One type of agreement that has long been viewed skeptically by those who believe that romance is all you need in marriage is the prenuptial agreement. Surprisingly enough, however, it is becoming more common for a spouse to request a prenup in order to keep valuable assets out of court in the event of a divorce proceeding.
A prenuptial agreement protects not only separately owned assets at the time of marriage, but also future assets, such as are acquired during marriage by business ownership as a business grows, or when a trust or other property is acquired during the marriage.
For example, one spouse may expect his or her parents to transfer control of a trust at a future date. Or, in the case of a business, future income, whether as salary, dividends or stock, may become fair game in a divorce if terms are not set at the beginning. Anticipated future debt may also become part of the marital estate rather than the responsibility of the partner who acquired it.
In order to protect future assets in a prenup, it is important to use specific language to describe future actions, such as current or future ownership interests, anticipated income or growth, a full description of a trust or other estate instrument as well as who will own it, or who will be responsible for future debt.
Prenuptial agreements in North Carolina
North Carolina laws specify what can and cannot be included in a prenup. The prenuptial agreement may include:
- Specified property division in the event of separation, divorce or death
- Specifics of managing or controlling property, including buying, selling, assigning, leasing, disposing of or consuming assets
- Changes in spousal support
- An estate instrument such as a will or trust that will include the terms of the prenup
- Life insurance beneficiary designations
The prenuptial can be only be revoked or amended after marriage by a written agreement signed by both parties. If the prenup is challenged or one party attempts to invalidate it, they must be able to prove that there was coercion or that some elements of the prenup were not disclosed, such as the property or financial obligations of the other party.
Having a pragmatic approach to protecting important financial holdings can actually give both partners peace of mind at the outset of their life together. For residents of Winston-Salem and surrounding areas, it is wise to have an experienced legal source to review documents or advise you on your property concerns.