What is a Prenuptial Agreement?
There are mixed emotions about a prenuptial agreement. Some think it’s a realistic part of planning for the future; others think you’re planning for failure before getting married. Wherever you sit on the issue, if you are considering one, it’s best to understand how they work and why they are appealing to some.
A prenup is a legal contract that details how the couple wishes to handle essential matters should a divorce happen. Issues discussed include spousal support, division of assets and debts, and more. By creating an agreement while emotions are calm, a couple can put together an effective prenup that helps them have fewer questions and disputes in the future.
What Makes a Prenuptial Agreement Enforceable?
There’s nothing worse than discussing a somewhat uncomfortable topic and creating a legal agreement only to find that it’s not enforceable. Avoid some common errors to ensure the process is productive and your prenup is enforceable.
Reasonably fair – ensuring that the terms agreed upon are fair and reasonable for both parties is essential. If it is clear that one side is benefitting far more than the other, a judge may choose to throw out the agreement.
Transparency – both parties must be fully transparent regarding debts and assets. If it’s found later that one of the parties was misleading or dishonest about their financial situation at the time of the prenup, it may be invalid.
Voluntary Signatures – it’s vital to have willingness from both parties to sign the prenup rather than one of the parties feeling coerced into doing so. If the prenup is signed at the last minute before the wedding, this may indicate to a judge that one of the parties was unwilling to sign, and there may be an issue.
Divorce Prep – sometimes, the prenup may be worded to promote divorce rather than simply planning for it. Discuss with your trusted attorney what the wording should reflect to avoid this.
Community Property Vs. Equitable Division of Assets
Some states are considered community property states, meaning that most assets obtained during the marriage are considered jointly owned by both parties. In most cases, assets and debt are divided so that each party has equal assets and debt. For example, if one party ends up with a house valued at $100,000, the other party may end up owning other assets, such as retirement or a vehicle totaling $100,000 in value.
South Carolina is an equitable division state, meaning that all assets and debt considered marital will typically be equally divided between the two. Non-marital property is an inheritance or gift given to one spouse while married. Some spouses will choose to indicate or title assets gifted or inherited as joint accounts, which can change how they are divided amidst divorce.
Marital property refers to property or assets acquired throughout the marriage through marital funds, such as joint income, or through a sale of another marital asset. Examples include property, vehicles, boats, furniture, and household items.
Factors That Influence Equitable Division
Judges will revert to equitable division rules according to South Carolina laws but will also consider other factors.
Some of these factors include:
The income and earning potential of each spouse
Physical and emotional health of each spouse
Contributions to the family and marital property by each spouse throughout the marriage
Whether alimony or other support is awarded
Tax consequences for each party
Any prior support requirements from previous marriages that either party may have
Bypassing Equitable Division
With a valid prenup active, a couple can generally avoid their assets being subject to equitable division. As such, if assets are discussed within the prenup and how they will be divided, judges will review the prenup to ensure that it’s valid and enforceable, and if so, they will typically grant the wishes of the couple according to the prenup regarding the assets listed.
If other assets are incurred that are not listed within the prenup, they may be subject to equitable division.
If done correctly, an effective prenup’s verbiage can take precedence over the state’s laws regarding equitable division.
Other Alternatives to Prenuptial Agreements for Asset Division
Another alternative that may be an option for a divorcing couple if their prenuptial agreement isn’t valid is negotiation or mediation. The couple can negotiate through legal guidance or meet with a certified mediator to work through any disagreements that may be present.
The mediator can work through assets and debt with the couple and create a reasonable division. Once both parties agree on the asset division, these items are signed off on by all parties and presented to the courts. If some assets or debts haven’t been decided, the judge will likely review these items and rule accordingly.
Plan Now. Worry Less Later.
Though the topic of a prenuptial agreement can sometimes raise concerns, it’s one of the most practical approaches you can take to a marriage. By properly planning, you can avoid multiple issues or questions that arise that can lead to unnecessary disputes.
Work together while you have a clear mind and a positive outlook to help ensure you are protected and ready for whatever life throws at you.
Contact our office today at (864) 689-4482 to schedule your strategy session. We have over 25 years of experience in helping ensure that our client’s best interests are at heart and protected. We value your time and are compassionate about your needs and concerns.
We look forward to serving you.