A premarital agreement is created before a marriage to protect spouses in the event of a divorce. It can also add the transparency that might help them avoid the mistrust and disagreements that can crop up during the marriage that may lead the couple to divorce.
Most people do not get married expecting that the marriage will end. However, statistics do not bear this out. According to World Population Review, approximately 50 percent of all married American couples divorce, the sixth-highest divorce rate in the world.
What is a premarital agreement?
A premarital agreement (also known as a prenuptial agreement) is a contract made by a couple that is used to define the rules that will dictate how their property, debts, income, and expenses will be distributed should they divorce. Premarital agreements should protect both spouses, as well as the separate property they bring into a marriage. They also allow both parties to protect themselves from becoming liable for the other party’s debts that were incurred before and during the marriage. Premarital agreements may also allow the spouses to determine what level of support one might provide to the other if they divorce or one of them dies.
How do I know if I need a premarital agreement?
Although many couples do not consider entering into a premarital agreement unless one or both have substantial assets or income, such an agreement can benefit both parties, no matter how much income or assets they possess. Couples enter into premarital agreements for various reasons. Some of the most common ones include addressing concerns regarding finances, child support, and to ensure that an estate plan is honored.
Some other valid reasons that couples seek premarital agreements include:
- They have children from a previous marriage.
- One or both spouses own their own business or are involved in a family business.
- One or both spouses have significant assets that they want to keep separate.
- One spouse has concerns about the amount of debt the other party has.
- One spouse is giving up a successful career to get married.
Since a premarital agreement outlines the separate property of each spouse, it can be structured to fit their unique needs and wishes, as well as resolve differences over finances and estate planning that might later become an issue.
What a premarital agreement can (and cannot) do
North Carolina law controls what assets that premarital agreements can safeguard. Here are some things that prenuptial agreements can do:
- Differentiate between property that is owned jointly by both spouses and property that each hold individually.
- Shield one spouse from the other’s debts.
- Provide for the needs of children of either spouse from a prior relationship.
- Ensure that family heirlooms and business interests be kept within the birth family.
- Enhance and protect an estate plan.
- Simplify the fair distribution of property in the event of a divorce.
- Designate which spouse is responsible for which financial tasks during the marriage, e.g., managing a separate business.
There are also things that a Charlotte prenuptial agreement cannot do, such as:
- Compel either spouse to perform an illegal act.
- Pre-arrange for child custody or child support.
- Relinquish either spouse’s right to receive alimony should the couple divorce.
- Offer a financial or other type of incentive for divorce.
- Determine which spouse is responsible for certain personal or household matters, e.g., who will perform which household duties or care for the children.
Premarital agreements can be used to protect the unique needs and responsibilities of the spouses. However, couples are not free to include anything they want. Some disputes that might arise during the creation of a premarital agreement include:
- Necessity. The pros and cons of a premarital agreement, and whether one is needed at all.
- Terms. When couples disagree about what to include in a prenuptial agreement, their attorneys can often step in to help resolve the issues.
- Duration. Couples need to decide if the agreement will remain in effect indefinitely, or whether a “sunset clause” should be included. Sunset clauses allow the premarital agreement to expire at a certain point in the marriage.
- Motivation. If one of the spouses feels pressured to sign the agreement, it might be better to wait.
- Validity. If the agreement, or a certain provision, is invalid or considered unconscionable, a court will likely not enforce it, even if both spouses willingly agreed to its terms.
- Transparency. A premarital agreement must be based on true information, and complete transparency is necessary.
If circumstances change, an existing premarital agreement can be revoked or amended by a written agreement signed by both spouses.
Requirements for your Charlotte premarital agreement
There are certain elements that must be included in your premarital agreement for it to be valid. These include:
- The agreement must be in writing and signed before the marriage.
- It must be fair, reasonable, and both parties must fully disclose all their individual assets and liabilities.
- Each party to the agreement must have their own attorney to prepare and review the document to avoid a conflict of interest.
Because a prenuptial agreement will be considered void if it doesn’t contain all the necessary elements or contains something it shouldn’t, those who want to enter into one should consult with a qualified Charlotte premarital agreement attorney to help ensure that the contract will hold up in court.
The experienced attorneys at Epperson Law Group, PLLC have decades of experience with family law, including drafting valid premarital agreements. If you and your spouse are considering creating a prenuptial agreement but have questions on what it should include or don’t know where to begin, we can help.
Contact our firm either by completing our contact form or by calling 704-321-0031 to schedule an initial consultation at one of our offices in Charlotte, Weddington, Boone, or Concord today. We are also available for Zoom consultations and are bilingual – feel free to contact us in English or French. We look forward to hearing from you.