Dear Cassie: What are the laws pertaining to prenuptial agreements in New Jersey?
Prenuptial agreements (also known as premarital agreements) are contracts between soon-to-be married couples which attempt to define the rights and obligations of both parties in the event of a future divorce. Those rights and obligations may be significantly different from what the laws in New Jersey would otherwise provide at the time of divorce.
For example, a prenuptial agreement could provide for a fixed, pre-determined sum of alimony to be paid from one party to another for each year of the marriage–as opposed to leaving it up to a Court to decide the proper amount and duration of alimony at the time of divorce. Or, a prenuptial agreement could provide that any account maintained in the single name of a party shall remain that party’s asset at the time of the divorce–whereas title of an account does not ordinarily necessarily control whether that asset is subject to equitable distribution, and an examination must be made as to the source of the funds in the account, and whether those funds were acquired during the marriage.
Whether a prenuptial agreement is enforceable is controlled by New Jersey statute. N.J.S.A. 37:2-38 provides that “a premarital or pre-civil union agreement shall not be enforceable if the party seeking to set aside the agreement proves, by clear and convincing evidence,” that:
- The party executed the agreement involuntarily; or
2) The agreement was unconscionable when it was executed because that party, before execution of the agreement:
(a) Was not provided full and fair disclosure of the earnings, property and financial obligations of the other party;
(b) Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided;
(c) Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party; or
(d) Did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.
In other words: a party is going to be bound by the terms of their prenuptial agreement unless: they were pressured or coerced to enter into the agreement; or they did not have a complete understanding of their soon-to-be spouses’ financials (or waive that right); or they did not consult with independent counsel (or waive that right). This is a very high burden to meet.
The bottom line: both parties should be extraordinarily cautious before entering into any prenuptial agreement. At a minimum, they should each have a complete understanding about what the terms of their agreement provide, and how those terms differ from what the laws would otherwise afford them.
If you are dealing with the issue of a prenuptial agreement or its enforceability, you should seek the advice of matrimonial counsel.
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Cassie Murphy is a divorce and family law Partner with the Law Offices of Paone, Zaleski & Murphy, with offices in Red Bank and Woodbridge.