Here’s a breakdown of what North Carolina prenuptial agreements can and can’t protect.
North Carolina Prenups Can:
- Protect joint property and properties owned separately by either spouse
- Protect parties from being responsible for each other’s debts and financial obligations
- Protect both parties’ estate plans
- Protect family businesses, heirlooms and assets through provisions that state the property must remain in the birth family
- Protect the acquisition of separate property
- Define what future property will be marital or separate property
North Carolina Prenups Can't:
- Include predetermined child support or child custody instructions
- Require that either party performs any action prohibited by North Carolina state laws
How Do You Negotiate a Prenuptial Agreement?
When negotiating a prenup, one of the most important things to remember is that both parties must be fair. While your prenup doesn’t have to divide everything exactly down the middle, judges have the right to throw out agreements that don’t follow regulations or appear to favor one party over another to an extent the terms are unconscionable.
Each party should show a willingness to compromise, and this can easily be achieved by simply considering each other’s needs and plans. For example, if one party has been saving for years to start their own business, they may prefer to keep these assets separate from the joint assets. Alternatively, one party may have significant debts that the other party doesn’t want to take responsibility for, so the compromise may be an addition to the agreement that clearly states the first party is solely responsible for their debt.
Here are a few more helpful negotiation tips:
- Consider potential future expenses.
- Approach the topic of a prenup at least 3-6 months before the wedding date.
- Be completely honest and transparent about each party’s assets and debts.
What Invalidates a Prenuptial Agreement in North Carolina?
Per North Carolina’s Uniform Premarital Agreement Act, unconscionability and involuntary signing of the contract are the two main factors that invalidate a prenuptial agreement in the state.
Unconscionability
Unconscionability is typically used to invalidate a prenup in North Carolina when one party is forced to sign the agreement without the ability to have it reviewed by counsel or time to consider the terms, or when the terms are so one-sided that it is unfair that only one side benefits from the agreement.
Involuntary Signing of Agreement
If either spouse believes they were forced or coerced into signing the prenuptial agreement and can prove this in court, a judge may deem the contract unenforceable. Involuntary document signing is a fairly common reason for prenuptial agreement invalidation.
Can a Prenup Prevent Alimony in North Carolina?
If a prenuptial agreement states both parties agreed to no spousal support, this may be enough to halt the alimony process. In North Carolina, parties can waive their rights to alimony in a premarital agreement.
Professional Legal Assistance With Freedom Law
For help with a prenuptial agreement or any spousal agreement, contact Freedom Law today!