A prenuptial agreement is a binding legal contract between a couple who intend to be married that, will set out the responsibilities and rights in the event of divorce, when one of the parties dies during the marriage or at other times as the parties may decide. It can also address responsibilities of the parties during the marriage regarding property and support. Once signed, this document will be effective when the couple marries, providing legal protection to each party.
One purpose of prenuptial agreements is to allow both spouses to protect the property that party bring into a marriage as well as assets gained during a marriage. For example, if one of them owns an asset before the marriage and sells it during the marriage, the premarital agreement can allow the original owner alone to determine how that property and its proceeds are handled. Furthermore, a prenuptial agreement may allow both spouses to protect themselves from the other’s debts — those incurred before the marriage and those incurred during the marriage. It can also determine whether support will be provided and, if so, the amount of support one of them will provide to the other if they divorce.
While many couples consider entering into a prenuptial agreement because one or both parties have considerable assets or income, such an agreement can also be beneficial to resolve issues such as documenting the separate property of each spouse, agreeing on estate plans, and addressing other specific needs and desires of either party before the marriage. Prenuptial agreements are more common than postnuptial agreements, which are similar contracts drawn up after a wedding takes place.
Couples in North Carolina may seek prenuptial agreements to cover a variety of issues, including:
- Children from a previous marriage – Premarital agreements are commonly used to protect assets for the benefit of the children of prior relationships in the event of those children’s parent’s death.
- Ownership of a business or family business – Ownership interests and property may be delineated to be under one spouse’s control for the purpose of commercial operation, sale, lease, or other management purposes.
- Significant assets to be kept separate – Certain assets (such as family heirlooms and other real or personal property) owned by a spouse may be considered separate property during and after the marriage. A premarital agreement can also limit each spouse’s ability to make claims for assets after the death of the other spouse.
- Separate debts of the parties – A spouse can be protected from liability for debts of the other spouse.
- Financial and other responsibilities during the marriage — When a marital home and other assets are purchased, how they will be titled and who will be responsible for payment can be covered in a prenuptial agreement.
- Spousal support and alimony, – Whether support will be paid and, if so, the amounts paid can be predetermined in the event separation, or divorce .
However, North Carolina law does place some limits on prenuptial agreements, such as:
- Requiring either spouse or other party to do something prohibited by law;
- Agreements may not adversely affect child support;
- Providing an incentive (financial or otherwise) for divorce.
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To be valid and enforceable, a prenuptial agreement must be in writing and willingly signed by both parties before the marriage. Because each party has separate interests, each should be represented by his or her attorney to prepare and review the agreement and underlying documents and provide counsel. The agreement may be amended or terminated if changes or termination are desired after the marriage takes place. These changes must be in writing and the writing signed by both parties to be effective.
Although the topic of a prenuptial agreement may not fall under the romantic side of planning a wedding, it can provide a valuable opportunity to have a forthright discussion with your prospective spouse regarding each other’s assets, debts, incomes and expenses; how each of you will contribute to marital and household expenses; and the thorny subject of how property would be distributed in the event of divorce or death.
If you would like to discuss whether a prenuptial or postnuptial agreement is a good approach for you, please call us to schedule a consultation. Structuring an effective and valid prenuptial agreement can be very complex due to the legal requirements and emotional components. As experienced and accomplished family law attorneys, we will explain the legal and practical implications of prenuptial and postnuptial agreements. In addition to drafting and reviewing such agreements, we can also assist you in enforcing the provisions of a prenuptial or postnuptial agreement or seeking to have an invalid prenuptial or postnuptial agreement set aside by the court.
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