What a Prenuptial Agreement Can (and Cannot) Cover in North Carolina
What a Prenuptial Agreement Can (and Cannot) Cover in North Carolina
[00:00:00] Before entering into a marriage, many individuals and couples seek to protect their assets and clarify their financial futures. A prenuptial agreement is a powerful legal tool designed for this purpose, but its scope is not unlimited. Understanding what can and cannot be included in this document is essential for creating a valid and enforceable contract. As this video explains, a well-drafted prenup, developed with guidance from experienced North Carolina family law attorneys, can provide significant peace of mind. Still, it must adhere to the specific rules and public policies of the state.
What is a Prenuptial Agreement?
[00:00:18] At its core, a prenuptial agreement (or “prenup”) is a formal, written contract executed by two people before they get married. [00:00:22] For the agreement to be legally valid in North Carolina, it must be in writing and signed by both future spouses before the wedding. [00:00:28] The primary purpose of this agreement is to pre-determine how certain financial matters will be handled in the event of a divorce, separation, or the death of one spouse. It allows a couple to create their own rules for property division and support, overriding the default laws that would otherwise apply.
What a Prenuptial Agreement CAN Cover
The laws governing prenuptial agreements, specifically the North Carolina Uniform Premarital Agreement Act, grant couples broad authority to contract on several key issues.
1. Division of Property
[00:00:31] This is the most common reason people seek a prenuptial agreement. The contract can define what constitutes separate property (belonging to one spouse) versus marital property (belonging to the couple). [00:00:48] This includes a wide range of assets, such as real estate, bank accounts, business interests, professional licenses, and even future retirement benefits like pensions and 401(k)s. [00:01:00] By clearly defining property rights beforehand, couples can avoid costly and contentious disputes over equitable distribution if the marriage ends.
2. Inheritance Rights and Estate Planning
[00:01:06] A prenup can be used to waive or alter inheritance rights. For example, in a second marriage where both spouses have children from previous relationships, they may use a prenup to ensure their individual assets pass directly to their own children rather than to the surviving spouse. This allows for precise and intentional estate planning that respects pre-existing family structures.
3. Spousal Support (Alimony)
[00:01:13] Couples can decide in advance whether one party will pay spousal support (also known as alimony or post-separation support) to the other in the event of a divorce. They can agree to waive it entirely, set a specific amount or duration, or establish certain conditions under which it would be paid. [00:01:21] However, there is a critical exception: if waiving spousal support would leave one spouse so financially destitute that they would become eligible for public assistance (like welfare), a court has the authority to override that provision and order support to be paid.
What a Prenuptial Agreement CANNOT Cover
While a prenup has a broad scope for financial matters, North Carolina law expressly prohibits it from dictating specific issues, primarily those related to children.
1. Child Custody and Child Support
[00:00:36] This is the most critical limitation. A prenuptial agreement cannot pre-determine child custody or waive or limit child support obligations. [00:01:36] The right to financial support belongs to the child, not the parents, and parents cannot legally contract this right away. [00:00:43] Similarly, child custody decisions must be made based on the “best interest of the child” at the time of the parents’ separation. A court will always retain the final authority to decide on custody arrangements, as a child’s needs and circumstances can change dramatically over time. Any clauses in a prenup attempting to control custody or support will be deemed unenforceable.
2. Spousal Support During the Marriage
[00:01:30] While a prenup can address support *after* a separation, it cannot waive the legal duty of spouses to support one another *during* the marriage. This is a matter of public policy designed to ensure financial stability within the marital unit.
[00:01:51] In summary, a prenuptial agreement is an invaluable tool for financial planning and asset protection. By working with a knowledgeable attorney, you can create a customized agreement that provides clarity and security, ensuring it is both comprehensive in its coverage and compliant with the law’s limitations.