Question 1

What Is a Prenuptial Agreement?

Accepted Answer

Simply put, a prenuptial agreement is a legally binding contract entered into by two people before they get married. This agreement establishes how certain financial matters will be addressed during the marriage and, perhaps more importantly, how those matters will be addressed if the parties ever divorce, legally separate, or one spouse passes away. New Jersey recognizes prenuptial agreements pursuant to the state's Uniform Premarital and Pre-Civil Union Agreement Act. As long as the agreement satisfies all legal requirements, New Jersey courts will generally enforce its terms. A prenuptial agreement can address a wide range of financial issues, including premarital assets, premarital debts, ownership of real estate, business ownership interests, investment accounts, retirement assets, inheritances, spousal support provisions, rights to appreciation in value of certain assets, and financial obligations during the marriage. Without a valid prenuptial agreement in place, many of these issues may instead become subject to New Jersey's equitable distribution laws in the event of divorce. You should note that equitable distribution does not necessarily mean an equal division of assets. Rather, it means that the courts will divide marital property according to what they determine to be fair under the circumstances. Therefore, many individuals choose to enter into prenuptial agreements simply because they prefer to make these decisions themselves instead of leaving those decisions to the courts years later.

Question 2

Why Do People Get Prenuptial Agreements?

Accepted Answer

There are many reasons why individuals decide to enter into prenuptial agreements, and, often, those reasons extend far beyond simply protecting wealth. Some of the most common benefits include protecting assets acquired before marriage, such as a home, savings, or an investment portfolio, so those assets remain separate property; protecting a business from ownership disputes; protecting professional practices, which physicians, attorneys, accountants, dentists, and other professionals frequently safeguard; protecting inheritances and family wealth; clarifying responsibility for debts such as student loans, business debts, and credit card balances; protecting children from prior relationships, which many individuals entering second marriages wish to do; reducing future litigation by eliminating uncertainty and avoiding expensive disputes should a marriage end; providing transparency, since negotiating the agreement requires both parties to disclose their finances; and reducing stress during divorce proceedings. Some examples of assets and interests that can often be protected in a prenuptial agreement include homes and other real estate holdings, vacation properties, businesses and professional practices, stocks and investment accounts, retirement accounts and pensions, brokerage accounts, family heirlooms, anticipated inheritances, intellectual property rights, separate bank accounts, and existing debts and liabilities.

Question 3

Who Should Consider a Prenuptial Agreement?

Accepted Answer

Many people mistakenly assume that if they are not wealthy, they do not need a prenuptial agreement. Fortunately, this is not necessarily true. Some individuals who may wish to consider a prenuptial agreement include individuals entering a second marriage, individuals who own a home prior to marriage, business owners and entrepreneurs, individuals with significant retirement savings, people with substantial investment accounts, individuals expecting to receive inheritances, individuals with children from previous relationships, professionals who own private practices, individuals with substantial student loan debt, couples with significantly different income levels, individuals who own family businesses, and anyone who values certainty and financial predictability. Simply put, if you have assets, debts, children from previous relationships, or financial concerns that you wish to address before marriage, it may be worth discussing a prenuptial agreement with a lawyer.

Question 4

What Cannot Be Included in a New Jersey Prenuptial Agreement?

Accepted Answer

Though prenuptial agreements are highly customizable, there are limits to what may legally be included. New Jersey law prohibits certain provisions from appearing in these agreements. Some examples of what cannot be included in a prenup are child custody provisions, parenting time schedules, future child support obligations, provisions that encourage divorce, illegal provisions, clauses that violate public policy, attempts to waive a child's legal rights, and unconscionable terms. This is largely because New Jersey courts determine child custody and child support matters according to the best interests of the child at the time those issues arise, not years earlier when a couple first becomes engaged. Accordingly, even if parties attempt to include these issues within a prenuptial agreement, courts will generally decline to enforce those provisions.

Question 5

What Makes a Prenuptial Agreement Valid in New Jersey?

Accepted Answer

For a prenuptial agreement to be enforceable in New Jersey, it must satisfy several legal requirements. These requirements include that the agreement must be in writing, both parties must voluntarily sign the agreement, both parties must provide full and fair financial disclosure, neither party can be forced, pressured, or coerced into signing the agreement, and the agreement cannot be unconscionable when enforcement is sought. Though New Jersey law does not specifically require both parties to retain separate attorneys, many attorneys strongly recommend doing so. This is because separate legal representation can help establish that both parties understood the agreement and entered into it knowingly and voluntarily. You should also note that timing matters. For example, presenting a prenuptial agreement a day or two before a wedding can potentially create arguments that one party signed under pressure or duress. Therefore, it is generally advisable to begin the process well in advance of the wedding date whenever possible.

Question 6

What if I’m Already Married?

Accepted Answer

Fortunately, if you are already married and never signed a prenuptial agreement, that does not necessarily mean you have lost the opportunity to protect your assets. In these situations, many couples choose to enter into postnuptial agreements. A postnuptial agreement functions similarly to a prenuptial agreement, with the primary difference being that it is executed after marriage instead of before marriage. Postnuptial agreements may address many of the same issues addressed in prenuptial agreements, including ownership of assets, division of property, business ownership interests, spousal support obligations, responsibility for debts, protection of inheritances, and preservation of separate property. There are many reasons why married couples choose to draft postnuptial agreements. For example, one spouse may have started a business after the marriage began. In other cases, a spouse may have received a substantial inheritance or experienced a dramatic increase in income. Sometimes, couples simply wish to establish financial expectations moving forward after experiencing marital difficulties. As is the case with prenuptial agreements, postnuptial agreements should be carefully drafted to ensure they comply with New Jersey law. For a postnuptial agreement to be enforceable, it should include full financial disclosure, voluntary execution, fair and reasonable terms, proper drafting and execution, and compliance with New Jersey law. You should also understand that postnuptial agreements can be subject to additional scrutiny because spouses owe one another certain fiduciary duties during marriage. Therefore, ensuring that the agreement is properly drafted by an experienced family law attorney is often critical.

Atlantic County Prenuptial Agreement Lawyer