Matrimonial Law in North Carolina
Frequently, the first experience anyone has with matrimonial law is with the request by a fiancée or fiancé for a premarital agreement (also known as antenuptial or prenuptial agreements). In the past five years there has been a significant increase in requests for premarital agreements and it is women who are increasingly doing the asking. http://www.aaml.org/about-the-academy/press/press-releases/pre-post-nuptial-agreements/big-rise-prenuptial-agreements-sa.
A premarital agreement is a contract signed by both the prospective husband and wife in anticipation of marriage which becomes effective once the marriage is solemnized. Premarital agreements do not require consideration other than the marriage itself. Premarital agreements are used to resolve issues which may arise in the event of divorce or death of a spouse such as division of property or support of a spouse. The Uniform Premarital Agreement Act (UPAA) has been adopted in 26 states including North Carolina as well as the District of Columbia.
In North Carolina, prospective spouses may contract with each other about the following:
- The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;
- The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
- The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
- The modification or elimination of spousal support;
- The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
- The ownership rights in and disposition of the death benefit from a life insurance policy;
- The choice of law governing the construction of the agreement; and
- Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.
The North Carolina Premarital Agreement Act provides that a premarital agreement is not enforceable if the party against whom enforcement is sought proves that:
- That party did not execute the agreement voluntarily; or
- The agreement was unconscionable when it was executed and, before execution of the agreement, that party:
- a. Was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
- b. Did not voluntarily and expressly waive, in writing, any right to disclosure of the property orfinancial obligations of the other party beyond the disclosure provided; and
- c. Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.
N.C. Gen Stat. §52B-1 et seq.
To avoid a later challenge to a premarital agreement, in the event of a divorce or death of a spouse, it is critical that there be full and fair financial disclosure of the property owned by the prospective spouses and each of their financial obligations. There should also be a waiver of the right to any further financial disclosure other than that provided by each prospective spouse prior to execution of the premarital agreement. To accomplish these objectives, the premarital agreement should attach a complete financial statement of each party, disclosing the income and assets of both parties and the current value of the assets.
- A determination of unconscionability involves finding both procedural and substantive unfairness. Procedural unconscionability involves “bargaining naughtiness,” “such as deception or a refusal to bargain over contract terms.” The failure of a prospective spouse to accurately disclose his or her assets and liabilities when negotiating a premarital agreement can constitute procedural unconscionability, even if the failure to disclose does not amount to the level of actual fraud. Substantive unconscionability involves the “inequality of the bargain.” (See Sidden v. Mailman, 137 N.C. App. 669, 529 S.E.2d 266 (2000)).
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