Planning for your “Future” Former Spouse: The North Carolina Premarital Agreement Act: Basicsby Carolyn J. Woodruff, JD, CPA, CVA, North Carolina Family Law Specialist
The North Carolina Premarital Agreement Act describes the law for the creation of valid, enforceable premarital agreement. The North Carolina Premarital Agreement Act is under North Carolina General Statutes Chapter 52B. This will be one of several articles discussing the North Carolina Premarital Agreement Act.
Formalities: Obviously, a premarital agreement should be completed before the wedding, and practically, I suggest the prenuptial agreement be finalized before the wedding invitations are sent out. The Agreement must be in writing and signed by both parties. Note, the statute does not require notarization, but I think it is a better practice to notarize the Premarital Agreement. I also ask my clients to initial and date each page so no one can argue later than a page was changed or slip-sheeted into the document. (Yes, I do this every day, and I have seen this slip-sheet argument of “that is not what I signed.”)
Content: The content of a North Carolina premarital agreement varies based upon individual needs and wants. Most typically, content revolves around three topics: spousal support, property division (equitable distribution) upon divorce, and death (Wills and Trusts).
Spousal support is easiest to discuss. The parties to the marriage can decide ahead of time exactly how spousal support should be handled at divorce, or even whether there should be spousal support. Spousal support can be waived in the Premarital Agreement. Likewise, spousal support can be a stated amount dependent on the number of years of marriage before separation/divorce. Spousal support can be anything you want it to be, as long as you agree before the wedding in the prenup.
Property Division or Equitable Distribution can be waived in its entirety. Or in the alternative, parameters for the division of property in the event of a divorce can be put in place. For example, the bride and groom could agree to let the title to assets control in the event of a separation. For example, the prenup can provide: if husband puts wife’s name on real estate, that real estate becomes hers in the event of the divorce because the real estate was titled to her. Important many times for family businesses are premarital provisions defining the right of the non-family member to the business or its appreciation in the event of separation and divorce.
Marriage creates by law rights and obligations upon the death of the surviving spouse to the deceased spouse’s estate. These obligations, rights, and benefits can be altered by a premarital agreement. A prospective spouse can waive the rights to a future surviving spouse’s estate. (One can waive the right to take under the Will of the future spouse.) Contrast, a prospective spouse can agree to alter the default provisions in the law to the future surviving spouse’s estate.
The support of a child cannot be “adversely affected” by a Premarital Agreement.
One can decide which state’s law applies to a premarital agreement, but rarely couples negotiate situs except when the prospective bride and groom are not from the same State, or the couple plans to move shortly after the wedding. I have on rare occasion seen forum shopping to get away from Community Property States.
Stay tuned as we explore together the North Carolina Premarital Agreement in future articles.