Premarital Agreements (also called prenuptial agreements or “prenups”) are a common legal step taken before marriage. A prenup establishes the property and financial rights of each spouse in the event of a divorce. So while no one is thinking about a divorce when they get married, about one half of all marriages in America end up in divorce proceedings. So it’s often prudent to at least consider a prenuptial agreement. Prenups are often used to protect the assets of wealthy spouses but also can protect family businesses and serve other important functions. Learn about your legal requirements for a prenuptial agreement and whether it’s right for you from a qualified attorney at Turner Law Firm, PLLC.
Why Use a Prenuptial Agreement?
There are several reasons why one party (or even both parties) may want to sign a valid prenuptial agreement prior to getting married. Generally, prenups protect assets that may otherwise be subject to marital property laws. Specifically, these documents may be used to:
- Protect one party from taking on the debts of the other.
- Protect specified assets of one party.
- Determine the manner in which property is passed on after death.
- Simplify property division in the event of divorce.
- Clarify financial responsibilities of the parties.
The Pros and Cons of a Prenuptial Agreement
Entering into a prenuptial agreement should never be taken lightly, particularly since the very mention of a prenup suggests the possibility that the marriage may end at some point. Discussion of a prenuptial agreement also can create stress in a relationship. Therefore, deciding whether to implement certain financial conditions and designations of separate property while also planning nuptials is a personal decision. It helps to understand the pros and cons of signing such an agreement.
Pros
- Support your estate plan without future court involvement.
- Make certain financial agreements with your spouse official.
- Protect the family business and its assets.
- Fewer property conflicts during a divorce.
- Avoid shared debt liability.
Cons
- Can create distrust and dull the relationship.
- Certain elements of the prenup may already be addressed by state law.
- Cannot address child support or child custody issues in a prenup.
- A judge may rule parts of the prenup unenforceable, depending on the relevant facts in the case.
- Non-monetary matters, such as chores and tasks, cannot be addressed in a prenup.
What Makes a Prenuptial Agreement Invalid?
A prenuptial agreement may be considered invalid under a number of different conditions and scenarios. First of all, a prenup must be written and signed by both parties and properly executed. Beyond that, a prenup that was signed under duress or not even read prior to signing (as part of a package of documents requesting signatures, for instance), then it may not be considered valid. Other reasons a state may not recognize a prenuptial agreement include lack of independent counsel (for each spouse), false information and unconscionability.
North Carolina sets forth what may be addressed in a Prenuptial Agreement: NCGS §52B-4 (Content)