The Benefits of a Prenuptial Agreement
Prenuptial agreements are not just for celebrities and individuals of high net worth. When couples start preparing emotionally for marriage, they also start to think about their financial future together. They are not just uniting their hearts; they are also uniting their finances and property. Couples might discuss what each person owns and what assets each will bring to the marriage in income, investments, 401(k) plans, etc. If one partner is considering taking on educational loans or starting a business, those issues need to be discussed and planned for as well.
Some people feel that prenuptial agreements have a negative connotation, signaling that the marriage is not going to last or that the couple does not trust each other fully. But that should not be how they are viewed.
The months before tying the knot are the best time for you, as an engaged couple, to set out what your agreements and expectations will be moving forward. Financial issues are often a root cause of disagreements and conflicts in marriage and frequently the reason for divorce. Drafting a prenuptial agreement can be a very wise undertaking. Entering into a prenuptial agreement may remove potential conflict in a marriage. In the event of a divorce, it can protect both parties’ rights and prevent a future court battle.
What is a Prenuptial Agreement?
A prenuptial agreement is a legally binding contract that two people enter into before getting married that can outline the resolution of issues relating to property division, spousal support, and other financial matters should the marriage end in divorce. In addition to mapping out how property is divided, a prenuptial agreement can outline issues related to dividing retirement funds and dividing how the parties intend to use their respective incomes during the marriage.
A prenuptial agreement has many benefits for both parties, including:
Creating a Prenuptial Agreement
Creating a prenuptial agreement, also known as a Prenup, is both like drafting a blueprint that sets out what your arrangements and expectations are should the marriage come to a close. You can outline everything from income and asset sharing to retirement funds and the future financial responsibilities for any potential children.
Creating a prenuptial agreement does not mean that a couple loves or trusts each other any less than a couple without such an agreement. Establishing a Prenup just means that you are intelligent and reasonable adults who want to avoid future misunderstandings, layout agreed-upon decisions, and exercise appropriate cautions. As mature adults, you recognize that disagreements can and will arise in all relationships and people sometimes change in unexpected ways. Of course, no one enters marriage with the thought of divorce, but the fact is that not all marriages last forever. A high percentage of married couples do part ways. Now is the right time to prepare a prenuptial agreement that is not only fair to both parties and provides peace of mind but also might prevent some conflicts that could end in divorce.
Our family lawyers at Wilson, Reives & Silverman draft contracts that empower our clients to think through the inevitable challenges ahead and protect themselves in the event that they do experience divorce. A Prenup lets everyone move forward towards marriage with confidence.
Premarital and Marital Property Law in North Carolina
North Carolina state law outlines that any property obtained prior to marriage belongs to the individual and is not subject to equitable distribution of property in a divorce settlement. However, the law has gray zones. A family law attorney can help you navigate these gray areas.
For example, imagine that one person has owned a condominium for several years when the couple marries and the spouse moves in. They start to make mortgage payments and complete renovations with both incomes. Now the equity accumulated in the condo could make it a type of marital joint property.
There are other examples of how premarital property shifts into marital property, including when a couple starts to invest in retirement funds and stock accounts, or the business one person owns increases in value after the marriage. A prenuptial agreement lawyer can work with you to explore these legal gray areas and create solutions that are acceptable to both parties.
Why Get a Prenup?
While not every couple will decide they need a prenuptial agreement, it is important to consider. Here are some questions to ask yourself:
What is a Postnuptial Agreement?
A postnuptial agreement is essentially like a prenuptial agreement except that it is drafted and executed for couples who are already married. Like a Prenup, a Postnup sets forth the distribution of property acquired before and during the marriage. As with a Prenup, couples may find this agreement beneficial to resolve issues related to business planning, tax liability, estate planning, inheritance matters involving the spouse and children, life insurance, and retirement division.
How to Best Work with a Family Law Attorney on Prenuptial and Postnuptial Agreements in NC
- Work on Your Prenup Agreement Months before your Wedding.
If you want to create a prenuptial agreement, do not wait until the stressful weeks before your wedding. Try to meet with a lawyer at least 30 days before the big event. It is very important that neither party feel forced into signing an agreement. This could be a basis for voiding the agreement later on. Both parties must have sufficient time to review and understand the agreement.
- Make Sure Both Parties Consider the Prenup or Postnup Agreements as Insurance
When working together on an agreement, it is important that both parties see the work on the document as insurance against something neither wants to happen: divorce. Like car or home insurance, you never want to have to use it, but it provides protection and peace of mind.
Consult with an Experienced Prenuptial Lawyer
Prenups and Postnups are comprehensive, sometimes complex, documents. It is important to work with an experienced attorney to draft one. If you are interested in scheduling a discussion, our family law attorneys at Wilson, Reives, Silverman & Doran help couples throughout Lee County and beyond, including Sanford, Apex, and Raleigh, North Carolina. Our experienced family law lawyers look forward to working with you. Contact us today.