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New Jersey Prenuptial Agreements
What is a prenuptial agreement?

A prenuptial agreement is also known as premarital agreement or an antenuptial agreement. This type of agreement may be used by a couple to determine, prior to marriage, what each party's rights and obligations will be in the event of divorce. Premarital agreements are governed by the Uniform Premarital Agreement Act, N.J.S.A. 37:2-31 et seq. The agreement must be in writing and it must have a statement of assets attached to it. It becomes effective upon the marriage of the parties.

Premarital agreements are entered into by prospective husbands and wives before they get married. If a premarital agreement is properly drafted, then they can save the parties significant emotional and financial expense if they get divorced.

What marital terms can be negotiated in a premarital agreement?

The parties to a premarital agreement may negotiate about the following areas:

  • 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;
  • The rights 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;
  • The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
  • The modification of elimination of spousal support;
  • The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
  • The ownership rights in and disposition of the death benefit from a life insurance policy;
  • The choice of law governing the construction of the agreement; and
  • Any other matter, including their personal rights and obligations, not in violation of public policy.

However, a premarital agreement cannot predetermine issues relating to children including child support, custody or parenting time.

What martial terms can't be included in a premarital agreement?

A premarital agreement cannot limit any child support or any other types of financial support for a child. This includes costs to maintain health insurance or life insurance. Moreover, a premarital agreement can't stipulate which party should have custody of any child born of the marriage.

Child support provisions are governed by different rules that take into account a child's needs and best interests and the state's concern as to the welfare of children. Waivers of child support are invalid. Agreements as to child custody and visitation will not be upheld because as the welfare of the child born after marriage will override.

What is the standard of law that a court uses to ascertain if a prenuptial agreement is legally binding?

As to enforcement of premarital agreements, there is a three-pronged test that must be addressed by a court if the agreement is challenged:

  • Was the agreement entered into voluntarily;
  • Did the parties have the opportunity to have the agreement reviewed by counsel of his/her own choosing; and
  • Was there full disclosure as all assets, liabilities and income?

If these three prongs can be proven, then the burden to set aside the agreement shifts to the other side (with a higher burden of proof) and the primary focus will be on whether the agreement was "unconscionable" at time of enforcement, which shall be determined by the court as a matter of law.

What are the reasons why a prenuptial agreement may be declared invalid?

  • Unconscionability. A premarital agreement must be fair and reasonable. A premarital agreement can't cause financial hardship to the other party. Unconscionable contracts are often found to be invalid in the courts. The concept of unconscionability is often used the family court arena as well.
  • Both Parties Don't Have Independent Counsel. Each party must have their own lawyer. Many people mistakenly believe that they can have one lawyer represent both of them. Lawyers are expensive, and no one can blame the public for wanting to save on legal costs. However, each party must have their own legal counsel. A lawyer must make it clear to the unrepresented party that he or she does not represent him/her, and further advise them to obtain their own lawyer. All steps should be taken to insure that any premarital agreement is "air tight" and can't be challenged one day if the marriage turns out to be a disaster.
  • The Premarital Has Incomplete Information. There must be full disclosure when negotiating a premarital agreement. Quite often a person will try to hide some assets when he or she negotiates a premarital agreement. This can be a tragic mistake. If a person does not make full disclosure during the negotiation of a premarital agreement, then this can eventually be strong grounds to void premarital agreement.
  • The Premarital Agreement Has False Information. A premarital agreement can't be based on false and misleading financial information. A person must make full disclosure during the negotiations of a premarital agreement. There are many risks to getting married. However, if a person wants to increase the odds that a premarital agreement can withstand any legal challenges, then he or she must insure that they were completely honest in their dealings.
  • Invalid Provisions. A premarital agreement can't limit child support or any other child support related areas. If a premarital agreement contains clauses that try to limit child support or child support related areas, then that specific clause will be invalidated. If a divorced spouse has signed a very oppressive premarital agreement, then he or she will try to use this illegal clause to invalidate the entire agreement. However, in most cases, the court will only strike the illegal clause, and enforce the remainder of the premarital agreement, provided that it is fair and equitable.
  • There Must Be Reasonable Time For Consideration. The prospective spouse who is entering into a premarital agreement must have a reasonable amount of time to adequately review it. It would not be wise to give a prenup to your prospective bride or husband the day before the wedding. These agreements must be thoroughly reviewed and considered.
  • There Must Not Be Undue Pressure. Premarital agreements are often challenged once the parties get divorced. One of the most popular challenges to a premarital agreement is that a person will allege that they were pressured by their spouse, the lawyer, or the in-laws to sign the prenup. I would suggest that the execution of a prenup should be videotaped. If there is a significant amount of "money on the line" then a videotape can really save the agreement. Obviously, these formalities may take out some of the romance out of the wedding. However, let's face it, life is not romantic. It is always my credo to be overly cautious in life. The divorce courts are packed! A premarital agreement may enable many people to sleep a little better at night.
  • No Written Agreement. All premarital agreements must be in writing. An oral premarital agreement is not enforceable. Don't be cheap, hire a lawyer, and put your agreement in writing. Don't be misled to believe that all lawyers are expensive. Don't hire the first lawyer who tells you he charges $200 per hour. If you have a "war chest" of assets, then it may be wise to hire a top echelon family lawyer in your county. However, most cases are no so complicated, and many lawyers will charge you a much more reasonable fee.

What are the essential requirements that must be satisfied in order for a premarital agreement to be upheld?

  • There must be full and fair disclosure of the earnings, property and financial obligations of the parties. A complete and comprehensive financial statement must be annexed to the agreement that sets forth the part's earnings, property and financial obligations. A CIS should also be attached to the agreement.
  • Both parties should be represented by attorneys. In all probability, a premarital agreement will not be enforceable if the other party did not consult with an attorney, or did not waive the right to do so in writing.
  • The agreement must not be unconscionable. A premarital agreement is defined as an agreement that would leave a spouse as a public charge or close to it. N.J.S.A. 37:2-32 defines a premarital agreement as unconscionable if certain circumstance should arise. These situations are as follows:
    • When a spouse is rendered without a means of reasonable support.
    • When a spouse becomes a public charge.
    • When a spouse is provided a standard of living far below that which was enjoyed before the marriage.

When should a premarital agreement be signed?

It is critically important that all parties have adequate time to review and sign a premarital agreement. A period of six to eight weeks should provide the parties with enough time to negotiate an agreement and allow everyone to reflect upon its terms at their leisure, without feeling undue pressure. It simply does not make sense to try to put together a premarital agreement on short notice and hope that if is ever challenged that it will survive.

White six to eight weeks would be optimum, this does not mean to suggest that an attorney cannot successfully complete a premarital agreement in less time. If there is a short period of time for the preparation and negotiation of the agreement, it would not be unreasonable to state in the body of the agreement that the parties recognize that they have come to an understanding within a limited period of time, and feel that the time frame did not in anyway affect their ability to freely and voluntarily entered into the agreement or cause them to do so under any coercion, duress or undue pressure.

Can a premarital agreement be signed after the wedding?

A premarital agreement can be made after the wedding whenever differences arise between the parties regarding the future financial issues. This type of agreement is often called a postnuptial agreement. A postnuptial agreement must be based upon some consideration other than the marriage itself. Sometimes a postnuptial is made as part of a reconciliation of the parties or following some other dispute. A postnuptial has been held to be just as enforceable as a premarital Agreement.


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