Prenuptial agreements, also called "premarital agreements," are contracts entered into between persons who intend to marry. While they are not appropriate for all couples, and can be tricky to negotiate, they can provide a measure of financial security and certainty in the event the new marriage is not successful.
Premarital agreements make good sense if:
- This is your or your partner's second or third marriage;
- You have (or your partner has) significant premarital assets; or
- You have (or your partner has) children from a prior relationship that you wish to protect.
A premarital agreement can protect your premarital assets from a claim by your spouse if you divorce or die. In North Carolina, assets owned by you prior to the marriage are not subject to division in the event of a divorce. But any appreciation in the value of those assets may be. And if you die, even if you make no provision in your will for your spouse, the law will grant your spouse a share in your estate. If your premarital estate is significant, a premarital agreement can specify how your spouse will share in that estate. It can also ensure that your children's inheritance is protected.
Next, a premarital agreement can specify how you will divide assets acquired during the marriage if you divorce. For many couples, the negotiation of a premarital agreement necessarily involves some discussion about where you will live and how you will support yourselves. Some couples choose to pool their incomes, while others elect to keep their money separate but to share in joint expenses. The premarital agreement addresses alimony and post-separation support. It can also address what you and your spouse will do with the marital residence in the event of a separation or divorce.
The discussions between partners that lead to a premarital agreement can be healthy and productive to their relationship. Each party comes into the marriage knowing where the other stands financially and what is important to the other. Committing to an orderly and peaceful separation, if it ever occurs, can bring peace of mind. Among other things, a respectful and sensitive negotiation prior to the marriage can set the tone for how you and your spouse will resolve disagreements, which all couples experience from time to time, during the marriage. As Benjamin Franklin once wrote, "An ounce of prevention is worth a pound of cure."