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.

Many times when clients agree on prenuptial agreements they will also include a sunset clause.  A sunset clause decides on a date that the prenuptial agreement will expire. There are two primary types of sunset clauses.

1. The first type of sunset clause will invalidate the prenup after a certain amount of time has passed in the marriage.
2. The second type phases out the terms over time.

If you’re interested in a prenuptial agreement and a sunset clause, contact us at Dummit Fradin and let us help you.

The High-Stakes Gamble of a DIY Prenuptial Agreement

[00:00:00] In an age where online templates and do-it-yourself legal forms are abundant, it’s tempting to believe you can handle any legal document on your own, including a prenuptial agreement. The question “Can I write my own prenup?” is a common one, often driven by a desire to save on legal fees. However, as this video explains, a prenuptial agreement is far more than a simple form; it’s a sophisticated and powerful legal contract that dictates your financial rights in the event of a divorce. Attempting to draft one without expert legal guidance is a significant gamble with potentially devastating consequences down the road.

Why a Prenup is a Specialized Legal Contract

[00:00:05] The video’s central argument is that a prenuptial agreement is a complex, legally binding contract that requires a deep understanding of specific legal principles to be valid. Unlike a simple sales agreement, a prenup must stand up to intense scrutiny in a family court, often years or even decades after it was signed. If it’s not drafted and executed perfectly, it can be rendered completely unenforceable.

[00:00:25] At its core, a prenup is governed by the principles of contract law. This means that for it to be valid, there must be a clear agreement, full disclosure of all assets and debts, and it must be signed voluntarily by both parties. The language used within the document is absolutely critical. [00:00:30] Courts are tasked with interpreting the exact intent of the parties at the time the agreement was signed, and they do so primarily by analyzing the specific words on the page. Ambiguous phrasing, vague terms, or poorly defined clauses can lead to a judge reinterpreting your agreement in a way you never intended, or worse, invalidating the entire contract.

The Critical Risks of an Improperly Drafted Prenup

[00:00:10] The consequences of getting it wrong are severe. If your marriage dissolves and your DIY prenup is challenged in court, you might discover that the protections you thought you had do not exist. A judge could throw out the agreement for a number of reasons that a layperson would likely overlook:

• Lack of Full Financial Disclosure: Both parties must provide a complete and honest accounting of their finances. Hiding assets or downplaying debts can be grounds for invalidating the agreement.
• Coercion or Duress: A prenup must be signed voluntarily. If one party can prove they were pressured, threatened, or not given enough time to review the document and seek legal advice, the contract can be voided. Presenting a prenup the night before the wedding is a classic example of this.
• Unconscionable Terms: The terms of the agreement cannot be grossly unfair or leave one spouse destitute while the other retains immense wealth. While you can certainly create an agreement that isn’t a 50/50 split, courts will not enforce terms that are considered predatory or overly one-sided.

[00:00:19] This is where the value of a legal professional becomes clear. An attorney’s job is not just to write the document, but to oversee the process and ensure it’s done in a way that is procedurally sound and will be upheld by a court.

The Essential Role of Independent Legal Counsel

[00:00:43] The video strongly emphasizes that both parties should have their own, separate attorneys. This is perhaps the single most important step you can take to ensure your prenuptial agreement is enforceable.

[00:00:48] When each party has their own lawyer, it demonstrates to the court that the agreement was entered into with full knowledge and understanding. It prevents one party from later claiming they didn’t know what they were signing or were taken advantage of. [00:00:59] This is especially crucial for the party who may be waiving significant rights to assets or spousal support. Their attorney’s role is to ensure they fully comprehend the rights they are giving up and that the agreement is fair under the circumstances.

[00:01:07] Furthermore, an experienced family law attorney can offer creative solutions and compromises that DIY templates cannot. The video mentions the “sunset clause” as one such example. A sunset clause is a provision that states the prenuptial agreement will expire after a certain number of years of marriage. This can be a wonderful compromise for a couple who wants protection early in a marriage but agrees that after a long period of partnership, their assets should be considered fully shared.

Conclusion: An Investment in Your Future

[00:01:19] In conclusion, while the idea of writing your own prenup might seem like a practical way to save money, it is a perilous shortcut. The intersection of contract law and family law is incredibly nuanced, and the financial stakes are simply too high to leave to chance. Hiring a knowledgeable attorney is not just about drafting a document; it’s about receiving strategic advice, ensuring a fair and transparent process, and creating a legally sound contract that provides true peace of mind. [00:01:29] Making this investment ensures that the agreement you create today will be the agreement that protects you in the future.

Dummit Fradin Attorneys in Winston-Salem can assist in discussing prenuptial agreement needs.

A Family Law Attorney addresses defenses to a prenuptial agreement and what can invalidate one. In general, a prenuptial agreement is enforceable as long as the parties under the prenup are free from fraud, duress, and undue influence.

• Prenuptial Agreement Must Be Fair and Reasonable

Two of the most common defenses for a prenup are fraud and duress. The most common way to win on a defense of fraud is to show that one spouse did not fully disclose their assets.

• Prenuptial Agreement Can Not Be Executed While One Party Is Under Duress

If a prenup is executed while one party is under duress, it can be set aside.  Duress exists when one party causes the other to do something they would not have done otherwise.  There are several factors to consider when determining if someone was under duress.

1. Age
2. Mental Condition
3. Physical Condition
4. Threat of Physical Violence or Force

If you are concerned about your prenuptial agreement contact us and we’ll see if it is valid and enforceable.

A respected Family Law Attorney briefly explains what a prenuptial (prenups)agreement and a postnuptial (postnups) agreement are.

Prenuptial Agreement

A prenuptial agreement, also known as a premarital agreement, is a legally binding contract between two individuals before their marriage.

Postnuptial Agreement

A postnuptial agreement is a contract that is entered into during the marriage.

There are two types of postnuptial agreements.

1. Entered into by spouses while married before they have separated but they are not thinking about separating or divorcing.
2. Entered into by spouses during the separation in preparation for a divorce. It is commonly referred to as a “separation agreement.”

If you find yourself wondering if you need a prenuptial or postnuptial agreement contact us and we can help you understand the legal aspects of each.