Can a Prenuptial Agreement Be Rejected by North Carolina Courts?
Years ago, you might have created a prenuptial agreement with your spouse in order to protect your assets and wealth from unfair distribution in the case of a divorce. Now that your marriage has ended, you may be wondering whether or not your prenuptial agreement will actually stand up to scrutiny in court. The truth of the matter is that there are a number of reasons a prenuptial agreement may be invalidated in North Carolina.
Understanding why a prenup might be rejected by a North Carolina District Court is the first step to addressing this issue. Prenuptial agreements must follow a very strict set of laws set forth by the state. If your prenuptial agreement violates any of these laws, it may not be enforceable.
Your next step is to enlist the help of a qualified divorce attorney who has experience with high net worth divorces. Prenuptial agreements are regularly challenged in North Carolina, but these challenges are not always successful. With an experienced attorney by your side, you stand a strong chance of enforcing the agreements made in your prenuptial agreement and keeping hold of the assets that are rightfully yours.
- What Is a Prenuptial Agreement?
- The Limitations of Premarital Agreements in North Carolina
- When Does a Prenuptial Agreement Become Unenforceable?
Also known as a premarital agreement or simply a “prenup,” a prenuptial agreement outlines certain rights and obligations for spouses if and when the marriage ends. As the name implies, these legal contracts are signed before the marriage takes place, and they go into effect after the marriage ends.
Residents of North Carolina often create prenuptial agreements if they have a high net worth and want to make sure they do not lose assets - especially property that has been in the family for generations. North Carolina formally recognizes the validity of prenuptial agreements according to a statute called the Uniform Premarital Agreement Act.
While the Uniform Premarital Agreement Act recognizes prenuptial agreements as legally-binding contracts in North Carolina, the statute also places notable limitations on these agreements. Whether you are creating a prenup for the first time or you are revisiting one that you signed decades ago, it is important to understand how these limitations can potentially impact your situation.
First of all, North Carolina limits what you can actually put in your prenuptial agreement. These limitations are actually quite minor, and both spouses can agree on virtually anything in the prenuptial agreement with a few caveats. Here are a few examples of things you might put in your prenuptial agreement:
- Your right to separate property
- How property is divided when you separate
- How property is divided when one spouse passes away
- How much spousal support you are going to pay after the marriage ends
- Whether a spouse is entitled to benefits from a life insurance policy
- Matters relating to estate planning
With all that said, there are a number of things you cannot do with a prenuptial agreement. First and foremost is virtually any matter relating to your children. The Uniform Premarital Agreement Act clearly states that your prenuptial agreement cannot infringe upon the rights of your children in any way. More specifically, your prenup has no bearing on child support or child custody.
Finally, you are limited to how much spousal support you can avoid paying as a result of your prenuptial agreement. While your premarital contract can help you avoid paying large sums to your former spouse after separation, you cannot leave them with nothing. If your spouse becomes eligible for public assistance (welfare) as a result of the terms of your prenuptial agreement, that aspect of the agreement becomes unenforceable. You may be required to pay spousal support, but only the amount that your former spouse needs to avoid going on welfare.
In many divorces, spouses may attempt to show the court that the prenuptial agreement is unenforceable. They can attempt to do this by proving the following:
- They Signed the Agreement Involuntarily: If your former spouse can somehow prove that they signed the prenup under duress or as a result of coercion, a judge may decide that the agreement is unenforceable. While this is one of the most common ways in which spouses attempt to invalidate the prenup, it may be difficult to prove.
- The Agreement Was Unconscionable: The definition of “unconscionable” is “not right or reasonable.” In the context of a prenuptial agreement, this generally means that the contract was obviously unfair to one of the spouses. Examples of unconscionability might be the fact that one spouse did not really understand the contract, or the fact that one spouse did not fully disclose the extent of their wealth.
If you are having issues with your prenuptial agreement, your best bet is to hire an experienced divorce attorney. Reach out to Arnold & Smith PLLCtoday at one of our three offices at 704-370-2828.