Overview of Premarital Agreements


Most of this website is about divorces, and finding a Happily EVEN After.

But when I work with prenuptial agreement clients, I get to work with those envisioning a Happily EVER After.

I often negotiate prenuptial agreements for couples contemplating marriage but looking to set specific parameters in the event of divorce or the passing of one of the parties. I always refer to prenuptial (also known as a premarital agreement or antenuptial agreements) as perhaps the most-tricky document to negotiate in the realm of family and divorce law–as certain objectives are sought in the negotiation–but negotiating too much can upset an otherwise happy couple. 

Should You Ask for a Prenuptial Agreement? 

Although prenuptial agreements are more common in second or subsequent marriages (and/or where one or both parties have accumulated substantial wealth), prenuptial agreements are becoming increasingly common among all age groups and asset classes. It is particularly important to consider prenuptial agreements when one or both parties are business owners

That said, there is often one party that is the driver of the prenuptial agreement. Sometimes, that party isn’t even the one getting married. (I’ve noticed over the years many parents are actually the driving force behind their son or daughter’s premarital agreement).  

With all that said, what should you do if you’re engaged and your spouse asks you to enter into a prenuptial agreement? Or if you’re looking to remarry, should you demand a prenuptial agreement the second time around?

First we must define what is the purpose of a prenuptial agreement?  Indeed, what is a Prenuptial Agreement? 

To first answer that question, it’s perhaps important to better understand what a prenuptial agreement is and isn’t.  Prenuptial agreements are a form of contract setting forth an understanding between the parties about their marriage and the end of their marriage. It is required that this agreement be made prior to the marriage (although reconciliation and postnuptial agreements are sometimes contemplated by New Jersey law). 

A prenuptial agreement only becomes enforceable upon the parties actually marrying.  Such agreements can be quite simple or very complex. As a form of contract, the parties are given great leeway in drafting the agreement’s specific terms and language. 

To be valid a New Jersey Prenuptial Agreement must be in writing or it will not be enforceable.  They must also have a “statement of assets” annexed/attached to the Agreement.  Like most contracts, “consideration” must be given, and the Agreement must also be signed by both parties so as to be legally binding. Both parties must be represented by independent legal counsel. 

Under the Uniform Premarital Agreement Act, the parties may contract respecting some of the following types of issues:

  • Rights and obligations relating to real property and the disposition of such property;
  • Choice of Law for a separation/divorce/etc.;
  • Spousal support/alimony;
  • BUT NOTE: prenuptial agreements cannot waive a child’s right to support from either parent and cannot address custody or parenting time issues. 
  • To be enforceable a prenuptial agreement cannot be unconscionable (as judged at the time the agreement is entered into and not at the time it is sought to be enforced–as modified by 2013 bill signed by Governor Christie).
  • The agreement cannot be made under duress. 
  •  Also, it should generally be made with sufficient time to review and negotiate and both parties should have independent counsel. 
  • It should also be noted that the burden of revoking or amending a prenuptial agreement (absent consent) inures to the party that is seeking to invalidate the agreement. 
  • Finally, it should be noted that certain protections are in place in New Jersey even absent entry into a prenuptial agreement. For instance, non-commingled pre-marital property generally remains separate property in New Jersey.  So if you own a home in your name and do not commingle that asset (or allow your new spouse to provide labor, equity, or significant seat-equity into the home), then that house should generally remain separate regarding equitable distribution at the time your separate or divorce. Likewise, inherited property or gifted property (along with portions of most personal injury awards will remain separate property provided they are not commingled. 

Should I Agree to Sign a Prenuptial Agreement?

Now that the basic framework of a New Jersey prenuptial agreement is understood, onto the primary question: what should you do if your spouse seeks a prenuptial agreement? 

Firstly, it’s important to not take the suggestion of a prenuptial agreement personally or as an indictment of your relationship or your fiancée’s trust in you. There are many reasons to seek a prenuptial agreement, and not all of them are negative.

As noted above, it’s a growing trend and helps provide some control to both parties to determine what would occur in a worst-case scenario outcome. For risk-adverse people (and with divorce rates still somewhat high), this may simply be a reasonable request).

If you are concerned, you should discuss your concerns with your fiancée and get a sense of their motivations. It may be that it is not necessary to pursue a prenuptial agreement.  If they persist, make sure you both have an understanding of the process to be utilized and the reasons behind the request so as to not strain the relationship.

If your spouse does insist on negotiating a prenuptial agreement, it’s important that you select your own independent counsel to review the agreement and to help you negotiate it, as necessary. Do not allow your spouse or their attorney to select your attorney for you. It may seem ok now but will only lead you to feel cheated and upset by the process later on at the time of enforcement (even if everyone is operating in good faith). 

Make sure your attorney fully explains the process to you along with the specific repercussions of what you are signing.  You should have a solid understanding of what the law would be absent a prenuptial agreement versus the language contemplated, so you can understand what you are gaining (or losing) by entering into the agreement versus the natural status of the law.  For instance, alimony is available to many parties to a divorce in New Jersey. In general terms, the greater the disparity in income between the parties coupled with the longer the duration of the marriage, the more a party may have alimony exposure to the other. 

A prenuptial agreement may call for a permanent waiver of alimony. In such a situation it’s important to recognize what your expected exposure (or benefit) from alimony may be. It may be difficult or impossible to fully understand (as you are negotiating in the present an unknown future), but it’s important that you view the more realistic potentialities and have an understanding of what you will be giving up (or gaining) by that specific language. 

You should review the entire contract through that prism and then view it globally to determine if it is reasonable and fair.  To be enforceable, there is no requirement that the agreement be fair, just that it not be so unfair as to be “unconscionable” at the time the agreement is entered into. 

You should work with your attorney to provide financial documentation (and to review financial documentation from your spouse) as this is a requirement of a prenuptial agreement and will help you determine whether or not proposed prenuptial agreement language is fair. 

You should also not be afraid to voice your concerns to your lawyer and to negotiate the prenup (even aggressively if so required).  If your fiancée is the one seeking a prenuptial agreement then their feelings should not be hurt if you are seeking to negotiate an agreement that is fair to both of you.

Your fiancée is looking to protect their interests, or they wouldn’t be asking you to sign a prenuptial agreement. Likewise, you should take this opportunity to ensure that your interests are being protected.  You will only regret it later on if you let the bliss of upcoming nuptials silence valid concerns.  By that point in time it will be too late to wish the agreement away, as it will likely be binding. 

As with most legal documents, you should not sign anything or waive any rights (such as a right to independent legal counsel) without first meeting with your own attorney and having your attorney review the agreement and advise you regarding its pros, cons, and legal meanings. 

If you’re contemplating marriage or remarriage, then you should consider your circumstances and that of your significant other to determine if it is worth the time and expense of negotiating a prenuptial agreement. I have heard too many clients say they wish they had gotten one before they got married to not believe in prenups as an important tool for anyone contemplating marriage.

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