New Jersey Prenuptial Agreements & Postnuptial Agreements
A divorce or dissolution of a civil union is one of the most difficult things you can go through in your lifetime. A long, contentious battle in New Jersey Family Court can turn your life upside down and leave you emotionally, psychologically and financially devastated. The fewer issues you have to fight over, the better. While the subject of prenuptial agreements and postnuptial agreements can be taboo and viewed as less than romantic, a properly drafted agreement setting out how assets will be distributed in the event of divorce, dissolution, or death, and the discussions that go along with its creation, can help ensure the financial well-being of a marriage or civil union. A prenuptial or postnuptial agreement drafted by an experienced, knowledgeable New Jersey divorce attorney will in fact alleviate your stress and make you feel less vulnerable. What’s more romantic than a marriage or civil union based on honesty, confidence and security?
Prenuptial Agreements
A prenuptial agreement, also known as an ante nuptial agreement, premarital agreement or “prenup”, is a contract entered into by future spouses or same-sex partners prior to their marriage or civil union. Though the content of prenuptial agreements can vary greatly, a New Jersey prenuptial agreement is meant to clarify the rights and obligations of each party in the event of a divorce or dissolution, or the death of either party. A premarital agreement typically includes provisions for division of property and alimony.
Properly drafted prenuptial agreements will be upheld by the New Jersey court. Poorly or improperly created New Jersey premarital agreements may not be enforceable, resulting in lengthy and costly litigation. The New Jersey prenuptial agreement lawyer Richard C. Klein handles a wide array of premarital agreements, from the simplest of agreements for second marriages to the highly complex prenuptial agreements for wealthy business owners.
Conveniently located in Cherry Hill, Camden County, Richard C. Klein practices throughout South Jersey – including Burlington, Gloucester, Salem, and Ocean, Cumberland, Atlantic and Cape May Counties. He represents clients from Mt. Laurel, Marlton, Moorestown, Medford, Haddonfield, Haddon Heights, Burlington, Voorhees, Cinnaminson and countless other South Jersey cities. His firm’s recent merger with the renowned firm of Becker Meisel, LLC, with Mr. Klein sitting as Chair of the firm’s Family Law Department, allows him to now share his experience and expertise with clients throughout New Jersey, including Mercer, Hunterdon, Salem, Monmouth, Atlantic, Salem, Ocean, Gloucester and Cape May counties.
Benefits of a Prenuptial Agreement or Premarital Agreement
If you are planning a wedding or civil union, contact the law offices of Richard C. Klein to discuss the benefits of executing a prenuptial agreement prior to taking your vows. You should consider a prenuptial agreement in a variety of situations:
- Second marriages: A prenuptial agreement can direct that children from a previous marriage or relationship receive a share of an individual’s estate.
- Marrying later in life: A prenuptial agreement can protect the assets accumulated prior to marriage or a civil union.
- Closely held corporation or family business: A prenuptial agreement can prevent a small or closely held business from being split up or controlled by an estranged spouse or same sex partner.
- One party has significant assets or considerably more than the other: A prenup can specify that premarital property will be kept separate, and in the case of divorce or dissolution, each spouse or same-sex partner can keep any property and investments individually owned prior to the marriage or civil union.
- One spouse has significant debt: A premarital agreement will protect a spouse from credit card debt or business liabilities incurred by the other prior to the marriage or civil union or accumulated during the marriage or civil union.
- One spouse or same-sex partner gives up a lucrative career: A prenuptial agreement can compensate a spouse or partner if the marriage fails.
- Any marriage or civil union: A prenuptial agreement can protect the assets that either party has accumulated prior to the marriage or civil union.
Uniform Premarital and Pre-Civil Union Agreement Act (UPAA)
Prenuptial agreements are governed by statute in New Jersey. The Uniform Premarital and Pre-Civil Union Agreement (UPAA), N.J.S.A. 37:2-31 to 37:2-41, was adopted in 1998. The UPAA provides that all premarital agreements be in writing, signed by both parties, with a statement of assets attached. It becomes effective upon their marriage or civil union. After the marriage or civil union of the parties, the prenup may be amended or revoked only by a written agreement signed by the parties.
What May be Included in a Prenuptial Agreement
Divorce attorney Richard C. Klein is well-versed in the intricacies of a properly drafted prenuptial agreement. He has 30+ years experience as a New Jersey family law attorney and knows what issues come to play in divorce court. That knowledge means he knows what issues should be addressed in a premarital agreement. The Uniform Premarital and Pre-Civil Union Agreement Act, however, does somewhat limit those issues that can be incorporated in a prenup. Under the UPAA, New Jersey prenuptial agreements may address:
- 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 right 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, divorce, dissolution, death, or the occurrence or nonoccurrence of any other event;
- The modification or 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 benefits from life insurance policies;
- The choice of law governing the construction of the agreement; and
- Any other matter, including the parties’ personal rights and obligations, not in violation of public policy.
New Jersey prenuptial agreements are not permitted to predetermine issues relating to children including child support, child custody or parenting time and visitation. Because the Child Support Guidelines used by the court to calculate child support awards take into account a child’s needs and best interests, a premarital agreement cannot limit child support or any other type of financial support for a child, including costs for health or life insurance. In the same way, premarital agreements about child custody and visitation do not take into account the best interests of the child at the time of the subsequent divorce or dissolution and, therefore, these issues are not properly included in a prenuptial agreement.
Enforcing a Prenuptial Agreement
When a party challenges the validity of a prenuptial agreement, the agreement will not be enforced if the evidence shows that:
a) the challenging party entered into the agreement involuntarily;
b) the challenging party did not have the opportunity to have the agreement reviewed by an attorney of his/her choice; or
c) the non-challenging party failed to disclose all of his/her assets, liabilities and income. (A complete and comprehensive financial statement must be annexed to the agreement that sets forth the parties’ earnings, property, and financial obligations.)
If the challenging the party fails to prove that at least one of the above inadequacies occurred with regard to the premarital agreement, the only way that the court will refuse to enforce a New Jersey prenuptial agreement is if the challenging party can prove that it is now “unconscionable” to enforce it. A prenuptial agreement will be found to be unconscionable if:
1) the challenging party is rendered without a means of reasonable support;
2) the challenging party becomes a public charge; or
3) the challenging party’s standard of living is far below that enjoyed before the marriage.
The divorce lawyers of Richard C. Klein, ESQ., take challenges to a prenuptial agreement seriously, no matter which party they represent. If you find yourself facing a divorce or dissolution and dealing with a prenup that you feel should or should not be enforced, contact our offices to speak with a knowledgeable New Jersey prenuptial agreement attorney to discuss your position.
Postnuptial Agreements
A postnuptial agreement is a contract between spouses or same-sex partners signed during their marriage or civil union. As with prenuptial agreements, one or both of the parties usually is seeking to protect assets or income in the event of divorce or death. While a premarital agreement is made between unmarried parties in contemplation of their impending marriage, spouses enter into a postnuptial agreement in contemplation of the continuation of their marriage.
Benefits of a Postnuptial Agreement
A postnuptial agreement is usually made when the parties have experienced significant financial changes during the marriage, as part of reconciliation after marital conflict, or when one party to agreement has entered a partnership with a third-party who does not want the partnership’s control or ownership affected by death or divorce. In fact, there are many reasons to consider a postnuptial agreement. Some examples are:
- one or both spouses or same-sex partners are worried that their marriage or civil union may end in divorce or dissolution and want protection or intend to limit specific provisions in a divorce/dissolution agreement;
- a party may want to provide for children from a previous marriage or relationship;
- the couple may have intended to enter into a prenuptial agreement but failed to do so, or want to change the terms of an existing prenuptial agreement;
- one or both of the spouses’ or partners’ financial circumstances have changed as a result of inheritance, start of a business, sale of a business, etc.;
- the couple wants to specify the equitable distribution of their assets rather than being subjected to the state divorce laws; or
- the parties hope to resolve underlying financial and communication issues that are causing undue stress in your marriage or civil union.
Postnuptial agreements are becoming more and more common. If you believe that a postnuptial contract with your spouse or partner might solve some issues or conflicts affecting your marriage or civil union, contact family law attorney Richard C. Klein to discuss the matter and to determine if it will be beneficial in your situation.
Enforceability of Postnuptial Agreements
Because a premarital agreement is entered into before marriage or a civil union, and a postnuptial agreement is entered into after a couple takes their vows, the New Jersey divorce courts look at the parties very differently. When the agreement is pre-marital or pre-civil union, the court views the parties almost like two business people entering into a contract. Parties, however, are viewed as in a fiduciary relationship after marriage or a civil union and legal contracts between them are reviewed more cautiously, with a more suspicious look into the possibility of undue influence and duress. The postnuptial agreement lawyers of Richard C. Klein, ESQ., understand the intense scrutiny applied to New Jersey postnuptial contracts by the courts, and are expert at drafting agreements that can withstand that scrutiny.
In the 1999 case of Pacelli v. Pacelli, 319 N.J. Super. 185 (App. Div. 1999), the New Jersey Appellate Division set forth the standard for postnuptial agreements:
- There needs to be full disclosure by the parties – this should include tax returns, statements of assets, liabilities, income and current net worth, and any other pertinent information.
- Each party must have independent representation by his/her own lawyer.
- There needs to exist the absence of coercion or duress.
- The terms must be fair and equitable. Because the postnuptial agreement must be fair and equitable when both negotiated and executed, as well as at the time of enforcement, it is possible that circumstances may change and result in the agreement being unconscionable if enforced.
The recent high-profile divorce case of Frank and Jamie McCourt, owners of the Los Angeles Dodgers, demonstrates just how difficult enforcement of a postnuptial agreement can be. In that case, Frank McCourt purchased the Los Angeles for $431 million by taking out large loans and advances against future earnings. In order to protect the couple’s wealth from the creditors, they signed a postnuptial agreement, giving Frank sole ownership of the Dodgers and Jamie McCourt possession of all of their real estate.
During the divorce proceedings, Mrs. McCourt challenged the enforceability of the postnuptial agreement. She contended that six versions of the agreement were drafted, with only half relinquishing her ownership interest in the team, and the version she signed did not specify that Mr. McCourt would solely own the team. The judge ruled that the postnuptial agreement was invalid because Jamie McCourt did not understand that she was giving up her interest in the Dodgers. With the postnuptial contract unenforceable, the divorce action proceeded with the couple fighting over ownership of the team.
The marital agreement lawyers of Richard C. Klein, ESQ., understand the complexity of prenuptial and postnuptial agreements. Our attorneys will draft agreements that will give you peace of mind, providing you and your future or present spouse or same-sex partners with an understanding of your respective positions and expectations. Agreements drafted by our attorneys are able to withstand the thorough review by the New Jersey divorce courts, if necessary. Contact the New Jersey divorce attorneys at Richard C. Klein, ESQ., today to discuss how a prenuptial or postnuptial agreement can benefit your marriage or civil union.
Richard C. Klein, ESQ.
Woodland Falls Corporate Center
220 East Lake Drive
Suite 102
Cherry Hill, New Jersey 08002
Toll Free: 888-763-4490 | Telephone: 856-779-8700 | Fax: 856-779-8716