Whether you want to protect assets you already own or anticipate owning in the future, protect one spouse from the other’s debts, protect children from a previous relationship, or have another reason, a prenuptial agreement is a good idea for most, if not all, marriages. However, a prenup agreement could be invalid if not properly written and signed, leaving everything you wanted to protect vulnerable. Fortunately, there are steps you can take to bulletproof your agreement and ensure that it is upheld by the court if it is ever needed. An experienced divorce attorney with King Law Offices may provide guidance regarding what can and cannot be included in a prenup, when and how to sign it, and how to enforce it if necessary. Call (888) 748-5464 to discuss your pre-marital legal protection needs and concerns.
What Is a Prenup Agreement?
A prenup agreement is a legal contract between two people about to get married. This contract allows the soon-to-be married couple to agree on specific issues that the court might otherwise decide if they divorce. For example, they might make decisions regarding the equitable distribution of marital property or who would be responsible for marital debts.
A prenup can also be used to address issues unique to the couple that perhaps would not be addressed by the court in a divorce or that are unrelated to divorce. For example, they may waive their rights to each other’s estates when they die, stipulate that specific assets will not be considered marital assets and will be passed on to the spouse’s children from a previous marriage, or require one spouse to provide health or life insurance for the other if they divorce. Some couples who intend to be parents one day also include a clause that requires the parents to have life insurance policies that would provide financially for the children if the parent dies.
South Carolina’s Legal Requirements for a Prenup
South Carolina addresses prenups in its state statutes and in case law. Case law simply means that decisions made by the court in previous cases apply to newer, similar cases as if they were laws. Understanding how the statutes and case law apply to prenups ensures that any prenup created is valid and enforceable.
South Carolina Statute
S.C. Code Ann. § 20-3-630(4) provides the requirements for a prenup agreement to be valid and enforceable. A valid prenup is in writing and voluntarily signed by both parties. The agreement must be fair and equitable. If the entire agreement is one-sided and overwhelmingly favors one spouse, a court will likely declare it invalid. If a particular clause in the agreement is one-sided and favors one spouse, that clause may be declared invalid while the rest of the prenup remains valid.
Both parties must provide full financial disclosure of all assets, debts, and income. Failure to fully disclose all of one or both parties’ financial information will result in an invalid prenup. Finally, both parties must be separately represented by legal counsel. This means that each person must have their own attorney who can review the prenup with them and ensure that it meets the legal requirements and that the individual comprehends fully what they are agreeing to.
Three-Part Test
In the case of Hardee v. Hardee, 585 S.E.2d 501 (2003), the South Carolina Supreme Court applied a three-part test to determine the validity of the couple’s prenup. This test is now applied by the state’s courts to determine the validity of prenups. The first part of this test determines whether the prenup was obtained through fraud, duress, or mistake, or whether there was any misrepresentation or nondisclosure of material facts that might have made one party agree. The second part of the test questions whether the prenup is unconscionable. This means that the agreement is one-sided.
Finally, the third part of the test asks whether the circumstances and facts have changed so significantly since the agreement was executed that it is unfair and unreasonable to enforce it. In other words, while the prenup may have been fair and reasonable when the couple signed it, if things are incredibly different from what they anticipated, the agreement may no longer be fair and reasonable, and the court should not enforce it. For example, the couple may have agreed that if they divorced, the husband would pay the wife $25,000 per year of marriage because they were planning for her to be a stay-at-home parent and have no income. If they did not have children or the wife worked and began earning an income significantly higher than the husband’s, the court may decide it would be unfair and unreasonable to expect the husband to pay her per the prenup.
What Can Invalidate a Prenup?
Even if a couple otherwise follows all the legal requirements for a prenup, a handful of things could still invalidate the agreement. Couples must be aware of these things and use caution to avoid them.
Involuntary Execution of the Agreement
Involuntary execution, or someone being forced to sign the prenup, will invalidate it. This force does not have to be physical. Holler v. Holler, 612 S.E.2d 469 (2005) established that a prenup was unenforceable because the husband told the wife that signing it was required to get married in South Carolina, which is not true. Additionally, she was from Ukraine and could not understand the terms of the prenup due to her limited ability to speak and understand English.
Both parties must sign the prenup free of “duress, fraud, misrepresentation, or mistake.” Other examples of duress, fraud, misrepresentation, or mistake include threatening to cut off financial support or take away the individual’s children, asking or demanding that they sign the prenup within just a few days or hours of the wedding, or not allowing them to review the terms of the agreement before signing. If one spouse does not speak or read English very well or struggles with reading in general, telling them that the prenup says something it does not would be fraud and invalidate the agreement.
Incomplete Financial Disclosure
Under S.C. Code Ann. 20-3-630(4), both parties must provide full financial disclosure regarding assets, income, and debt based on the family court rules. Under those rules, both parties must disclose:
- Income: Income includes bonuses, commissions, and all other sources of income.
- Assets: This includes real estate, retirement and investment accounts, and other assets.
- Liabilities: Liabilities are all debts, including credit card debt, mortgages, car or personal loans, and any other debt.
- Monthly Expenses: These are the individual’s various living expenses, including rent or mortgage payments, utility payments, groceries, fuel for vehicles, and other expenses.
- Childcare and Other Related Expenses: This can include regular childcare, such as daycare, or less consistent childcare, such as summer camps, babysitters, or nannies.
- Health Insurance and Medical Expenses: This can include health insurance premiums and other medical expenses.
Failing to fully disclose all required financial information will invalidate a prenup. Individuals uncertain about whether something should be included (such as a shared asset or an income stream) may want to consult with an experienced South Carolina divorce attorney at King Law Offices to review their finances and learn more about financial disclosures.
Unconscionable Terms
In Hardee vs. Hardee, the court declared that the terms of a prenup could not be so oppressive that a reasonable person would not make them, and no fair and honest person would accept them. This means that the agreement must be fair and balanced toward both parties. South Carolina courts will likely invalidate the contract if the prenup’s terms overwhelmingly and unreasonably favor one spouse.
What if one party has significantly more to protect than the other? A prenup is not necessarily overwhelmingly and unreasonably favoring that spouse simply because it protects them. Protecting those assets with a prenup is acceptable if they have significant assets that would not be subject to division in a divorce anyway. However, the party with less to protect should ensure that they understand the terms of the prenup, have spoken with an attorney, and are comfortable with what would happen if they divorce. Even with significantly different incomes and assets, both parties can negotiate to find what both think is fair.
Terms Related to Child Support or Custody
The court oversees child support and child custody when a couple divorces. This is to ensure that the best interests of the child are met, rather than an agreement that may be more favorable to a parent than the child’s needs. Therefore, including any terms related to child support or child custody can invalidate the prenup. Additionally, terms that would cause a spouse to break the law, or any terms that go against South Carolina public policy, will also invalidate a prenup.
Extra Steps to Bulletproof Your Prenup
Following the requirements explicitly laid out by South Carolina law and understanding how case law may impact a prenup, couples can draft a strong agreement that will likely stand up in court. However, they can take some additional steps to bulletproof their prenup further and ensure that it holds up.
Use Separate Attorneys for Review
Both parties should have an attorney review the prenup before they sign it to ensure the terms are fair and balanced. While the law requires separate attorneys, some couples may choose attorneys at the same firm, or one spouse may choose both parties’ attorneys because they are paying for it. This can complicate matters later if there is doubt regarding the prenup’s validity.
Instead, couples should use separate attorneys at different firms. If one spouse is paying for the other’s attorney, they should give the money directly to the spouse and allow them to choose and pay their own attorney to avoid any appearance of duress or coercion. Additionally, couples may choose to sign the prenup with their attorneys present, as this can show that the attorneys have reviewed the agreement and do not believe their clients are signing away any significant rights or agreeing to anything unjust.
Do Not Drink or Use Drugs Before Signing
Individuals must have the mental capacity to sign a prenup. Most people assume this means that the person cannot have dementia, intellectual disability, or certain mental illnesses. While this is true, it is only partially accurate. In addition to those things that create a long-term or permanent mental incapacity, even temporary incapacity can invalidate a prenup. This means that if either party is under the influence of recreational drugs, alcohol, or some medications, the prenup may be invalid.
This means that planning to sign a prenup after dinner, including a few glasses of red wine, may not be the best idea. Individuals should be fully sober when signing. If either party takes prescription medications, they may want to consult with an attorney to find out if any of them could potentially be used to argue a lack of mental capacity when they sign the agreement and how to avoid such a claim.
Have the Agreement Notarized
South Carolina does not legally require getting a prenup notarized. However, notarization can provide several additional layers of protection to ensure the prenup is not invalidated later. First, it confirms the validity of the signature if one party later claims they did not sign the agreement. A notary will confirm each party’s identity before notarizing the document, putting to rest any claim that a signature was forged in any way.
Notarization also provides proof that the individual understood what kind of document they were signing. Finally, it can eliminate questions regarding coercion or duress, because an ethical notary will not notarize a document if a signer seems uncomfortable, nervous, or upset in ways that are not appropriate to the kind of document they are signing.
Video the Signing
Like notarization, a video of the signing is not a legal requirement in South Carolina. However, having someone take a video (or simply set up a camera or phone to record themselves) can provide additional evidence proving that the agreement was not signed under duress or coercion and providing the date and time the agreement was signed.
Ask for Written Explanations
Asking for written explanations of any legal terms that the individual does not understand can also show that they took steps to ensure they fully comprehend the prenup. Even if the individual believes they understand the prenup, asking for written explanations of key terms and clauses will show that they took this legal document seriously and ensured they thoroughly understood what they were signing.
Sign the Agreement Well Before the Wedding
A prenup must be signed freely and without pressure, and the parties signing it must have time to consult with an attorney. This means that presenting a prenup the day of the wedding, two days before, or even a week before the wedding, may be too late. By waiting until the last moment, the individual may have felt pressured to sign (because they have already paid for everything, sent invitations, and may even have family or friends from out of town who have arrived already). Additionally, the prenup being signed so close to the wedding can also make it appear that the individual may not have had time to read the agreement, have their attorney review it, or have time to consider or negotiate the terms.
Instead, couples should sign the prenup at least thirty days before the wedding. If something changes close to the wedding and the couple believes they need a prenup when they previously did not, they may want to consult with an attorney to learn about postnuptial agreements that may be more suited to their needs, or what other alternatives they may have for ensuring that a prenup is valid.
Do Not Make Any Changes, Additions, or Deletions After Signing
Any changes, additions, or deletions after signing a prenup can invalidate it, as the signatures agreed to what was originally on the document, not anything changed after the fact. Even a seemingly minor correction of a typo or adding a word can be enough to invalidate the prenup. Therefore, multiple parties should review the document thoroughly before it is signed. If an error is discovered after signing the prenup, it is better to draft a new document and sign it again. If the error is discovered after the marriage has occurred, consulting with an attorney to learn how the error affects the prenup and whether there are options for correcting it may be necessary.
How a South Carolina Divorce Attorney May Benefit You
A prenup agreement can be an excellent way for couples to protect their separate assets and children from previous relationships. Whether they are used to protect assets, waive alimony, or to ensure one spouse provides for the other after a divorce, these agreements can give couples peace of mind. Having worked together to resolve issues that might arise during their divorce, and protected themselves and their children in a divorce or the death of a spouse, couples can feel more relaxed and excited about entering their marriage. Speak with an experienced South Carolina divorce attorney at King Law Offices by calling (888) 748-5464 to schedule an appointment and discuss your premarital legal needs.
