Prenuptial agreements are an under-utilized tool for reducing the conflict and cost associated with divorce. The reasons that prenups are so rare are easy to discern: they take the “romance” out of divorce, they can be expensive and time-consuming to obtain, they are “only for the rich,” etc. Without dwelling on those issues (all of which can be debunked by experienced Charleston divorce attorneys), let’s examine the things one can do, cannot do, and must do with a prenuptial agreement.
What Can I Do With a Prenuptial Agreement in South Carolina?
1. Define what is and is not marital property.
Prospective spouses may agree in advance that certain items of property (let’s say a house) is and will remain the separate non-marital of one spouse, no matter what happens in the future. Without a prenuptial agreement, it is quite possible, perhaps even likely, that a home purchased prior to the marriage could be “transmuted” into a marital asset. A valid prenuptial agreement can negate this possibility.
A prenuptial agreement could also make any property, personal, real, or otherwise, purchased with one spouse’s earnings that spouse’s separate non-marital property.
The possibilities for dealing with the eventual distribution of the marital estate are limited only by the creativity of the parties and Charleston divorce attorneys involved. The division of property is really the strength of a prenuptial agreement.
2. Define methods for the division of marital property that deviate from South Carolina law.
Often, when parties enter a marriage on unequal financial footing, the wealthier spouse is seeking to protect his or her assets through the use of prenuptial agreement. As often, a prenuptial agreement is used as a tool to provide for the well-being of the less-wealthy spouse in a divorce. I have done a prenuptial agreement on behalf of a woman who was marrying a wealthy man with a well-documented history of philandering. the prenuptial agreement I crafted for her carved out an unequal share of marital assets in her favor in the event of an adultery-based divorce, a division she was unlikely to receive from any Family Court judge.
3. Control how either spouse may dispose of assets in a will or designate as beneficiaries of life insurance policies.
South Carolina law allows for a party to contract away the right to dispose of property in a certain manner, and also allows for restricting the change your life insurance beneficiary. Many parties enter into prenups before second marriages, and may have children from a prior marriage who they wish to receive all of their assets upon their death, and a prenup allows for a spouse to waive any interest in the estate, even his or her elective share (South Carolina law provides that a spouse receives one-third of an estate even if cut out of a will altogether).
4. Waivers of alimony.
I have had heated discussions on this topic with colleagues on the topic of waiving alimony by way of prenuptial agreement. I am always in the minority in my opinion that waivers of alimony are difficult to accomplish by way of prenup. It can be done, and almost everybody wants such a clause in their prenuptial agreement. But I believe it is important to remember this waiver comes with a caveat: if circumstances change between the signing of the prenup and the divorce that would make a waiver of alimony inequitable or unconscionable, a Court can refuse to enforce it (think spouse who goes from healthy wage-earner to totally disabled).
What Can I Not Do With a Prenuptial Agreement in South Carolina?
1. Address matters of child custody.
The Family Courts in this state will always reserve the right to make a determination as to what is in the child’s best interests at the time of the divorce; such determinations can never be made years in advance, before the child is even born.
2. Limit or waive child support.
Child support will be determined pursuant to the application of the Child Support Guidelines at the time of divorce, and no restrictions may be made on the Family Court’s ability to do so.
3. Require an illegal act.
While I have never seen this prohibition directly addressed, my imagination tells me that if someone were to attempt such a thing via prenuptial agreement, it would likely involve taxation and spousal cooperation with the secreting of assets from certain taxing authorities.
What Must I Do With a Prenuptial Agreement in South Carolina?
1. Each party to a prenuptial agreement must have his or her own independent counsel.
The proper execution of a prenuptial agreement requires the involvement of multiple Charleston divorce attorneys. Each party must be able to rely on independent counsel; one attorney will not suffice. Many is the prenuptial agreement that has crumbled on this requirement.
2. Each party must give full financial disclosure to the other.
This requirement is generally met by the execution of Financial Declarations, which are then attached to the agreement as exhibits. These documents would be drafted with the assistance of counsel. The absence of acknowledgement of full financial disclosure, and each party’s satisfaction with same, will be fatal to a prenuptial agreement.
3. There must be no fraud, duress, or coercion while contemplating or signing a prenuptial agreement.
If a Court later determines that the initial financial disclosure was fraudulently inaccurate or incomplete, the prenup is likely dead. More common is the situation in which one spouse springs on the other the idea of a prenuptial agreement in the week before the wedding, after all the invites have gone out, the caterers paid, venue booked, etc. The spouse having the agreement sprung on him or her faces the embarrassment and expense of calling the wedding off unless he or she coalesces in the other’s demands. This sort of coercion is not entirely uncommon and almost certain to render a prenup invalid.
If you are considering marriage, and would like to explore the idea of a prenuptial agreement in more detail, please feel free to contact one of our experienced Charleston divorce attorneys for further assistance.