Can a Prenuptial Agreement Help Me in a High Net Worth Divorce?
For North Carolina residents with high net worth, a prenuptial agreement can be a smart choice. Individuals who have significant assets and overall wealth are obviously within their rights to protect those assets, and a prenuptial agreement can help them with this goal. However, it is important to understand that a prenuptial agreement has limitations. While many people assume that this type of premarital contract allows you to take complete control over what happens as a result of a divorce, this is not always the case.
While judges certainly respect the legal legitimacy of a prenuptial agreement, they will also allow spouses to challenge the validity of these contracts. If you are concerned that your prenuptial agreement may be invalidated, it is important to enlist the help of a qualified attorney. You may also be creating a prenuptial agreement for the first time before you get married. In any case, it always makes sense to receive advice and guidance from a divorce attorney who has experience with these matters.The Uniform Premarital Agreement Act
North Carolina has its own set of laws that govern prenuptial agreements, and these laws are outlined in the Uniform Premarital Agreement Act. In this statute, a premarital agreement is defined as “an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.” According to the Uniform Act, premarital agreements can cover a wide range of potential issues and topics, although most individuals in the Tar Heel State create prenuptial agreements because they are concerned about the potential division/distribution of assets in the event of a divorce.
The Uniform Act also dictates how and when a prenuptial agreement becomes invalidated. If your prenup violates the terms and rules set forth by this statute, it may not be enforceable at court. This is why it is important to work with a qualified attorney when you create your prenuptial agreement and when separation occurs. An expert attorney can study the Uniform Act closely and create a prenuptial agreement that is essentially immune to challenges made by a former spouse.What You are Not Allowed to Put in Your Prenuptial Agreement
There are very few limitations on what you are allowed to put in your prenuptial agreement. In fact, the law clearly states that you and your spouse can agree to virtually anything, as long as it does not violate criminal law or public policy. This means that you could agree to unorthodox things that might otherwise be difficult to determine in a divorce, such as who gets to keep the family dog. Of course, you can also agree to things like whether a spouse is entitled to payouts from life insurance policies, how assets are divided, and what happens in the case of a spouse’s death.
With all that said, there are a few notable subjects that you cannot put in your prenuptial agreement. Chief among these are any subjects that relate to your children. North Carolina makes it clear that a prenuptial agreement cannot infringe upon the rights of children in any way. In addition, any agreements made in your prenuptial agreement have no effect whatsoever on child support or child custody.
Finally, you may not be able to completely avoid spousal support, even if your prenuptial agreement includes stipulations on this subject. North Carolina will not allow spouses to go on public assistance (welfare) as a result of your prenuptial agreements. If your spouse becomes eligible for public assistance as a direct result of your divorce, you may be required to pay them a sum that makes them ineligible.How Your Spouse Might Attempt to Invalidate Your Prenuptial Agreement
There are a number of strategies your spouse and their attorney can use to invalidate your prenuptial agreement. A spouse who is trying to invalidate a prenup must prove one of two things:
- The Prenuptial Agreement was Signed Involuntarily, OR
- The Premarital Agreement was Unconscionable When Signed
If your spouse can prove that they signed the agreement involuntarily, a judge may determine that the prenup is unenforceable. For example, they might argue that they signed the contract under duress, or that they were coerced into doing it.
Your former spouse can also attempt to prove the agreement was unconscionable by claiming they did not understand the contract, or that they were not made fully aware of your wealth and assets in their entirety before the marriage.The Importance of Receiving Legal Assistance
Prenuptial agreements are often challenged in North Carolina, but these attempts are rarely successful if you have a qualified, experienced divorce attorney on your side. Reach out to Arnold & Smith, PLLC today at 704-370-2828.