North Carolina Prenuptial Agreements: What Can (and Cannot) Be Covered?

A prenuptial agreement or premarital agreement (sometimes called a “prenup”) is a contract entered into by prospective spouses before marriage that addresses rights and obligations of the spouses after marriage. In North Carolina, prenuptial agreements are subject to the provisions of a specific state law.

North Carolina Uniform Premarital Agreement Act

A statute named the Uniform Premarital Agreement Act governs prenuptial agreements in North Carolina. The law includes provisions covering execution, effectiveness, contents, and enforcement. If an agreement does not satisfy the requirements of the law, it may be void and unenforceable.

Legal Formalities and Effectiveness

A prenuptial agreement must be in writing and signed by both prospective spouses prior to marriage. The terms become effective following the marriage. After a prenuptial agreement goes into effect, the two spouses may amend or revoke the terms only by a written agreement signed by both spouses.

Contents — What Can and Cannot Be Covered?

The law specifies that the contract may include provisions relating to:

• Property rights and duties
• Property management and control
• Spousal support
• Estate planning actions to carry out the terms of the agreement
• Ownership and disposition of death benefits from life insurance policies
• Law governing the agreement
• Any other matter that does not violate public policy or criminal laws

The statute specifically states that a prenuptial agreement cannot adversely affect a child’s right to support.

With regard to spousal support, the law provides a limitation. If provisions in the agreement would cause a spouse to be eligible for public assistance on separation or dissolution of the marriage, a court may require the other spouse to provide support to the extent necessary to avoid eligibility.

Enforceability

The Uniform Act sets forth two reasons that a prenuptial agreement may be unenforceable:

• A prospective spouse did not sign the document voluntarily, or
• The agreement was “unconscionable when it was executed,” subject to demonstration of specific requirements.

The issue of unconscionability is a matter of law determined by the court. The statute provides that the spouse claiming that an agreement is unconscionable must show that:

• The other spouse did not provide a “full and fair disclosure” of assets, property, or financial obligations;
• The claiming spouse “did not voluntarily and expressly, in writing” give up the right to full disclosure beyond the disclosure provided by the other spouse; and
• The claiming spouse did not have adequate knowledge of the assets, property, and financial obligations of the other spouse, or reasonably could not have had that knowledge.

Should You Consider a Prenuptial Agreement?

Premarital agreements enable spouses to protect separate property owned prior to the marriage. The agreement establishes terms for dividing property and financial obligations in the event of death or the end of the marriage.

Many people think that a couple should consider a prenuptial agreement only if a prospective spouse owns considerable property or has significant income. While premarital agreements often do address that situation, there are other circumstances when a premarital agreement may make sense, including times when one or both spouses have:

• An ownership interest in a business, including a family business
• Children from a prior marriage
• Significant debts or financial obligations

A premarital agreement may also be appropriate if a prospective spouse plans to relinquish a successful profession or career after the marriage.

An agreement prior to marriage can benefit both spouses and resolve issues that may cause problems in a marriage if not addressed beforehand. A prenuptial agreement also necessitates transparency about property and debts before the marriage, since a court could declare the agreement void in the absence of full disclosure.

Prenuptial agreements are not the right choice for everyone. Each couple needs to decide whether a prenuptial agreement is the right choice for them and their circumstances. If you have questions about premarital agreements, the best first step to take is consulting with an attorney experienced in writing and counseling clients about prenuptial agreements.

Do You Need an Attorney for a North Carolina Prenuptial Agreement?

In theory, you could write your own prenuptial agreement — or, you could use a form from a Do-It-Yourself (DIY) service. As with any legal document, if you take either of those approaches, you run substantial risks that your agreement or some of its provisions may not be enforceable under North Carolina law.

One important point regarding prenuptial agreements: If a couple considers creating a premarital agreement, each prospective spouse should consult with his or her own attorney. Each person has different and separate interests to protect. It is not appropriate (and may even be unethical) for an attorney to advise both prospective spouses about a premarital agreement.

Talk With An Experienced North Carolina Prenuptial Agreements Attorney

Our domestic and family law attorneys at the Twiford Law Firm are here to help with matters relating to North Carolina premarital agreements, as well as the full range of family law matters. With offices in Elizabeth City and Moyock, we serve clients throughout northeastern North Carolina, including the Outer Banks. Contact us today at 252-338-4151 or 252-435-2811 to schedule an initial consultation.