What is it about this time of year? I’ve been told that the holidays are the most popular time of year for couples to get engaged. While this a special time for the engaged couple, it is also a time when some couples should consider a prenuptial agreement or premarital contract. A prenuptial agreement is a contract between the engaged couple that addresses equitable distribution, alimony, and other issues that may arise if the couple were to divorce.
A prenuptial agreement may not be for everyone, but in many instances it makes sense. For individuals with substantial assets, a business, family wealth or children from a prior marriage, a prenuptial agreement is usually a good idea. Sometimes people think a prenuptial agreement is a reflection of how an individual feels about the potential outcome of the marriage. But in reality, this is rarely the case. For instance, a family business or assets an individual would like to leave to children from a prior relationship, are assets that need to be protected. Often the parents who own the family business insist that their children have prenuptial agreements to prevent the prospective spouse from ever having a claim to the business.
Some believe that nearly any attorney can draft a prenuptial agreement, but the true test is – will it be enforceable if challenged?? That is why it is so important to be familiar with New Jersey’s laws for prenuptial agreements. N.J.S.A. 37:2-31 to 37:2-41. In New Jersey a premarital agreement will not be enforceable if the party seeking to set aside the agreement proves that they executed the agreement involuntarily or the agreement was unconscionable at the time enforcement was sought. A prenuptial agreement will also not be enforced if prior to the execution of the agreement a party: (1) was not provided full and fair disclosure of the earnings, property and financial obligations of the other party; (2) 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; (3) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party; or (4) did not consult with independent legal counsel or did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.
There are many ways that a prenuptial agreement can be found unenforceable. That is why it is so important to consult an attorney and to be clear about what are your goals and the assets you wish to protect. Unfortunately, by the time clients get to me it is too late to advise them about a prenuptial agreement. However, if planning to remarry, and there are assets to be protected, consider a prenuptial agreement – it can save time and headache in the long run.
To read previous blog entries on this topic, click here and here.