What is a prenup?
An agreement before marriage is a contract so a prenuptial agreement is a contract between two people before marriage. Most prenuptial agreements are entered into voluntarily and are easy to enforce. The South Carolina Uniform Premarital Agreement Act, S.C. Code Ann. § 20-7-1505 et. seq., controls prenuptial agreements made in South Carolina after July 1, 1987, with some exceptions.
Married persons can enter into premarital agreements before the marriage occurs. This gives couples an opportunity to make reasonable and enforceable provisions for asset divisions and support in the event of divorce . Future plans can be set for shared property/finances, alimony, even lifestyle arrangements and future behavior.
Anything that a couple doesn’t want left to the vagaries and risks of the South Carolina family courts can be reduced to writing and agreed upon in advance through a premarital agreement. Financial matters including property division, alimony amounts, each party’s liabilities, alimony duration, distribution of retirement plans and debt obligations can all be carefully provided for in an enforceable manner through a premarital agreement.
Statutory requirements in SC
The enforceability of a prenuptial agreement in South Carolina is governed by South Carolina Code Section 20-3-150, which provides that:
A. Every contract made in contemplation of marriage must be in writing, signed by the parties and dated….
B. A prenuptial agreement is enforceable without consideration in the event of any separation thereafter or in contemplation of divorce or death and becomes effective upon marriage.
C. A prenuptial agreement is not enforceable if the court finds that:
- (1) the party against whom enforcement is sought was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
- (2) the right to consult with independent legal counsel was not provided to that party;
- (3) that party did not expressly waive the right; or
- (4) the agreement was unconscionable when made.
D. Subsequent to the marriage the court shall exercise its powers to set aside an agreement only if, on the basis of the present value of the parties’ existing resources, the agreement no longer establishes the distribution of property that would be equitable.
Therefore, in order for a prenuptial agreement to be enforceable it must (1) be in writing, (2) signed by both parties, (3) dated, and (4) fair and reasonable. Failure to fulfill all four of these requirements will cause your agreement to be unenforceable.
Pros and cons of a prenup
Recognizing the Benefits of a Prenuptial Agreement
A common misconception about prenuptial agreements is that they are only necessary for the wealthy. In fact, even those with a modest level of wealth can benefit from a prenup. After all, even the most modest assets will be at risk of division should the marriage end in divorce. Protecting such assets can help you maintain the lifestyle to which you’ve become accustomed after the dissolution of the marriage.
There are numerous reasons for pursuing a prenuptial agreement. One of the primary advantages of a prenup is that it can protect your separate property. Should you or your future spouse have separate property that you would like to retain, such as an inheritance, you can outline exactly what belongs to whom in a written contract.
If you and your spouse will share business interests, a prenuptial agreement can help protect the business in case of divorce. It can also help you and your future spouse address and resolve any issues regarding debts, such as those associated with student loans. The dissolution of marriage can be an unpleasant experience, and issues associated with debt can complicate the process even further. Having a plan for resolving these issues ahead of time can be advantageous.
Beyond the personal reasons for drafting a prenuptial agreement, such as protection against debt and safeguarding separate property, there are other benefits as well. If you or your future spouse have children from a previous marriage, a prenup can clarify how child support and visitation will occur and who will be responsible for the different costs associated with raising them. It can also address other age-appropriate needs, such as college costs or other expenses related to education.
Myths and misunderstandings
Many people think that a prenuptial agreement is only for those planning to marry a wealthy spouse. This may have been true years ago when such agreements were still relatively rare, but today, the truth is that you don’t have to be wealthy or on your third marriage to have a prenup. People from a variety of backgrounds now see a prenuptial agreement as a way to protect their wealth, especially if they own a business and have concerns about losing that business in the event of a divorce.
Some people believe prenuptial agreements are unfair, but this perception may be due to the fact that you are entering a legally binding contract with your soon-to-be spouse and no one wants to feel as though he or she is somehow signing away his or her rights. At the end of the day, however, both parties negotiate the terms of the contract collaboratively, which means that negotiated terms will be fair and equitable for both sides. You won’t know how much negotiating will take place until you’ve discussed the contract terms with your fiancé, but you should be able to agree that the basic principle of a prenup is to outline the terms by which your property will be divided in the event of a divorce.
A common misconception is that you cannot write off spousal support in a prenuptial agreement, but that is simply not the case. Be advised, however, that in South Carolina, any requirement that a paying spouse retain life insurance in an amount related to the amount of support being paid may violate public policy and be void. Another misconception is that prenuptial agreements are expensive, which may be true with other contracts. Since prenuptial agreements are completely fair and equitable for both parties, the cost of drafting and finalizing a prenup does not typically require the same significant legal fees associated with other types of contracts.
Finally, many people think that South Carolina law does not allow prenuptial agreements, but most people are surprised to learn that is inaccurate. While states differ as to prenup regulations, the fact is that South Carolina does allow for prenups provided they meet the requirements of the law. You should discuss your particular situation with a qualified attorney in order to determine the best course of action for you and your relationship.
How to draft a valid prenup
The process of drafting a prenuptial agreement is a negotiation. The attorneys for the parties should be involved and the parties should consider all issues which may arise in the event of a separation and divorce. The most frequent problem encountered with negotiating a prenuptial agreement is that the parties are more concerned with whether the prenuptial agreement will be enforceable rather than really looking at the possibilities which could develop if the marriage fails. In some cases, I have been involved with clients who really do not want a prenuptial agreement , but their parents are insisting it as a pre-condition to providing help such as a down payment on a house.
A prenuptial agreement in South Carolina should include the following:
The parties must also disclose their respective assets and debts and agree on how property is to be divided in the event of separation and divorce, alimony, and how children will be supported (including any future children) and how tuition will be paid if these children attend private school and/or college.
One issue that often arises in negotiating a prenuptial agreement is that one party owns a business and the other does not. It is important that the value of the business and other property owned prior to marriage be considered so that the business and any future appreciation is deemed to be separate property and not part of the marital estate.
Challenging a prenup
It is important to remember that while a prenuptial agreement is valid and binding on the parties, it may nonetheless be challenged in certain situations. The South Carolina statute regarding prenuptial agreements lays out the factors that can be used as a defense to a prenuptial agreement. These include the following: • The agreement was the product of fraud or duress • The agreement was unconscionable when executed and, as a result of the circumstances then existing, the challenging spouse was not provided a fair and reasonable disclosure of the financial obligations of the other party • The challenging spouse did not have, or reasonably could not have had, adequate knowledge of the other party’s financial obligations when entering the agreement • The challenging spouse was not provided a fair and reasonable disclosure of the property or financial obligations of the other party • The challenging spouse was not provided a fair and reasonable disclosure of the property in which the spouse would have an interest if the prenuptial agreement were not enforced and of the annual income of the other party If the agreement is challenged, the Court will hold a hearing and consider whether the prenuptial agreement is enforceable based upon the above factors. It should also be noted that the statute specifically provides that the existence of prenuptial agreement does not effect the right of either party to petition the Court for equitable division of marital property and debts based upon the relevant statutory factors.
Frequently asked questions
Still confused by the terms of a prenuptial agreement? We answer some of your most common questions below.
What should go into a prenuptial agreement? Most prenuptial agreements deal with what would happen in the event of divorce. These would include the distribution of property, including real estate, bank accounts, investments, and other marital assets. Also common is the future treatment of spousal support in the event of divorce. A less frequently included topic is the treatment of children in the case of divorce. In South Carolina, courts are less likely to enforce stipulations that violate or otherwise interfere with child support or custody because they are considered to be made for the best interest of the child.
When should I get a prenuptial agreement? It is important that you enter into a prenuptial agreement well before your wedding date if you want it to be enforceable. If you delay until the last minute , the court could construe it as being signed under duress, and therefore, not valid. While we understand that it may feel a little awkward to bring up a prenuptial agreement, addressing it well in advance means that you can have an honest, candid conversation about your and your children’s respective pre- and post- marital financial situations without the anxiety of an imminent marriage hanging over your heads.
How do I complete a prenuptial agreement? In order for a prenuptial agreement to be enforceable in South Carolina it must be: If contraception is involved, the agreement must be notarized after it has been signed by both parties.