As you plan your wedding, should you be planning your prenuptial agreement too? Depending on your circumstances, drafting a prenuptial agreement before you say “I do,” may be in your best interests.
Contrary to popular belief, prenups are not only for A-list celebrities and multi-millionaires. They can be extremely beneficial for all types of individuals, especially for those who own a business, who have children from a previous relationship, and those with any measurable assets.
What is a Prenuptial Agreement?
Prenuptial agreements are written contracts that people enter into before they get married. In simple terms, prenups list all of the property and debts each fiancé owns before the marriage and they clearly states what each person’s property rights will be after they get married, and in the event of a divorce. Prenups offer flexibility, allowing couples to step outside of North Carolina’s property division laws.
What are the benefits of a prenup?
- The fiancées go into the marriage with utter transparency about their financial status and financial expectations. This facilitates honesty and open communication.
- If a spouse has children from a previous relationship, a prenup can ensure that his or her children receive certain property if they were to pass away. Without a prenup, state law can mandate that certain property is passed to the decedent’s new spouse instead of their children.
- A prenup can clarify each spouse’s financial rights and responsibilities during the marriage and in the event of a divorce. This can give the spouses peace of mind.
- If a spouse owns a business, a prenup can state that the business shall remain separate property if the couple were to divorce – this can be a big deal if the business grows significantly or is a prized possession for the spouse who built it.
- A prenup can avoid potential arguments in case of a divorce by spelling out property division.
- A prenup can protect spouses from each other’s debts.
If you do not draft a prenuptial agreement and you divorce, North Carolina’s laws would determine how your property will be divided. North Carolina is an equitable distribution state; as such, if you and your spouse could not agree on property division, it would be up to the whims of a judge to decide, and he or she would divide your marital property in a manner they deem fair and equitable based – no precise predictability in this case.
Judges have discretion when it comes to dividing marital property in a North Carolina divorce, and this makes people nervous. Not only would you lose control in this scenario, but you would have no say in how your marital property would be divided.