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When might a premarital agreement be invalid in North Carolina?

On Behalf of | Dec 10, 2021 | Divorce, Family Law |

Premarital (“prenuptial”) agreements can be very helpful in the right circumstances. They can give a person of means the right to direct their existing property to their children, for example, when a divorce might direct it to their spouse. Yet premarital agreements can’t – and shouldn’t – govern every aspect of your marriage.

If you are considering a premarital agreement, you have probably thought carefully about what you would like to be in that agreement. You’ve probably taken the time and made the effort to get your spouse on board. Now, with the help of your attorney, you’re ready to put everything in place. What should you consider?

What can a premarital agreement contain?

Under North Carolina’s Uniform Premarital Agreement Act, a premarital agreement may only contain certain things. Importantly, it cannot be used to limit child support obligations or determine child custody arrangements.

Your premarital agreement can cover:

  • Each party’s rights and obligations with respect to property
  • Each party’s right to buy, sell, use, transfer or otherwise dispose of property
  • What will happen to the property upon separation, divorce or another event
  • Setting, limiting or eliminating spousal support (“alimony”)
  • The use of wills, trusts or other arrangements to carry out the purpose of the agreement
  • The ownership rights in and disposition of the death benefit of life insurance policies
  • What state’s laws you will use to govern the agreement
  • Any other matter that doesn’t violate state law or public policy

What could make a premarital agreement invalid?

A premarital agreement may seem straightforward and does not appear to violate public policy, but it can be found invalid or at least partly ineffective under certain circumstances. Here are the main issues:

One spouse got nothing in the agreement. In North Carolina, premarital agreements are not enforceable unless there is consideration, meaning a quid pro quo. If all the rights belong to one spouse and all the obligations to the other, the agreement may lack consideration.

One spouse’s agreement was not voluntary. This could mean that one fiancé had a lawyer and the other did not, and the fiancé who did not have a lawyer felt coerced. Or, there may have been time pressure to sign because the wedding was coming up. If, for any reason, one of the parties does not feel they had any real choice but to sign, the agreement may not be enforceable.

The agreement was unconscionable. Sometimes, a premarital agreement is simply such a bad deal for one party that the courts will refuse to enforce it. Primarily, the courts consider whether both parties were equally aware of each other’s true financial position. For example, the agreement may be considered unconscionable if:

  • One party was never provided with a fair and reasonable disclosure of the other party’s financial obligations, and
  • That party did not voluntarily and expressly waive the right to that disclosure, and
  • That party did not have, or reasonably could not have had, an adequate understanding of the other party’s financial obligations

One spouse will end up on welfare. Even if the premarital agreement is otherwise valid, the courts can modify it if enforcing it would make one party eligible for public assistance. The court may require alimony for the dependent spouse in this situation to the extent that it avoids eligibility for public assistance.

The marriage is found to be void. If your marriage were to be found void, an otherwise valid premarital agreement would only be upheld to the extent necessary to avoid an inequitable result.

Be sure your premarital agreement will be valid by working with an experienced, compassionate attorney who understands North Carolina law.

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