A prenuptial agreement is a contract signed by two people about to get married. It serves many purposes but principally explains each spouse’s responsibilities and rights should they divorce. North Carolina law closely regulates whether these agreements are valid.
Most people imagine that prenups are needed only by the wealthy. But most people could benefit from a prenup, which can simplify a divorce. Contact our Monroe, NC family law attorneys for more information.
Simplify the Division of Marital Assets & Debts
North Carolina is an equitable distribution state. Under our laws, a couple must divide their marital property; however, each spouse can leave with their separate property. Many disputes arise in a divorce regarding this division, which you can avoid by using a prenup for the following:
- Identify what property will count as separate or marital. For example, you might want your retirement account of business property to count as separate property which does not need to be divided.
- Decide who gets what marital property. You can identify who will get the home, retirement accounts, etc.
- Set the value of certain assets. Some assets are difficult to appraise, or their value can fluctuate wildly. Agree to a value for these assets in your prenup.
- Allocate debts. For example, you might want one spouse to be responsible for the mortgage or their student loans.
North Carolina law allows judges to order alimony. Typically, the wealthier spouse makes monthly payments to his or her ex for a set amount of time. Our clients can use a prenuptial agreement to decide the following:
- Waive a right to alimony
- Identify the amount and duration of alimony
Some couples set an amount of alimony based on the number of years married, while others will use a different formula.
Protect Your Business
Under North Carolina’s equitable distribution law, your spouse could gain equity in the business on divorce. This might be shocking. However, the law is clear. Any asset obtained while married is presumed to be marital—and this includes business assets.
On divorce, your ex could be given a share of your small business, making it impossible to work effectively. You will need to buy them out of their share, but you might lack the funds. Use a prenuptial agreement to protect your business in divorce court.
Protect Children from a Previous Relationship
A prenuptial agreement can help even if you never divorce. For example, you might have children from a previous marriage who you want to leave your estate to. In North Carolina, however, a surviving spouse has a right to an “elective share” of your estate, even if you try to disinherit them in your will. Under N.C. Gen. Stat. § 30-3.1, the share depends on the duration of the marriage but can reach 50% of the estate.
Fortunately, spouses can voluntarily waive their elective share in a valid prenuptial agreement. This document is an important part of an estate plan.
Draft a Prenuptial Agreement the Right Way
All agreements must follow certain formalities, such as being in writing. They also cannot be procured by fraud, duress, or coercion.
To property draft, a prenuptial agreement, contact a lawyer at Perry, Bundy, Plyler, & Long, LLP. We can help you make the required full disclosure of financial information so that your agreement will hold up if challenged in court. Contact us today to schedule a confidential consultation.