Premarital agreements—also known as “prenuptial” or “antenuptial” agreements—are a legal contract signed by prospective spouses. These agreements govern the division of property and any spousal support obligations (alimony) in the event of divorce or death. The law governing premarital agreements vary widely from state to state. In South Carolina, premarital agreements are valid and enforceable provided certain conditions are met.
Defining “Marital Property”
South Carolina law presumes all property acquired during a marriage is “marital property.” In a divorce proceeding, a family court judge must divide all marital property “equitably,” taking into account a variety of factors. A premarital agreement can bypass this division, however, by excluding specified real and personal property from the pool of marital property.
To exclude marital property, state law says the premarital agreement must be in writing and voluntarily signed by both spouses. Each prospective spouse must be represented by his or her own attorney and each party must fully discloses all assets, debts and income at the time the agreement is signed.
Is the Agreement Free of Fraud or Duress?
The South Carolina Supreme Court has further instructed judges to look at three factors in determining whether or not to enforce a premarital agreement. First, “Was the agreement obtained through fraud, duress, or mistake, or through misrepresentation or nondisclosure of material facts?” For example, if one prospective spouse hides assets from the other—or even undervalues assets that are disclosed—the premarital agreement may be invalid. Likewise, if one party coerces or threatens the other into signing the agreement, the court may hold it unenforceable.
So does this mean one prospective spouse cannot say to the other, “Sign this agreement or I will not marry you”? The answer depends on the unique facts and circumstances. A judge is more likely to find duress or coercion of such a demand is made an hour before the wedding as opposed to several months prior.
Is the Agreement Unconscionable?
The second test the courts will apply is whether or not the terms of the premarital agreement are “unconscionable.” This means the agreement itself is so one-sided and contains language so “oppressive” that no person in good conscious would ever sign it. As suggested above, one way an agreement may be unconscionable is if only one prospective spouse has an attorney. This indicates unequal bargaining power. An agreement may also be unconscionable if one spouse receives everything and the other nothing.
Have the Circumstances Changed?
Obviously, a premarital agreement may be signed years, even decades, before its provisions may need to be enforced. The Supreme Court’s final factor is therefore to consider whether an agreement that may have been initially valid is now unenforceable due to changes in the “facts and circumstances” surrounding the spouses. For example, let’s say a premarital agreement provides the husband shall not owe any spousal support to the wife in the event of divorce. But years later when they do divorce, the wife is suffering from a serious health condition and requires support. The family court could hold the “no spousal support” agreement is no longer valid given the wife’s changed circumstances.