Prenuptial Agreements

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It is not uncommon for parents of a person that is getting married to demand that their child get a prenuptial agreement to protect the family business, trusts or other assets.  While common, these can be difficult agreements to draft because the couple that is marrying appear to be aligned, and often will agree to terms between themselves, only for different terms to appear in the document, which are far less generous to the other party.

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Copyright: alexmillos / 123RF Stock Photo

It would not be shocking to learn that to induce their fiance’ into signing, the person promises that they won’t actually follow it, or they will tear it up after it is signed.  Well, the New York Post, a beacon for interesting divorce news, recently ran a story where the parties did just that.

The story reports that  the groom to be convinced his then-fiancée to sign the prenuptial agreement during their “whirlwind engagement of less than three weeks.” Allegedly, he told her that his father “threatened to cut him off” if he didn’t have an agreement. Further, he allegedly promised her that he would tear it up after the wedding and in fact, on the honeymoon, the parties jointly tore up the prenuptial agreements and threw it into the ocean.

Notwithstanding this act, a New York  judge enforced the prenuptial agreement because the document expressly states that no promises or covenants outside the agreement shall matter or be taken into account and because each party had their own lawyer representing them when entering into the agreement.

How does this square with the Petrakis case that we blogged about last year where a New York court threw out a prenup because it was coerced?  In that case, the husband allegedly promised to “tear up” the prenup when the parties had kids?  What about claims like fraud, fraudulent inducement to contract, detrimental reliance, etc.?  Should one party be bound by the other party’s undisclosed intentions – essentially ignoring the seemingly undisputed words and deeds of the other.

That said, most agreements specifically have a clause that require all changes to the agreement to be in writing and signed with the same formality as the prenup itself.  Moreover, the New Jersey prenuptial agreement statute specifically says:

After marriage of the parties or the parties establishing a civil union, a premarital or pre-civil union agreement may be amended or revoked only by a written agreement signed by the parties, and the amended agreement or revocation is enforceable without consideration

So, what is the take away.  Sadly, you cannot rely on your spouse to be or spouse’s representation about changing or tearing up a prenup.  Like everything else, you need to get it in writing.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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Yesterday, I posted about the struggles of Gital Dodelson, a 25 year old New Jersey resident who is fighting to obtain a Get – the bill which the husband gives to the wife in order to free her to marry again.

Therein, I noted that remedies under New Jersey law are limited, at best, when a husband refuses to grant his wife a religious divorce.  Indeed, the court in Afalo v. Afalo (1996), stated that this was, in part, because to compel a Get would be judicial entanglement in religious affairs.  And that is where the Get laws in New Jersey stayed for some time.

Then, in 2011, the Appellate Division offered a glimmer of hope for the “Agunah (chained woman) crisis,” as it is commonly referred to.  Lowy v. Lowy held that orders that a husband give a Get are unconstitutional, unless the husband has contractually agreed to give the Get (or to abide by the outcome of a religious arbitration, which ends up ordering him to give a Get):

The parties were divorced on September 20, 2004 when the Family Part issued a dual final judgment of divorce, which, by agreement of the parties, incorporated the August 4, 2004 decision of a Bais Din (rabbinical court) located in Monsey, New York…. [But] the August 2004 decision of the Bais Din … did not … require defendant to provide his ex-wife with a Jewish divorce … [and t]he judge’s reliance here on the purported decision of the Bais Din was [therefore] flawed ….

Once the Bais Din decree is eliminated as a source of authority for the judge’s August 27, 2010 enforcement order — as it must be — the order cannot be sustained because it constitutes impermissible judicial involvement in a matter of religious practice. Simply stated, the judge lacked the authority to compel defendant to “give the Get” where, under the facts presented here, defendant was not bound by any contractual agreement to do so.

Essentially, the Court’s ruling in Lowy offered a prophylactic measure – a means to protect a woman from suffering the same fate as Gital, and hundreds like her.

The Jewish community responded, drafting what is called a “Halachic (Jewish Law) Prenup”, which is endorsed by rabbis throughout the United States, Canada and Israel.  On the website, which contains multiple forms of the prenup to conform to the laws of various jurisdictions, it is described as “The Single Most Promising Solution to the Agunah Crisis.”

Rabbi Jeremy Stern, of the Organization for the Resolution of Agunot (ORA), has stated:

From our perspective at the Organization for the Resolution of Agunot, the Beth Din of America’s halakhic prenup has been extremely effective in assuring that a get is giving in a timely fashion. We do not have any cases at ORA in which a prenup that was properly signed and produced for the courts did not result in the issuance of a get in a relatively short period of time.

Once seemingly taboo (I’ve heard people describe it as “unromantic”), the concept entering into a Prenuptial Agreement has been more commonplace over the past several years. According to a recent survey of the American Academy of Matrimonial Lawyers (AAML), 63 percent of divorce attorneys said they have seen an increase in prenuptial agreements over the past.  Further, 46 percent reported an increase in the number of women requesting them.

While I would venture to say that the statistics are not as staggering when it comes to signing a “Halachic Prenup”, certainly the increase in prenuptial agreements generally could dispense with reservations couples may have if asked by their rabbi or lawyer to enter into one before marriage.

Of course, the “Halachic Prenup” does not offer any relief to the existing agunot, an infirmity which, unfortunately, is on the rise.  As reported in Newsweek yesterday, “a 2011 study by the Mellman Group reported 462 cases of agunot in the U.S. and Canada between 2005 and 2010, suggesting a marked increase in get refusals as well as a decline in resolutions, which can take anywhere from one to five years, sometimes longer.”

The picture may remain bleak for existing Agunot, at least in terms of the availability of legal remedies.  It is for that reason that the importance of the “Halachic Prenup”, from the perspective of organizations like ORA, cannot be understated.

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Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

Baby Boomers have always been trendsetters.  They were the first generation to rock out to bands such as the Beatles and they were the generation that was on the front lines of the feminist and civil rights movements.  Baby Boomers are culturally associated with rejection and redefinition of traditional values. And holding true to their reputation, Baby Boomers as a group are now trending toward later in life divorces.

Until recently, it was fair to say that the couple down the street, married for 40 years with three adult children, were not separating any time soon.  Indeed, in 1990, fewer than 10% of divorcing couples were over age 50.  Now, it’s one in four.

In an Op-Ed piece in the Los Angeles Times entitled A ‘gray divorce’ boom, the author attributes this trend to the dramatic changes in the meaning of marriage over the last several decades:

Today, we live in an era of individualized marriage, in which those who wed have high expectations for marital success. Americans expect marriage to provide them not simply with stability and security but also with self-fulfillment and personal satisfaction. Roles are flexible; the traditional breadwinner-homemaker model is no longer the status quo. Good spouses engage in open communication and are best friends. This is a high bar for many to achieve, let alone maintain over decades while juggling work and child-rearing.

The above-described cultural trends toward individualism, independence and gender role reversal have shaped the Baby Boomer generation.  It is no surprise, therefore that in a recent HuffPost Divorce piece by blogger Joy Cipoletti, the tag line read “What’s it like to be divorced in midlife? In a word, freeing.”

Baby boomers are not a generation that settles.  After all, as a generation, they are idealists, genuinely expecting the world to improve with time. Now, after raising their families, it is their time to fly out of their empty nests.

As Cipoletti concludes:

With all the challenges in the early years after divorce, I wondered if it was possible to enjoy life as a midlife divorced breadwinner mom, and to my delight, it is. By strengthening my spiritual connection and letting go of the picture I had for how my life “should” look, I have created a life I love today. I have rewarding work and time for things that are important to me: spirituality, great relationships with my kids (two now in college), friendships, exercise and nutrition, reading and more. From surviving to enjoying -– that’s what happened after my midlife divorce.

______________________________________________________________________________ Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

What do divorce and economics have in common?  Well, a lot. But today I am focusing on the unlikely link between the theory of information asymmetry – which deals with the study of decisions in transactions where one party has more or better information than the other – and the New Jersey Divorce App.

Smartphone Info  (photo courtesy of freedigitalphotos.net)

According to the acclaimed book, Freakonomics, the theory of information asymmetry accounts for why we hire a real estate to sell our house, an insurance broker to purchase long-term health insurance, and a funeral director to purchase a coffin for a loved one that has passed.

So what does the information asymmetry have to do with divorce, you ask?  Well, typically, when getting divorce, you hire an expert – a divorce lawyer – to handle your case.  After all, we are well-versed on all things divorce, custody, alimony, child support, equitable distribution, tax issues, and many other issues with which you may not be familiar.

In other words, the divorce lawyer has an information asymmetry that the client seeks to tap into to achieve the best result possible.

But what if you could bridge the gap between the lawyer’s vast knowledge and your own?  Would you achieve a better result if you could actively participate in the process?

Possibly.

Just like studying up on the housing market may assist the person selling or buying their house when working with a real estate agent, having more information as a litigant during the divorce process may help you inform your attorney as to the issues in your case.

That is where the New Jersey Divorce App can help tremendously.  It is designed specifically for the client.  It takes information regarding the divorce process, synthesizes it, and presents it to the client in a way that they can easily understand.

For example, when you download the app, you will see a section called “Divorce Information,” which covers the following topics:

  • Overview of the Divorce Process;
  • Custody;
  • Child Support;
  • Alimony; and
  • Equitable Distribution.

Click on these larger topic headings, and you will get to a myriad of subtopics; many of which will pertain to your specific case.  This section is a great compliment to the Finance Tracker and Asset Identifier, which allow you to interface with your attorney like never before.

So just like you would not buy or sell a house without doing a little research, don’t go into your divorce without making that information asymmetry a little less asymmetrical.

For more information and to download the New Jersey Divorce App, click here.

______________________________________________________________________________ Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

Oftentimes I hear from clients that gathering their financial information is the most daunting task they will face during the divorce process. They picture being buried in an avalanche of documents, account numbers and canceled checks.

The New Jersey Divorce App’s Finance Tracker can help.  In fact, I have recommended it to my clients before, with great results.

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The Finance Tracker is designed to help you focus in on the necessary information that you will need throughout the divorce process.

It is split up into 4 categories:

Income

Assets – like your house, car, bank accounts, retirement accounts, etc.

Expenses

Liabilities

Each section is then split into subcategories, which allows you to categorize the information in a way that makes sense.

Here is the best part: you can send the information directly to your attorney – straight from the app!

While the divorce process can be overwhelming at times, the New Jersey Divorce App, along with its Finance Tracker and other great features make things a little bit more manageable.

For more information and to download the New Jersey Divorce App, click here.

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Eliana T. Baer is a frequent contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

Back in October, I blogged about the potential amendments to the New Jersey’s Premarital Agreement Act.  As of June 27, 2013, the proposed bill is now new law.

Prenuptial Agreements are meant to fix parties rights and responsibilities in advance, so as to avoid litigation and aggravation in the future.  In fact, right up front in many if not most prenuptial agreements there is a “Statement of Intention” as follows:

It is the intention of the parties in entering into this Agreement that in the event of the termination of the marriage by divorce or death, certain rights shall be fixed in advance. It is their intention to avoid litigation and intrusion into their professional and personal lives and the lives of their families and business associates, which would perhaps otherwise occur if this Agreement had not been entered into.

Unfortunately, unlike in many other states, where prenuptial agreements are usually ironclad as long as there was full disclosure and the other procedural requirements are met, that has not been the case in New Jersey.  The major reason for this is that in New Jersey, aside from setting aside a prenup due to failure to follow the procedural requirements, including full disclosure, agreements can be set aside if they are deemed to be unconscionable, not only when they are entered into, but when they are to be enforced at the time of the divorce.  As a result, I have heard judges say that they have never enforced a prenuptial agreement.  I have heard other judges give the rationale that because you don’t know what is going to happen in the future, it is unfair to enforce the agreement against a spouse where she/he waives alimony or the equitable distribution rights.  That rationale misses the point as that is the entire reason for a prenuptial agreement.

I have even had cases where the judge allowed the entire case to go forward, including the appointment of forensic accountants to value a business that was excluded in the prenuptial agreement as a separate asset, not because the adverse party was arguing fraud or unconscionablity up front, but because they wanted to see if they could go on a fishing expedition in discovery to try to come up with something to set it aside.

The amendment to the statute essentially removes the “unconscionability at the time of enforcement” attack on agreements.  As noted in the last post, the reason for Amendment was as follows:

The bill eliminates this statutory definition as well as the determination of unconscionability on the basis of when enforcement of the agreement was sought. It instead provides that a premarital or pre-civil union agreement could not be deemed unconscionable unless the agreement was unconscionable when executed because the party seeking to set aside the agreement: (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 and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.

This bill applies to all future prenuptial agreements and any agreements revised after the amendment.

So now, as long as there has been full disclosure, and the agreement is not unconscionable when it was entered into, it should likely be enforced.  This represents a major departure from the prior law.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

 

Yesterday, I posted on on the Petrakis case in New York where a coerced and fraudulently induced prenuptial agreement was set aside.  This case has been all the buzz in both the main stream news and the family law community nationwide. 

Many people are shocked by this decision because most agreements typically provide that the agreement is the entire understanding and that there are no "side deals" or parts of the agreement not in the document.  Similarly, most cases provide disclaimers for coercion, undue influence, not enough time, etc.. Generally, agreements are set aside if there was not full disclosure and/or there was significantly inaccurate disclosure or the agreement is unconscionable to enforce.  Depending on the jurisdiction, unconscionability is determined either when the agreement was signed or when it was to be enforce and in some jurisdictions, like New Jersey, both. 

Today’s New York Post reports that the husband plan’s on appealing the ruling to the Court of Appeals (the highest court in New York).   Interestingly, his lawyer, Stephen Gassman stated that the husband “did not anticipate the publicity and he wants his side of the story to be told.”’  The Court of Appeals can choose not to hear the case.  Stay tuned.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

How many prenuptial agreements have language in them that the parties are entering into the agreement free from duress, coercion, undue influence, etc?  The answer is all of them.  Some even ask people to waive fraud – how you can do that I don’t know because if you knew you were being defrauded, you probably wouldn’t enter into the agreement.  How many times is the agreement presented at the last minute, after the bride to be’s parents are out tens of thousands of dollars for the wedding?  How many times does the person presenting the agreement say "Don’t worry about it, it doesn’t mean anything", "don’t worry about it, I’ll give you more" or "don’t worry about it, I’ll rip it up in 5 years or after we have kids, etc?" 

This probably happens all to often or at least, more often then we want to believe.  In most cases, since you have said you have entered into the agreement free from duress, etc., you will have a hard time getting out of the agreement at the time of divorce.

But alas, comes the Petraikis case out of New York discussed in yesterday’s New York Post.  In this case, Elizabeth argued that Peter coerced her signature, threatening to call off the wedding even though her father had already paid $40,000 for the reception.  She also claimed that he told her that he would rip up the agreement as soon as they had children.  The trial court set aside the prenup on the basis that Peter fraudulently induced Elizabeth to sign it.  The Appellate Court upheld this decision.

In New York, prenups are usually particularly hard to overturn so many deem this to be a landmark decision.  The take away here is that despite the recitations in the agreement, the door is open to try to prove contrary behavior and/or that there were additional promises outside of the agreement.  One wonders whether a video taped signing with the usual questions that the agreement was voluntarily being entered into would have saved the agreement.  That said, for the proponent of the agreement, you need to be really careful about what you say to induce the other side to sign an agreement and what pressure is put on to get an agreement signed.

 

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

 

Is prenuptial agreement reform coming to New Jersey? It appears to be the case.

Prenuptial Agreements are meant to fix parties rights and responsibilities in advance, so as to avoid litigation and aggravation in the future.  In fact, right up front in many if not most prenuptial agreements there is a "Statement of Intention" as follows:

It is the intention of the parties in entering into this Agreement that in the event of the termination of the marriage by divorce or death, certain rights shall be fixed in advance. It is their intention to avoid litigation and intrusion into their professional and personal lives and the lives of their families and business associates, which would perhaps otherwise occur if this Agreement had not been entered into.

Unfortunately, unlike in many other states, where prenuptial agreements are ironclad as long as there was full disclosure and the other procedural requirements are met, that has not been the case in New Jersey.  The major reason for this is that in New Jersey, aside from setting aside a prenup due to failure to follow the procedural requirements, including full disclosure, agreements can be set aside if they are deemed to be unconscionable, not only when they are entered into, but when they are to be enforced at the time of the divorce.  As a result, I have heard judges say that they have never enforced a prenuptial agreement.  I have heard other judges give the rationale that because you don’t know what is going to happen in the future, it is unfair to enforce the agreement against a spouse where she/he waives alimony or the equitable distribution rights.  That rationale misses the point as that is the entire reason for a prenuptial agreement.

Continue Reading Prenuptial Agreement Reform in New Jersey Appears Likely

We previously blogged on the Appellate Division’s notable decision in Rogers v. Gordon, which addressed the legal standard applicable to prenuptial agreements signed prior to New Jersey’s enactment of the Uniform Premarital Agreement statute.  There, the Appellate Division reversed a trial court Order to the extent that it set aside the entire prenup, since, as to equitable distribution, the husband knew that the wife would likely be wealthier than him at the time of a divorce given her family wealth.  As to the issue of alimony, however, the Appellate Division modified the trial court’s Order by holding that the husband could seek alimony at a later date if he could establish "changed circumstances" pursuant to  Lepis v. Lepis, 83 N.J. 139 (1980).

Considering the level of acrimony involved in the divorce proceeding, which could be easily discerned from the first Appellate Division decision, it was no surprise that a second appeal was filed, this time as to the issue of counsel fees.  On this appeal, the wife argued that the trial court erred by allowing the husband to seek and obtain counsel fees as to his claim for alimony, since he was denied such a claim in relation to equitable distribution issues previously raised. 

The Appellate Division affirmed the trial court’s finding that the husband had expressly waived in the prenup his right to counsel fees in relation to equitable distribution, but that he had not done so as to alimony since the prenup provision regarding alimony did not contain a similar provision waiving counsel fees on that issue.  Ultimately, the Appellate Division remanded for a proper calculation of fees incurred as to alimony, but what struck me as interesting in reviewing the Opinion was the Appellate Division’s conclusion that the husband’s attorney had achieved some sort of success as to the alimony issue.  Specifically, while it noted that the attorney had not obtained for the husband an immediate benefit – i.e., he still was not entitled to alimony without establishing changed circumstances – the attorney was deemed successful in that he opened the door for the husband to make such a claim in the future.  This even though the husband could very well fail in making that future claim. 

The primary theme in the case was one of contract interpretation – while one paragraph contained language waiving counsel fees, another did not.  Since the prenup was the product of expert drafting, the Appellate Division found the lack of language waiving counsel fees as to alimony to be significant and, as a result, did not preclude the husband’s claim.