Do I Need a Prenuptial Agreement?
Prenuptial agreements, also known as premarital agreements or “prenups”, are written contracts between two individuals who are getting married. A prenup can lay out, in advance, most of the financial terms and conditions of a potential divorce or future death of either spouse. Premarital agreements are not new—they have been around in some form for thousands of years. In the past, however, they have typically been regarded as something only wealthy couples need. This sentiment is starting to change, however, and prenups are being used increasingly even by couples with more limited means. This is especially true in second or subsequent marriages where parties want to protect the financial interests of, for example, their children from previous marriages.
What Does a Prenuptial Agreement Cover?
A prenup can address just about every financial matter that would need to be resolved if the couple ended up getting divorced. This includes:
- Division of Property: One of the most contentious issues during a divorce is deciding how the financial assets and property will be divided. Examples include homes, vehicles, investments, and many others. A prenup can ensure that property brought into a marriage will stay with its original owner in the event of a worst-case scenario. It can also set forth ground rules for how any future or jointly acquired assets will be divided.
- Division of Debts: On the other side of the ledger, many couples bring various debts into a marriage, such as mortgages, auto loans, credit cards, student loans, and personal loans. The prenuptial agreement can also clarify who is responsible for these debts if the couple splits up, as well as any future debts the couple may take on.
- Alimony: A premarital agreement can either be silent on alimony, thereby leaving it to the family court to decide in the event of divorce, or it can go ahead and waive it for one or both parties, or limit it to only being awarded under certain circumstances. This type of provision will usually be upheld by South Carolina courts so long as it’s fair and reasonable.
- Elective Share: Under the South Carolina Probate Code, if a spouse dies (with or without a will), the surviving spouse is entitled to “elect” to take 1/3 of the deceased spouse’s estate. This is true even if the deceased spouse had a Will that omitted the surviving spouse entirely. To remediate this, oftentimes couples want to include in their prenups a waiver of this elective share. If that’s included in a prenup, it means that the Will of a deceased spouse (or the intestate laws of SC if they don’t have a Will) will govern the allocation of their estate.
Two notable issues that cannot be covered by a premarital agreement are child support and child custody. These issues must be decided at the time of the divorce based on the child’s/children’s best interests.
Do I Need a Prenuptial Agreement?
Every circumstance is different, and it is ultimately up to you and your soon-to-be spouse to decide whether or not you should enter into a prenup. Here are some reasons you may want to consider taking this step:
- You and Your Spouse Have Significant Assets: Couples or individuals who have acquired wealth prior to marriage should consider a premarital agreement to protect those premarital assets. When either or both parties have a high net worth, it is often best to settle any future financial concerns that might result from a separation ahead of time. This allows each spouse to enter the marriage with peace of mind knowing that their financial circumstances will not change significantly if things don’t work out.
- There is a Major Difference in Assets Between the Spouses: If one partner is bringing significant assets or income into the marriage and the other is not, a prenup might make sense to both preserve premarital assets and establish a fair and reasonable alimony arrangement (or waiver) in advance. This is good for both spouses, because it provides certainty about this issue in the event the couple ends up parting ways.
- You Have Children from Prior Relationships: There are a lot of blended families these days and ensuring that each spouse’s children are taken care of is a major source of concern in the drafting of prenups. It is best to settle issues such as inheritance for the children and other financial matters ahead of time, because these types of issues often trigger major conflicts after a couple is married.
- You Have a Family-Owned or Closely-Held Business: Bringing a business into a marriage can be complicated, especially if this business has outside partners who do not want your new spouse to become a part owner at any time in the future. A prenuptial agreement can help ensure that the spouse who owns all (or part) of the business will retain his/her share if the couple divorces.
What about the Stigma attached to Prenups?
For many engaged couples, this is the biggest obstacle that needs to be overcome when pursuing a prenuptial agreement. There is a common perception that your partner will be angry about bringing it up, and that just broaching the subject could prompt them to call off the engagement. While it is true that this can be a delicate issue, prenups are becoming increasingly common, and for many couples, it is worth at least discussing the possibility of creating this type of agreement. For many couples, it is actually a positive discussion that assures both parties intend to enter the marriage for love and other non-financial reasons, and not because of some expectation of financial gain.
Speak with a Knowledgeable South Carolina Family Law Attorney
There are a number of parameters that must be met for a prenuptial agreement to be legally enforced in the family courts of South Carolina. If you are considering a prenuptial agreement, you need to make sure the document is worded correctly so that your interests are protected and to ensure the agreement will be legally enforceable. At The Cate Law Firm, we have helped numerous clients draft premarital agreements in South Carolina. We can also thoroughly review a prenuptial agreement for you that has already been drafted.
To schedule an initial consultation with one of our seasoned attorneys, call our office today at 864-585-4226. You may also send a secure and confidential message through our online contact form or stop by our Spartanburg office in person.