The Importance of a Premarital Agreement as Part of Your Second+ Marriage and Later Life Estate Planning

Introduction and Background

In New Jersey, a Premarital Agreement is also referred to as a Prenuptial Agreement and/or an Ante-Nuptial Agreement. A Premarital Agreement is a legal contract entered into by a couple before they get married or enter into a civil union. Its purpose is to govern (1) the division and distribution of assets, provide for spousal support, if any and other financial matters in the event of divorce, dissolution, or death.

Legal Requirement(s) for an Enforceable Premarital Agreement

I intend to discuss with you on this page the necessary legal requirements to enforceable Premarital Agreements in New Jersey. I also intend to alert you to commonly raised objections to the enforcement of a Premarital Agreement upon divorce, legal separation, death, or a change of heart.

Because of the high number of second marriages, I almost always recommend that clients enter into a Premarital Agreement.

To better ensure that a Premarital Agreement is enforceable in New Jersey, the following requirements must be met:

1. The Agreement must be voluntary meaning both parties enter into the Premarital Agreement freely, without any fraud, duress, pressure or undue influence. Additionally, each person should have (at a minimum) a general understanding of the Agreement’s terms and/or an opportunity to have someone explain the Agreement to him or her prior to signing.
2. The Premarital Agreement must be in writing and signed by both parties. It is advisable to have the Agreement witnessed and/or notarized as well.
3. Both parties should have independent legal representation: While not a legal requirement to the enforceability of the Agreement in New Jersey, it is highly recommended that both parties have independent legal counsel to explain (a) their rights, (b) meaning of the term(s) used in the document(s) and (c) have their questions answered prior and during the negotiation and execution of the Premarital Agreement.
4. Both parties must provide a complete and accurate disclosure of their respective assets, income and debts. Failure to provide full disclosure may render the Agreement unenforceable.

It is important to note that New Jersey law prohibits Premarital Agreements from including provisions regarding child custody, child support, or any other issue that would adversely affect the rights of minor children in the event of the death, divorce or legal separation of a parent.

What if a Person Has Already Married Without A Premarital Agreement; Is it Too Late?

If a person has already remarried, another option is to enter into what’s called a “postnuptial Agreement.” Such an agreement serves the same purpose as the Premarital Agreement” and requires the same level of compliance as a Premarital Agreement.

New Jersey Seeks to Define and Protect Individual Rights and Interests Within a Premarital Agreement

In New Jersey, Premarital Agreements are governed by the Uniform Premarital Agreement Act (UPAA). This act includes definitions and outlines for the enforceability, and protection of individual rights and interests within the language of the Premarital Agreement(s).

1. Definition of a Premarital Agreement (PMA)

A PMA is a contract entered into by a couple before their marriage or civil union. These Agreements generally discuss the rights and obligations of each party during the marriage but more importantly what happens in the event of a divorce, legal separation, or death.

2. Enforceability: In New Jersey, for a Premarital Agreement to be enforceable, it must meet specific requirements. These requirements include:
   1. The Agreement must be in writing, signed by both
   2. Both parties must provide a complete and reasonably accurate disclosure of their assets, debts, and income.
   3. While both parties have the opportunity to consult with independent legal counsel to voluntarily to waive his/her rights as set forth in the Agreement, a New Jersey Supreme Court decision in 2020 struck down a mandatory provision of the law that required legal consultation and advice. The Court ruled such a requirement as “unconstitutional”.
   4. The Agreement must not be unconscionable when it is executed or when enforcement is sought. I discuss in much greater detail the specific requirements of a legally enforceable Premarital Agreement later on in this page.
3. Protection of Individual Rights and Interests: The UPAA in New Jersey legally authorizes protections agreed upon by the individual who sign the Agreement especially as to their individual rights and interests. These protections include:
   1. Safeguarding personal and real property acquired by each party before or during the marriage.
   2. Defining the rights and obligations concerning the division of property, spousal support, and other financial matters in the event of divorce, separation or death.
   3. Preserving and memorializing each party’s expectations regarding the distribution of assets and financial responsibility for debts in the event of death or divorce.
   4. Establishing the terms, conditions and parameters for the payment, type, and amount of alimony support or spousal support.

There is one important provision of the law that should be discussed.  New Jersey Courts have refused to enforce the law authorizing specific provisions of a Premarital Agreement if they are found to be very unfair or against public policy.  The term used to describe “very unfair” is unconscionable. For example, if the Agreement waives a party’s right to child custody or child support for a biological or adopted minor child either or both provision(s) will not be upheld by the Court.  I intend to discuss this topic of unconscionability in the following paragraph.

Under New Jersey law, if a Premarital Agreement is unconscionable, meaning shockingly unfair or oppressive, the court may (will) refuse to enforce it. However, the unconscionability standard is quite high, and courts are generally hesitant to interfere in private contractual relationships between spouses. The mere imbalance of financial terms or provisions that seem unfair after a marriage ends do not automatically render an Agreement unconscionable. The court will consider factors such as each party’s financial circumstances at the time of execution, the presence of independent legal counsel, and whether there was full financial disclosure.

Overall, New Jersey’s laws aim to protect individual rights and interests within a Premarital Agreement by allowing a judge to refuse recognition and enforcement of an unfair agreement based upon public policy objections.

Common Objections to the Enforcement of Premarital Agreements

The enforcement of Premarital Agreements in New Jersey has been subject to considerable discussion and debate.  While the laws intent is to provide clarity and protection for individuals entering into marriage, there exist five basic objections to their enforcement.

Firstly, some argue that Premarital Agreements are inherently unfair as they are often drafted by the wealthier spouse, leaving the less affluent party at a disadvantage. Critics claim that such Agreements can create an imbalance of power caused by economic failures within the marriage and thereby perpetuate inequality.

Secondly, opponents argue that Premarital Agreements undermine the sanctity of marriage. They contend that these Agreements focus on the dissolution of marriage, rather than nurturing the relationship. By prioritizing financial concerns, Premarital Agreements may erode the trust and commitment necessary for a successful union.

Thirdly, there are concerns that Premarital Agreements can be exploited as tools for coercion or duress. These Agreements may be imposed on individuals under pressure, whether actual or perceived, compelling the person to sign an unfavorable agreement against their true wishes or interests.  To opponents this raises an objection to the validity and morality of such Agreements.

Fourthly, enforcing Premarital Agreements can impede the ability of the courts to ensure a fair division of marital assets in the event of divorce. Pre-existing Agreements may restrict the court’s authority to consider the evolving circumstances of each party to the Agreement and the best interests of both parties involved.

Lastly, opponents argue that enforcing Premarital Agreements can lead to societal fragmentation. By enforcing Agreements that limit spousal support or divide assets unequally, the financial stability of the dependent spouse may be compromised, resulting in increased societal burdens.

Common Reasons Offered in Support of the Enforcement of Premarital Agreements

The objections raised above summarize the primary argument of opponents to the enforcement of Premarital Agreements in New Jersey.  Proponents argue for the rights of individuals to freely reach their own Agreement when it comes to marriage by offering clarity and predictability. Critics of course, raise concerns about fairness, the sanctity of marriage, coercion, judicial limitations, and societal implications. The balance between individual autonomy and protecting the rights of both parties within the bounds of marriage remains a contentious issue and the subject of continued debate and examination.

Final Thoughts

It is important to note that while this webpage has offered you the general guidelines to the topic of Premarital Agreements, each case (your case) is unique, and a Court will consider the specific facts and circumstances surrounding the Agreement when determining its enforceability. If you need legal advice or further information regarding the recognition and enforcement of a Premarital Agreement in New Jersey, please consult with a qualified attorney at Hanlon Niemann & Wright.  We are available to assist a prospective spouse in the preparation or review of a Premarital Agreement.  Please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or e-mail him at fniemann@hnlawfirm.com today.  A mutually convenient date and time to meet in person or by ZOOM can be scheduled.  Mr. Niemann sincerely welcomes your inquiry.

 

Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Estate Planning Attorney by Way of a Premarital Agreement Attorney

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