Many people are familiar with agreements referred to under North Carolina law as “prenuptial” or “pre-marital” agreements and are equally familiar with separation agreements. These agreements are all utilized by couples who are either contemplating marriage or divorce and serve to set forth guidelines and restrictions related to the ownership and division of marital property under North Carolina’s domestic relations laws. However, there is a third type of agreement, called a post-marital agreement, which is a lesser known, but equally valuable resource provided for in North Carolina law.
Post-marital agreements are created by spouses after entering into marriage, and generally outline the ownership of financial assets in the event of a divorce. A post-marital agreement may also set out the responsibilities surrounding children or other obligations for the duration of the marriage. Post-marital agreements are often used to protect one spouse’s assets, often after a promotion, inheritance or receipt of a large financial gift. The agreement often sets forth the division of those assets in the event of divorce. Post-marital agreements may also be used to revise an earlier pre-nuptial agreement entered into before one spouse acquired assets discussed in the post-marital agreement.
On the other hand, post-marital agreements may also be used to protect one spouse’s rights to the marital assets when another spouse has incurred significant debt or financial instability. These agreements are similarly used when one spouse is moving away for a significant amount of time due to work or other obligations, or when one spouse becomes incarcerated. Finally, post-marital agreements may be utilized by parties who were contemplating separation, but have decided to reconcile. For example, a spouse in this situation may protect himself from a disloyal spouse by specifying obligations concerning the marital property, child support, etc. should a disloyal spouse continue to engage in infidelity.
While post-marital agreements can be wonderful resources to parties who desire to contract with one another without separating, there are some limits on post-marital agreements. For example, N.C.G.S. 52-10(a) prohibits post-marital agreements that would violate public policy, such as those that deal with alimony rights before parties separate. There are also various requirements to creation and execution of a valid post-marital agreement, and many defenses to enforcement of post-marital agreements if the agreements are not properly drafted, negotiated and executed. Those seeking to enter into a post-marital agreement should seek the advice of an attorney to enter into agreements that will sufficiently meet client needs and avoid the pitfalls of a potentially unenforceable agreement.