What’s a Prenup?
A prenuptial agreement is a legally binding contract that is entered into before a couple gets married. Simply put, it’s a way for two people to tap the brakes on a relationship that seems headed toward the altar, allowing them to discuss in a more reasonable manner what is going to happen in the event of a divorce.
A prenuptial agreement is not meant to be an axe hovering over your relationship. While these documents were once only signed by wealthy couples, today they are becoming more common. They can be used by high- and low-income families alike as ways to encourage honest financial conversations between the two parties.
Some people view them as bad omens, suggesting that a marriage isn’t really going to work out. Ultimately, prenuptial agreements are meant to ensure that neither party is entering into a marriage without full knowledge of what they can gain or lose if the union ends.
They can be a way of protecting spousal support rights in the event of divorce. For example, you may have a long-term disability . The agreement, if valid, can entitle you to spousal support even if the divorce was premised on you being responsible for a large portion of your spouse’s medical expenses. Your spouse would still be on the hook to pay you the support even though it wasn’t necessarily his or her fault you are disabled.
You may also want to guard against alimony awards. It’s quite possible for you to have little or no income, but nonetheless, courts will allow for alimony awards to someone who can support them while they recover from the marriage.
A prenuptial agreement would protect you from this outcome, assuming that the agreement was properly drafted. If this is something you feel you would like to do in the marriage, having an attorney review your agreement can help you understand how it works.
Prenuptial agreements can protect your inheritance and gifts. It’s important that you know what property you want to keep and how that property could be used to support your lifestyle if your relationship ends.
Requirements under North Carolina Law
North Carolina prenuptial agreement templates, like the NC prenup itself, are required to conform to a number of requirements. Any prenuptial you sign in North Carolina would do well to comply with requirements similar to those set out below, to ensure it will be enforceable in the event of a divorce.
The requisite formalities are based on N.C.G.S. § 52-10.1. It states that if certain conditions are satisfied, "[a]ll the provisions of a premarital agreement as provided for in this Article shall be enforceable."
These requirements are in line with most other states. In North Carolina, a prenuptial must:
This basically means that both parties to the agreement should have access to independent legal counsel before consenting to sign the agreement.
The agreement between the parties should therefore contain a waiver of this right to free counsel, or if there was no such counsel available (and a failure to comply with this requirement could cause a court to rule an agreement unenforceable), the document must provide an explanation.
Further, in accordance with North Carolina law, this waiver should include a specific paragraph within the agreement discussing that this right is being waived.
In North Carolina, if a spousal contract involves real property, then it’s required by law to be notarized by one of the parties on both the affidavit and husband’s signature. This may be something that an electronic notary can do when a client signs a prenuptial agreement in this manner.
If either spouse hasn’t read the agreement, or is unaware of any legal or non-legal obligations that would exist between them without a prenuptial, and if he’s not represented and has insisted on signing, the agreement may be deemed unenforceable in court.
Under N.C.G.S. § 52-10.3, if the execution of the contract involves fraud or overreaching, and threatens to reduce the victim to poverty, it may be deemed unenforceable.
Essential Elements of a Prenup
The essential elements of a prenuptial agreement template generally include a statement of the assets and liabilities owned by each person prior to marriage, the rights and obligations of the not-yet-married couple in the event of their divorce, and any other money matters they want to agree upon before tying the knot.
The first element, an enumeration of assets, is often contemplated in the sections on property division and alimony. Statements about how credit and debt will be managed should also be included. The second element relates to general guidelines for dividing joint property and premarital property in the event of a divorce. Last but not least is the division of debt and financial obligations.
Although you can create your own version of a prenuptial agreement template, we always recommend that you work with a qualified North Carolina divorce attorney who can ensure that your final agreement will pass muster with the court in the event it is ever needed.
The Benefits of a Template
The advantages of using a prenuptial agreement template are cost savings, time savings, and the assurance that important issues are covered. Creating your own template can be very time consuming. A locally tailored template takes away the time and effort of preparing your own template from scratch. As virtually every issue is covered by a prenuptial agreement, the chance that you miss a disclosure requirement, important provision or important explanation is significantly higher with a locally tailored template than with a locally tailored prenuptial agreement. If you purchase a prenuptial agreement template online, you may not be aware of the hundreds of issues a North Carolina prenuptial agreement can cover. You will have to do the work of creating disclosures and provisions from scratch. In addition, your prenuptial agreement template might not make sense for residents of NC. Most importantly, businesses that provide prenuptial agreement templates do not cover disclosures that would be required for a prenuptial agreement to be enforceable in North Carolina.
How to Personalize Your Agreement
Just like a person’s life is unique, so are their financial circumstances and their approach to marital assets. A NC prenuptial agreement template can be a good basic guide, and will ensure that the person utilizes the most up to date, legally binding agreements.
However, it is still critical to sit down with your partner and determine what is important to you both financially, and adjust your NC prenuptial agreement template accordingly. It is also beneficial to meet with a family law attorney in your area to ensure that your prenup contains the language needed to protect you in the state in which you reside .
For example, some factors that can be included in a prenup adjustment to an NC prenuptial agreement template include:
If you desire, you should also schedule a meeting with an attorney after your prenuptial agreement template has been customized to add other details or points of view you may not have considered through the process of drafting it. Again, while your premarital agreement may be sound, and done through a readable agreement template, a local lawyer may have experience you lack to help you in getting the prenup you need to protect your assets.
Pitfalls to Watch For
Common Mistakes to Avoid When Including NC Prenuptial Agreement Templates in Their Property Settlement Contract
People often make one of the three mistakes when preparing their property settlement contract for divorce. First, parties mistakenly think they do not need a lawyer because the contract is a form contract. Second, individuals think that all the contract principles apply when determining whether the contract is valid and enforceable. Third, people think their contract is valid and enforceable once it is drafted even if not properly executed. In fact, the only pre-nuptial agreement template in North Carolina that courts can enforce is a postnuptial contract for a limited property issue. Any other pre-nuptial agreement template in North Carolina that has a provision on alimony, property or child custody and support is unenforable (with important exceptions below). Because courts will not enforce agreements on alimony and child custody and support, parties can get into trouble if they are not careful. Here are the common mistakes: 1. Parties incorrectly believe they do not need a NC lawyer. Prenuptial agreements are generally contracts requiring full and fair disclosure, informed consent, and the ability to enter into a contract uninfluenced by fraud, duress or undue influence. The law presumes individuals represented by a lawyer have protected their rights. Without an attorney, the individual must prove the absence of overreaching and that he or she entered into the agreement freely, fairly, knowingly and intelligently. If one party is represented by a lawyer and the other is not, the court will presume the agreement was entered into fairly. 2. Parties incorrectly believe that contract principles (as opposed to contract restrictions) apply when determining whether the agreement is valid and enforceable. Many parties mistakenly believe that full and fair disclosure of assets and liabilities are required in a prenuptial agreement. The four contract principles are: 1) the agreement must be fair; 2) parties must enter into the agreement voluntarily; 3) the agreement must be supported by adequate consideration; and 4) the agreement must be uncodified. 3. Parties do not know that prenuptial agreements are meant to control property division at death. Unfortunately for many people, their postnuptial contract will not protect them from a surviving spouse. This is because spouses typically have a right to own separate property, marital property, and divisible property upon death. A postnuptial agreement will be enforced against a surviving spouse unless: 1) the agreement was invalid; or 2) the agreement was ferret out by the surviving spouse and the deceased spouse’s children in a will in violation of N.C.G.S. § 31-11.7. 4. Parties do not know that prenuptial agreements are meant to control property division at divorce. Prenuptial agreements will not control the distribution of property in a divorce unless: 1) the prenup contains artful language authorizing its enforcement at divorce; and 2) the prenup is not violative of public policy, and the judge determines that the contract is valid and enforceable. 5. Parties do not know that prenuptial agreements are meant to control child custody and support at divorce. Child custody and support provisions are unenforceable in North Carolina. Parents have a paramount duty to provide for their children, and the best interest of the children controls. Thus, if parents waive child support in a prenup and they can later show that the waiver harms the children, the agreement is invalid. If parents have a dispute over custody, a judge can override their agreement after considering the best interests of the children.
NC Prenup FAQs
What property can be protected with a prenuptial agreement? All property belonging to you or your fiancé/fiancée before the marriage can be protected. You may also protect any property acquired by either of you after the marriage begins, but there are some limitations on such property set out below.
Can we protect my future earnings or future career? Future earnings can be protected. If the future earnings are deferred or paid into a savings account or pension fund, then the protection is easier.
Will the prenuptial agreement affect my rights to Social Security? No.
I have children by a prior marriage. How will the prenup affect their rights to my property? If the prenup provides that your property is to go only to your heirs, this will avoid giving any rights to your present spouse and will avoid any arguments with children of a prior marriage about your current spouse getting some of your property.
Should our child have a custody action in North Carolina, how would the prenup affect her visitation rights? As a general rule, a judge could overlook a prenup in making a decision about custody and visitation. The judge must decide what is in the child’s best interest.
Will my spouse have to pay my debts if I die? This is one of the major areas where a prenup can help . There are some limitations on the protection, but generally one spouse avoids personal liability for the other spouse’s debts.
Is a prenup effective to avoid a spouse getting any property at all? Yes, if it states that the spouse is taking nothing and has received full disclosure of assets and debts. Consider the legal risks and practical risks of such an arrangement.
If my spouse does receive some property, can the prenup fix how much under the law? Yes. You may wish to specifically mention particular property or a specific amount that a spouse will get if there is a divorce.
Is a prenup okay if we intend to live in another state after the marriage? Yes, provided the marriage takes place in North Carolina.
If I am a U S citizen will the prenup be valid if my spouse is a non citizen? Yes.
Will this affect my ability to get alimony? It should not. Under the law, you may waive your right to alimony. If the waiver is clear and unequivocal you will get no alimony. The agreement must be voluntary and the terms must be disclosed.
Is it true that a spouse can waive a right to an elective share? Yes, provided the amount of the elective share is less than one-third of the value of the estate.
How is a prenup different from a marriage agreement? A prenup is effective before the marriage. A marriage agreement is effective after the marriage.