Do I Need A Prenuptial Agreement?

You may have asked this question and decided against it, noting that you’re neither rich nor famous. Prenuptial agreements (or “prenups” as they are commonly called) can protect any assets you bring to a marriage or protect you from your spouse’s debts in the event of marital dissolution. In short, a prenuptial agreement can be a prudent and completely reasonable step to take for anyone bringing assets into a marriage. North Carolina law recognizes that premarital assets are to remain the separate property of each spouse. Regarding such assets, a premarital agreement adds an extra layer of protection to ensure that assets contributed to the marriage are clearly identified and allocated to the contributing spouse in the event of a later separation or divorce.

Historians believe prenuptial agreements have been around since ancient Egypt, so they are nothing new. While discussing a “prenup” may be less than ideally romantic, the benefits are most often significant for both parties involved. You can stipulate how your property can be passed on to children from a previous marriage or if either party will receive alimony in the event of divorce. However, a prenuptial agreement has its limitations. It cannot determine future child custody rights or child support, for example.

In the event you are considering a prenuptial agreement, here are a few steps you can take to ensure a positive outcome:

Discuss it as early as possible with your partner

It’s important to let your partner know that you are interested in the management of your marital finances and debts, even if you’re still not sure you want a prenuptial agreement. If you haven’t already discussed money, a “prenup” will start the conversation. Financial matters are a common reason for many divorces; a discussion about finances is healthy and in the interest of both you and your soon-to-be spouse.

Decide whether you need or want a prenuptial agreement

If you and your partner have decided that a prenuptial agreement is in order, research the laws in your State. In North Carolina, prenuptial agreements are governed by Chapter 52B of the North Carolina General Statutes, entitled “Uniform Premarital Agreement Act.” Section 52B-7 generally addresses enforcement and challenges to premarital agreements. There is also a body of North Carolina case law that instructs how such agreements will be recognized and enforced in North Carolina.

The terms of a well-drafted premarital agreement will be recognized and fully enforced in the vast majority of cases. However, it is important to note that in North Carolina, a prenuptial agreement can be contested and could be successfully challenged if: a) one party did not adequately disclose his/her assets and/or debts brought into the marriage; and b) there is no reasonable way the contesting party could have had prior knowledge of the undisclosed property or assets. Another circumstance that could render a prenuptial contract void is if the document was executed involuntarily and under pressure of duress. For this reason, it is best practice to give full and fair disclosure of the assets and debts well in advance of the wedding date.

The Bottom line: if you decide that a prenuptial agreement is desirable, be truthful in your disclosure of assets and do not wait until that “last minute” (last weeks before the wedding).

Make sure you and your partner are on the same page

Do this before contacting your attorneys. That’s attorneys PLURAL. While one attorney can draft the proposed agreement, this attorney is not permitted to explain and advise both persons; the attorney can only represent the husband or wife, not both. Even if one party hires an attorney to draft the proposed agreement, this attorney is only permitted to advise the party that hired the attorney. It is not ethically permissible for a North Carolina family law attorney to advise both parties to a premarital agreement, due to the potential conflict of interest. The most efficient process is for both parties to establish general agreement on the essential terms. One spouse can then hire an attorney to draft the premarital agreement, while the other spouse seeks the advice of his or her own attorney to review the proposed document, if he or she has questions about the terms.

Have an attorney present when the document is signed

For a prenuptial agreement to be valid it must be in writing, be signed before a notary, and be substantively conscionable, in addition to the stipulations stated earlier. Four (4) copies should be signed and notarized, one (1) for each attorney and one (1) or each spouse.

If you’re honest and forthright with your partner throughout the entire prenuptial agreement process, your life with your partner will likely begin with a greater understanding and on firmer ground than otherwise. A prenuptial agreement is a sound and prudent way to begin any marital partnership.

Do I Need a Prenup?

If you’ve asked yourself this question, the attorneys at Montgomery Family Law are well-versed in this personal and sometimes complex issue and invite you to contact us at (919) 348-2317 to schedule an initial consultation.