Postnuptial Agreements In South Carolina
Most property and debt that a couple accumulates during their marriage is considered “marital property.” If a couple divorces, marital property is divided between the spouses by agreement or by the court. If the court decides how to divide marital property, it uses the principle of “equitable distribution.” It considers many factors in evaluating the facts of each case and attempting to determine a fair settlement for both parties.
Often, what the court believes to be fair may not align with either spouse’s preferences. Fortunately, South Carolina law allows spouses to enter into agreements exempting particular property from being considered “marital property.” Often, spouses execute these contracts before marriage (called “prenuptial” or “antenuptial” agreements). However, sometimes, couples may wish to enter into this kind of agreement after they are already married.
What Are Prenuptial Agreements and Postnuptial Agreements?
The primary purpose of both prenuptial and postnuptial agreements is to determine how a couple’s finances, assets, and real property will be divided and settled if they divorce. Such an agreement ensures that the specified assets and debts will be distributed, so both spouses think it is fair when they execute the contract.
South Carolina law requires an agreement addressing property status between a married couple to be written down and voluntarily executed by both spouses. Whether this agreement is signed before or after the couple marries, independent counsel must represent each party. Both parties must have made a full financial disclosure regarding their income, debts, and assets.
What Does a Postnuptial Agreement Cover?
Prenuptial and postnuptial agreements can address many financial issues. A couple can tailor their arrangement to meet their needs in their unique circumstance. Some of the issues that a prenuptial or postnuptial agreement can address include:
- Ownership of specific real or personal property (such as collectibles, art pieces, vehicles, burial plots, jewelry, and more).
- Rights to each spouse’s future earnings.
- Obligation for current or future debts.
- Allocation of income streams like dividends or insurance proceeds.
- Ownership and management of a business owned by one or both spouses.
- Entitlement to death or insurance benefits.
- Rights of each spouse to alimony after divorce (including waiving the right to receive alimony).
Neither a prenuptial nor postnuptial agreement can address issues related to child custody or child support, either for existing or future children.
Why Would a Couple Enter Into a Postnuptial Agreement?
Like prenuptial agreements, postnuptial agreements can protect each spouse’s rights to keep assets separate. They can also protect one spouse from taking on legal responsibility for the other spouse’s debt or financial obligations.
One of the most common reasons couples enter into postnuptial agreements is to modify existing prenuptial agreements. If one spouse has a significant shift in finances or life circumstances, the couple may find it necessary to modify the terms of the original prenuptial agreement. This could be due to a benefit or windfall, like an inheritance or career advancement, or due to a catastrophic event, like a debilitating injury or the development of a chronic illness.
Another reason to enter into a postnuptial agreement is if one spouse wants to start a business, either alone or with other individuals besides their spouse. An antenuptial agreement can protect the business’s assets or other investors from division in case of divorce.
Finally, some couples may enter into a postnuptial agreement as a condition for reconciling after marital difficulties. The agreement may set conditions on the spouses’ rights to alimony or direct the division of property in case of adultery or other undesirable behavior.
How Does a Couple Create an Enforceable Postnuptial Agreement?
South Carolina courts will generally uphold a postnuptial agreement if both parties execute it knowingly and voluntarily. Both parties must be represented and advised by independent legal counsel so they fully understand the agreement. A court may declare enforcement unconscionable and refuse to enforce the terms of an agreement if:
- One spouse executed the document involuntarily (under threat, coercion, or duress).
- A document is fraudulent.
- A spouse did not fully and accurately disclose their assets and liabilities.
- The facts and circumstances at the time of enforcement have changed, making it unfair or unreasonable to enforce the agreement.
Like a prenuptial agreement, a postnuptial agreement will remain in effect for the duration of the marriage. The parties may change or revoke it at any time, provided that the changes are in writing and signed by both spouses (and subject to the general prohibitions against coercion and fraud).
Consult With an Attorney About a Postnuptial Agreement
Both parties must have their own legal representation when negotiating and signing a postnuptial agreement. The experienced family lawyers at Indigo Family Law can help make sure the contract is drafted correctly and complies with all applicable laws, that it is enforceable and executed correctly, and that you and your spouse understand your rights and responsibilities.
Please fill out the form below or by giving us a call at 843-215-6100