The Facts You Need on Postnuptial Agreements in North Carolina

What Is a Postnuptial Agreement?

A postnuptial agreement is an agreement entered into by a husband and wife after they marry. If executed in a manner which complies with the legal formalities, in the event of divorce or legal separation, the agreement will control over the result in any subsequent court proceeding so long as it does not affect the court’s ability to award a party alimony or provide for child support. Unlike a prenuptial agreement, no party must affirmatively disclose assets and liabilities to the other prior to the execution of a postnuptial agreement. However, generally speaking a postnuptial is a contract like any other, and so the party preparing the agreement should consider disclosing the property holdings, income and liabilities of the parties in order to have a well drafted enforceable agreement .
Unlike a prenuptial agreement, a postnuptial agreement also does not need to be entered into prior to the marriage. People enter into postnuptial agreements after they are already married for a variety of reasons. Sometimes, both of the parties have been married previously and now have children from the earlier marriages. They may wish to clarify the potential interest of the children from the earlier marriage in certain property. Or, perhaps one spouse has recently received a sizeable gift or inheritance and the couple wishes to ensure that such an inheritance does not later become part of the marital estate.

Requirements Under North Carolina Law

To ensure a postnuptial agreement is legally binding in North Carolina, it must be written and signed by both parties. While the state does not explicitly require pre-agreement disclosures, enforcing a postnuptial agreement may become more difficult if one partner is not completely transparent with the other about assets and debts at the time the deal is finalized. In addition, at least one authoritative source suggests that it may be a good idea to file an affidavit with the Clerk of Court or Register of Deeds’ office in the county where you live. This basically serves as a public record of the agreement.
It’s a good idea to have a postnuptial agreement reviewed by an attorney prior to signing. Even if the contract appears to be crafted fairly, there could still be flaws that put the agreement at risk of being thrown out by a judge.

The Advantages of a Postnuptial Agreement

A postnuptial agreement carries a number of advantages for spouses in North Carolina. From financial security to clarifying expectations for the marriage, these agreements can provide immense value for some couples.
Financial security
One of the primary reasons a couple might enter into a postnuptial agreement is for added financial security. A postnuptial agreement can address many important financial issues, including spousal support and property distribution upon divorce or death. A spouse’s share of marital property is determined by North Carolina’s laws of equitable distribution, which may not be in your favor should you and your spouse separate or divorce in the future. A postnuptial agreement can ensure assets are divided in a way that both spouses deem fair and sensible.
Peace of mind
A postnuptial agreement adds overall peace of mind to the marriage, allowing each spouse to enjoy the benefits of knowing that they are financially protected should circumstances change. They don’t have to worry about the possibility of losing their quality of life, their health insurance or even their home as a result of divorce or death.
Clarity
A postnuptial agreement can establish expectations for each spouse within the marriage, helping to reduce conflicts and promote harmony. For example, some North Carolina couples use postnuptial agreements to clarify and address issues such as who will handle certain household chores, how to obtain childcare or what will happen if you’re a stay-at-home spouse in the event of a divorce or separation. While marital issues should be handled directly between spouses, having an established agreement helps to reduce tension and confusion.

Typical Elements of a Postnuptial Agreement

Due to the nature of issues addressed within a postnuptial agreement, they are something of a double edge sword. On the one hand, the majority of provisions considered commonly in these agreements either deal with what could be considered the most intimate and unpleasant aspects of a marriage, like finances, custody, and property division, or require the same in-depth disclosures and forthright, honest acceptance that is needed for prenuptial agreements. On the other hand, postnuptial agreements can help bring a new level of clarity to a relationship, by handling ahead of time problems that could cause resentment and, therefore, lead to important decisions and agreements without the benefit of having those terms settled and mutually agreed upon.
There are a multitude of different considerations that can be brought up in a postnuptial agreement, but the following are the most common.
Disclosures A provision indicating that both parties are providing honest disclosure of all assets and debts and are doing so freely and voluntarily.
Spousal Support/Maintenance A provision detailing anticipated alimony or maintenance amounts, duration, and formula used to set value. If spousal support is not allocated, a provision waiving all claims for spousal support is often included.
Division of Assets If assets are to be divided in case of divorce after a certain amount of years of separation, then a provision will explain how the process will go about asset division, debts, and equitable distribution of property.
Safeguarding Separate Property A provision will be included to determine if any assets need to be protected by either party. Such protection would be achieved as a part of the separate property award or by decreasing property awards to account for increases attributed to such protection.

How to Draft an Enforceable Agreement

Enforceable premarital or postnuptial agreements must be in writing, signed by both spouses, and separately acknowledged before a notary (like a deed or mortgage). The agreement must be on fair and reasonable terms, entered into voluntarily and the parties must have full disclosure of financial affairs (N.C. Gen. Stat. § 52-10) unless the party resigns his or her rights to disclosure.
A court can set aside or refuse to enforce a postnuptial agreement for several reasons including that the agreement was unconscionable when it was executed; that the party was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; that the party did not voluntarily execute the agreement; or that the party was not represented by independent legal counsel at the time the agreement was executed (N . C. Gen. Stat. § 52-10.3).
So if you and your spouse want to enter into a valid postnuptial agreement, you should consult with an attorney early in the process. Like premarital agreements, postnuptial agreements require a full and frank disclosure of all assets, debts and income.
After both spouses have disclosed their matters, generally the parties need to negotiate the terms. Even if the parties have previously discussed financial matters, negotiation can still be useful. Give and take can build the trust that may have been lacking in the past. Though starting the process of separation can be a source of conflict, it can also be the first step in moving toward the trust and honesty that will be necessary to make the agreement work so that the parties can live a happier life.

Limitations and Challenges

As with any contractual agreement, the enforceability of postnuptial agreements may be subject to legal challenge or limited by law. If a postnuptial agreement is not executed voluntarily or the terms are deemed unconscionable, a court may refuse to enforce the terms agreed upon. Enforceability issues may include the following circumstances: Such circumstances may render the postnuptial agreement invalid, or in the case of the latter circumstance may allow a court to retroactively enforce its terms, after resolving any alleged issues of fraud. Unfortunately, the law relating to postnuptial agreements in North Carolina is not well defined. Courts generally retain the discretion to determine whether the terms of the agreement should be enforced in particular circumstances. The Division of Property and Payments is one of the most complex areas of family law and it is imperative that you obtain the advice of an attorney who is experienced in the preparation and litigation of all types of marital agreements.

Selecting the Right NC Attorney

When dealing with a postnuptial agreement, educating yourself about the process is important. But working with an experienced attorney can have a huge impact on the outcome for you and your spouse. Unfortunately, not every attorney is equal. It’s important to work with someone who has a plan for your case and who understands the unique issues that may arise regarding postnuptial agreements. Although the decision to enter into a postnuptial agreement is a personal one between spouses, the right attorney will be sensitive to that fact during the process. You and your attorney will want to go through the details of your life — from finances to personal and family history. Your postnuptial agreement lawyer will also make sure that your spouse is on board with the process so that the agreement is accepted and understood by both parties and that you are not at an unfair advantage. The task of making choices about your current situation can be difficult , but it’s better with the right lawyer by your side. A postnuptial agreement lawyer will be able to outline potential outcomes and let you know what you’re facing. When researching potential candidates, you’ll want to find out if he or she has experience handling postnuptial agreements in the state of North Carolina. Experienced legal professionals will be able to point you toward the most appropriate next steps and answer your questions in a timely and clear manner. It’s normal to feel nervous when entering into the process of handling a postnuptial agreement in North Carolina, but there’s no need to fear when you’ve got the experience and expertise you need.