What is a prenup in SC?
A "prenup" is a prenuptial agreement - an agreement that you enter into before marriage that will control what happens to your finances (and sometimes other things) if your marriage ends.
Whether you are the bride or the groom, your friends, family, and advisors may have plenty to say to you about prenups. You need one. You don't need one. You must protect yourself. After receiving ten different bits of advice from ten different people, you may be as confused as you were when it began.
What's the truth about prenups? Do you need one or not?
The answer depends on your situation - your finances, your future finances, and the financial situation of your future spouse. If you are about to tie the knot, you are probably seeing the world through rose-colored glasses right now and you don't want to do anything that would make your fiancée feel like you don't trust them...
Which is why you need to consult with a Myrtle Beach prenup lawyer as soon as possible - to determine whether a prenup is right for you and, if so, to do everything possible to protect your finances as you enter this new, happy stage of life.
Is a Prenup in SC Enforceable?
Prenups in SC are enforceable if they are fair. The SC Supreme Court adopted a three-factor test to determine whether a prenup in SC is enforceable in Hardee v. Hardee, 355 S.C. 382, 389-90, 585 S.E.2d 501, 504 (2003):
(1) Was the agreement obtained through fraud, duress, or mistake, or through misrepresentation or nondisclosure of material facts?
(2) Is the agreement unconscionable?
(3) Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?
In 2014, in Hudson v. Hudson, the SC Court of Appeals found that a prenup was not unconscionable and was enforceable where:
- Husband and wife each relinquished any right to property owned before the marriage or acquired during the marriage;
- Each relinquished any right to alimony if the marriage should end;
- The property referenced in the agreement included a lifeguard business and a flea market;
- Husband was a former attorney;
- Husband referred the wife to another attorney who was a friend of the husband although the wife wanted to use a different attorney; and
- The agreement was presented to the wife only two weeks before the wedding, at a time when she had already sold her vehicle and quit her job.
The Court found that the agreement was not unconscionable as to the equitable division of property because "the Agreement's terms were not so one-sided or oppressive that no reasonable person would make them and no fair and honest person would accept them."
The Court also found that "the high pressure exerted on her due to the impending wedding and the parties' unequal bargaining power" did not make the agreement unconscionable, and there was no change in circumstances since they entered the agreement that would make the agreement unfair.
The Hudson case illustrates why you need to consult an attorney that you trust before you enter into a prenup in SC - the wife clearly did not feel that the agreement was fair or that she was treated fairly, but the appellate courts disagreed and enforced the agreement anyway.
What Issues Can Be Covered by a Prenup in SC?
SC allows you to put some things into a prenup that you may not be able to include in other states - alimony payments, for example.
The issues that can be covered by a prenup in SC are broad and there is no definitive list. Some common examples, howeve0r, include:
- The disposition of assets that you and your spouse owned before entering into the marriage;
- The disposition of assets that you or your spouse acquire during the marriage;
- Who will be responsible for paying debts that were acquired before the marriage;
- Who will pay attorney fees in the event of a divorce;
- Whether the growth of premarital assets or businesses will be considered nonmarital property; or
- Any agreement as to money or finances based on the couple's unique circumstances.
What Issues Cannot Be Covered by a Prenup in SC?
There are some issues that cannot be covered by a prenup in SC, including:
- Child support or child custody - the family court will make a decision about child support and child custody that is in the best interest of the child, and this cannot be dictated by the terms of the parent's prenuptial agreement;
- A prenup cannot contain any agreement that would be illegal or against the public policy of the state of SC; and
- A prenuptial agreement is not enforceable unless the couple gets married - it will not apply if the couple decides to just live together without tying the knot.
What is the Uniform Premarital Agreement Act?
Unlike some other states, SC has not adopted the "Uniform Premarital Agreement Act," although the legislature has considered it.
The UPAA would create a set of guidelines for courts to follow, limiting what can be included in a prenup in SC and when the agreements are enforceable.
The UPAA would allow a prenup to include:
(1) 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;
(2) 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;
(3) the disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of another event;
(4) the modification or elimination of spousal support;
(5) the making of a will, trust, or other arrangement to carry out the provisions of the agreement;
(6) the ownership rights in and disposition of the death benefit from a life insurance policy;
(7) the choice of law governing the construction of the agreement; and
(8) another matter, including their personal rights and obligations, not in violation of public policy or law imposing a criminal penalty.
The UPAA would make prenups unenforceable when:
(1) the party did not execute the agreement voluntarily; or
(2) 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 or financial 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.
It would also give courts the discretion to order spousal support, regardless of the couple's prenup agreement, when a denial of alimony would require one spouse to become eligible for public assistance.
If you are getting ready to tie the knot, whether you want to protect your assets or you have been presented with a prenup by your future spouse, talk to your Myrtle Beach prenup attorney on the Axelrod team as soon as possible.