A Guide to Prenuptial Agreements in South Carolina

What is a Prenup?

What is a prenuptial agreement?
A prenuptial or premarital agreement is defined in South Carolina law as an agreement between prospective spouses made in contemplation of marriage that is effective only upon marriage. Such agreements, which are commonly referred to as a prenup, can be used to decide a whole host of issues – from what to do with a house or other real estate to how much alimony a future spouse may receive in the event of divorce or when one spouse dies . In South Carolina, the ability of spouses to contract about these and other topics is set forth in the South Carolina Uniform Premarital Agreement Act (the "Act"). The law applies to agreements signed after July 1, 1991. While these agreements are most often utilized by wealthy individuals, who may be concerned about both property and possible maintenance payments in a divorce, anyone considering a second or subsequent marriage may benefit from having one in place. Before entering into a prenup, you should consult with an attorney to determine if one would be appropriate in your particular situation.

Legal Guidelines in South Carolina

In South Carolina, prenuptial agreements must be executed voluntarily, with full and fair disclosure, and in a manner that is not inequitable at the time of signing. It is critical to follow the statutory requirements of the agreement to minimize the risk for your agreement to be set aside at a later date.
In determining whether an agreement is enforceable, the South Carolina Supreme Court has laid out a Rule of Thirteen. In order for the agreement to be valid and enforceable, all of the following must be true:

(1) The agreement is executed voluntarily;
(2) The parties were given full and fair disclosure;
(3) The agreement is contractual in nature as opposed to being in contemplation of divorce;
(4) The agreement is entered into no less than one (1) day prior to marriage;
(5) The parties waived the right given by S.C. Code Ann. § 20-7-472 to the issuance of a certificate of inquiry from the probate court;
(6) The agreement contains a statement of assets and debts or the parties expressly waive the same and acknowledge the understanding of the rights it confers;
(7) There is an adequate remedy at law;
(8) The agreement is conscionable at the time of execution and becomes unconscionable at the time enforcement is sought;
(9) The agreement promotes the public policy of the state;
(10) The agreement was entered into upon a fair exchange of consideration;
(11) The agreement is unconscionable at the time of execution; and
(12) The parties have access to counsel.

Advantages of a Prenup

A prenuptial agreement can prove to be extremely advantageous for you and your spouse. The protections that a prenup provides are invaluable. Since every couple’s situation differs, the benefits of having a prenup are not universal, but there are similarities in the advantages most people find.
Generally speaking, a prenup gives you control over all of your property—what is and what is not considered marital property. If you and your future spouse own property already, there can be disputes over what should be considered marital property and what should not be. This could lead to drawn-out litigation during a divorce. But if you enter into a prenup before being married, then you are able to plan for potential property issues. Often, these issues are filed away and easily accessible when the time comes for a divorce. Examples of clarifications typical of a prenup include taking debt collected before the marriage or designated inheritances out of consideration as marital property. Having control over your property before entering into marriage helps to keep your financial matters private. Most divorce records are public, which means that any matters incorporated in the divorce may be open to the general public. Evidence that you collect during a divorce proceeding is up for contention, while any property that you have already passed over to your future spouse is not. Your prenuptial agreement can keep any sensitive financial matters private.

Things to Consider

Even though a prenuptial agreement is presumed to be valid if all the statutory requirements are met, there are certain limitations applicable to these agreements. First, the agreement itself must be conscionable, not unconscionable. If a court finds the agreement to be unconscionable, it can and will be rendered invalid.

Consent obtained by fraud or coercion
Falsely represented amount of property or financial obligations of a party
Inadequate or no disclosure of assets
Failure to sign the agreement until marriage
One party not given the opportunity to seek independent legal advice
Fraudulent nondisclosure/incomplete disclosure of value or amount of some or all property
Delay in asking for approval of agreement until after the marriage
Inclusion of vague or ambiguous terms
Absence of consideration or inadequate consideration
The nature of the circumstances surrounding the making of the contract was misleading.

The legal doctrine of unconscionability of contracts may apply absent a prenuptial agreement if a party can show that the contract at issue (marriage or separation agreement) is conspicuously one-sided or manifestly unfair . In South Carolina, the following considerations are made in deciding whether or not a premarital agreement is conscionable:

Amount of time between the communication of the agreement and the date of the marriage
Age, education, employment, health, and financial circumstances of both parties
Amount of sophistication of the parties
Opportunity to consult with counsel, prior to the execution of the agreement
The state of the parties’ relationship when the agreement was made and executed.

Parties are free to contract against the support of a spouse. Therefore, some of the more common items negotiated in prenuptial provisions are the following, but not limited to: What is important to remember is that the parties have a wide latitude to negotiate and draft terms to fulfill their intentions. However, just as the parties may also limit the rights and responsibilities of a third-party creditor. These agreements also can provide for intra-spousal dispositions, by way of contracts, trusts, wills or otherwise and may modify existing spousal rights. The threshold question is whether the agreement itself is conscionable.

How to Successfully Prepare a Prenup

Steps to Create a Prenuptial Agreement in South Carolina
The very first step in successfully negotiating a prenuptial agreement is to obtain legal advice. Even in the most amicable circumstances, most lawyers will not draft a prenuptial agreement to be signed before they have met with the other spouse to explain to them their right to be represented by an attorney. The lawyer for the person who initiates the drafting will probably want to go as far as to sit down with the "initiating" client and his fiancée and suggest to the fiancée the right to be represented, and suggest or warn that the fiancée have her own attorney. At least one court held that negotiation of a prenup was not done in good faith by the wife when in the very first meeting, she walked out of the room and never came back for further negotiation. The next step in the process would be that the parties would meet with their (separate) lawyers, and exchange financial information. Some people do not want to reveal all of their financial information to their future spouse. This should be addressed when the contract is entered. To protect that information from disclosure, it could be stated that it shall not be disclosed to any third party, but not that it shall not be disclosed to the future spouse. It is well worth the effort to specifically state when the agreement would not apply. These include: The parties will want to make sure they agree as to the following: The drafting lawyer will want to ask that the client proofread the document carefully, after the client has had the chance to review it with the lawyer, and before the document is signed. It will be important to state when the contract will be effective. If you decide to have the contract signed on the eve of the wedding, perhaps a month or two later would be a good time for it to become legally binding. The above is intended to be helpful. Yet the list is not exhaustive. Therefore, only a lawyer should draft a premarital agreement.

Common Myths

Prenuptial Agreements are only for wealthy people: This alone has been proven to be false, as individuals of any income range can benefit from a prenup for themselves and their children. Where a husband or a wife believes that they will not receive a fair resolution in the event of a divorce proceeding, a prenup can be a very valuable tool from the start.
A prenup will "doom" a marriage prior to its beginning: Some married couples believe that to enter into a prenup before marriage is to guarantee a divorce in the first few years of marriage, however this is certainly not true. To the contrary, the sides for and against having a prenup are many. If neither a prenup nor a Marriage Settlement Agreement are completed when a divorce case is finalized, it can take years and thousands of dollars in attorney’s fees to finally reach a settlement . A prenup can help to facilitate the process if an agreement between the parties cannot be reached early in the process.
Prenups are only for over-educated and over-analyzed nuptials: Certainly, some sophisticated individuals have prenups prior to marriage. However, ordinary people who love and care about one another utilize prenups all the time. If a spouse has an interest in an asset that was acquired prior to the marriage, and seeks to protect that asset, carrying an inheritance into the marriage in a prenup may or may not be honored by a court at the time of separation or divorce.
Prenups can’t be changed after marriage: Wrong! There is such thing as a postnuptial agreement. Generally, a postnuptial agreement will address issues that were not addressed in a previous prenup. It’s not a bad idea to remain open-minded in case a situation arises during a marriage that has not previously been negotiated between the couple.