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Prenups 101

May 19, 2016

 

In North Carolina, premarital agreements or prenuptial agreements are contracts that couples sign before their marriage that can determine a variety of rights and responsibilities.  The “prenup” becomes a binding contract upon the couple’s marriage.  The couple can always change the terms if they later change their minds, provided they sign the new contract with the same formality as the first one.  A couple can also enter into an agreement after marriage, called a postnuptial agreement, although this is much less common.

 

We tend to think of a prenup as something only rich people use for their second or third marriage.  In some ways that’s true, given that prenups are often used to protect family assets or heirlooms (say Bobby wants to propose using great-grandma’s engagement ring).  But that’s not the most common or even most important way a prenuptial agreement should be used. In North Carolina, premarital agreements can be useful for a wide variety of reasons.

 

A North Carolina premarital agreement can determine property rights.  In the event of a separation, property acquired after the marriage is presumed to be marital and subject to equal distribution.  A premarital agreement can specify how property and debts will be divided upon divorce or death.

 

A North Carolina premarital agreement can also determine spousal support and alimony rights.  That said, it’s important to mention that North Carolina courts retain the right to ignore a waiver of alimony in the event the result would be unjust, such as if the receiving spouse would be eligible for state or federal aid programs without support.

 

North Carolina premarital agreements can specify that one spouse will receive a larger portion of marital property in the event of marital misconduct, such as adultery.  This can be very wise if Sally is marrying John Doe, whose marriage to Jane ended because he cheated on her.

 

A premarital agreement in North Carolina can specify how bills, expenses or even household chores will be divided.  Yes, really.

 

Many prenuptial agreements also contain a sunset clause. A sunset clause is legal language that specifies when certain provisions - or even the entire agreement - will no longer be valid.  For example, a prenup could set up certain property rights and spousal support amounts that become effective as the marriage reaches specific milestones: 10, 15, 25 years etc.

 

One thing you can’t use a premarital agreement for is child custody or child support.  Some provisions can be made for children, such as inheritance rights, but custody and support cannot be determined in a prenup.

 

A few tips for making sure your premarital agreement will be upheld:

  • FULLY disclose your financial assets and liabilities before signing the premarital agreement.  It’s a good idea to attach the disclosure to the agreement itself.

  • Do not sign the premarital agreement any less than thirty (30) days before your wedding date.  Allowing as much time as possible between signing and the wedding date is advisable.

  • It’s best to hire separate attorneys to negotiate the agreement on behalf of each party, but at a minimum, have the party who did not work with the drafting lawyer review the agreement with their own lawyer.

 

Hinson Family Law routinely helps North Carolina families in Winston-Salem, Clemmons, Lewisville, and Forsyth and surrounding counties draft and execute premarital agreements.  If you have any questions or would like more information about prenuptial agreements, please contact our office at (336) 252-2933 to set up a consultation today.

 

 

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