Premarital Agreement - What it Can and Cannot Do for You
As North Carolina Family Law Attorneys, we often help Clients with negotiating, drafting, and executing Premarital Agreements, commonly referred to as a “Pre-nup”. Most are probably familiar with the concept of a Premarital Agreement, which is a contract entered between two people before marriage that can include predetermined outcomes on how the parties’ assets and debts are distributed and what spousal support, if any, be paid in the event the marriage ultimately ends in divorce. The content of any given Premarital Agreement varies, sometimes drastically, depending on a couple’s specific situation and some Premarital Agreements are limited to a single issue while others are expansive, controlling many issues that may result from the parties’ marriage and potential separation.
North Carolina law is clear on what issues can and cannot be contracted for in a Premarital Agreement. Equitable Distribution, the division of all marital assets and debts, can be included in a Premarital Agreement. These provisions allow soon-to-be married parties to determine how their property, either presently owned or acquired in the future during their marriage, will be owned, managed, and potentially later distributed in the event of separation. Alimony, or spousal support as it is commonly known, may also be included in a North Carolina Premarital Agreement. Parties can specify a specific dollar amount and duration of spousal support to be paid or they can waive either party’s ability to file a claim for spousal support, in the event of divorce. Together, terms on these two issues can largely control the financial outcome resulting from a couple’s separation and divorce.
Other rights arising out of marriage that can be determined in a Premarital Agreement include a spouse’s right to receive in the event of death. For example, a surviving spouse can waive any right to recover from the deceased spouse’s estate or, in the alternative, the Premarital Agreement can specifically require each spouse to identify the other on certain issues in his or her Last Will and Testament.
There are some issues which cannot be included in a Premarital Agreement under North Carolina law, most of which are considered against public policy. Parties may not waive child support in a Premarital Agreement, even if the would-be parents agree that child support should not be paid to one another. This prohibition is grounded in the public policy rationale that a child’s right to support from each parent is absolute and, if parents were able to agree in advance to waive child support, there is a risk that a child may be financially harmed. Although not specifically set forth in statute, there is a general presumption that a Premarital Agreement cannot bind the parties on the issue of child custody. The State may act in loco parentis, in place of a parent, to decide the best interests of a child or children and the North Carolina Courts will always have jurisdiction (assuming personal jurisdiction requirements are met) to make a determination as to the proper custody arrangement for a child or children.
If you have questions about a Premarital Agreement, please contact us today at: (704) 810-1400.