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Why Enter Into a Pre-Marital Agreement

New Jersey Divorce Lawyers | Family Law Attorneys > Blog  > Why Enter Into a Pre-Marital Agreement

Why Enter Into a Pre-Marital Agreement

Why enter into a pre-marital agreement

by Gary L. Borger, Esq.

Pre-marital agreements (formerly known as ante (before)-nuptial agreements) were originally used for a widow or widower to protect their grown children financially upon the parent’s passing, i.e., protecting their estate upon death from passing to a second spouse. That was at a time when divorce was considered shameful. Then came the 1960s when the divorce rate increased, and the stigma attached to it subsided.

It was then that pre-marital agreements came to be viewed as a manner of protecting oneself in the event of a divorce, not just protection of one’s estate upon death. Initially, the courts viewed such agreements skeptically. However, with the passage of time and more and more divorces, the court’s view changed, and the law now promotes enforcing such agreements as a contract between adults who plan to marry to create their own plan and parameters for financial disentanglement in the event of divorce. The courts in general felt that enforcing the terms of such negotiated agreements made at a time when the parties were preparing for marriage was more beneficial than forcing the spouses to fight it out in court in protracted, time-consuming, and expensive divorce litigation. Today, more people are considering pre-marital agreements to protect themselves financially in the event of a divorce

Often people seeking a pre-marital agreement were businessowners who wanted to protect themselves financially from having to share the value of their businesses with a second spouse in the event of a divorce and to eliminate or reduce their alimony exposure. Sometimes pre-marital agreements are used to protect a family business especially if a family business is to be passed to the next generation who will take it over as the older generation moves into retirement.

What can a pre-marital agreement do (and what can’t it do)?

First, a pre-marital agreement can’t address custody, parenting plans, and child support for children who may be born of or adopted during the upcoming marriage. Those issues must be left open if the couple marries, has children, separates, and ultimately separates.

Second, the agreement can address equitable distribution (or division of community property in those nine states that use the community property concept to divide marital property and debt in a divorce). Equitable distribution is the manner in which marital property and debt are divided at the time of divorce.  A pre-marital agreement can protect property and oneself from the other spouse’s debt in the event of a divorce. In such cases, the engaged couple can establish their own manner of dividing property and debt by agreement. Such agreements can protect not only pre-marital business interests and other pre-marital assets, but also assets acquired and debt incurred during the marriage. The increase in value of pre-marital assets during the marriage can be protected from the other spouse’s claims.

Third, while not necessarily as enforceable as property and debt division, the engaged couple can address alimony (also known as spousal support) in their pre-marital agreement. Doing so can eliminate alimony or limit the exposure to or amount of alimony that the spouse with the higher income may have to pay without a pre-marital agreement. Alimony laws vary from state to state in terms of amount and duration.

What are the pre-conditions necessary to enter into an enforceable pre-marital agreement in New Jersey?

Under New Jersey law, the pre-marital agreement statute (N.J.S.A. 37:2-31, et seq.), there first must be full disclosure of assets, debt, and income. Such disclosures should be attached to the agreement as proof that the disclosures were made before the agreement was signed.

Second, each party must have had the opportunity to consult with an independently chosen attorney to review the agreement and discuss his or her legal rights and obligations under the law and how the agreement eliminates or modifies those rights and obligations. While a party can waive the right to attorney review, it is much wiser for the party being presented with the proposed agreement to meet with an independently selected attorney to review the proposed agreement and have that attorney negotiate any changes before the agreement is signed.

How long before the marriage ceremony must such an agreement be signed for it to be enforceable?

The New Jersey pre-marital agreement statute does not provide a deadline before the marriage by which the agreement has to be signed prior to the marriage ceremony for it to be enforceable; however, the closer in time the parties enter into such an agreement prior to the marriage ceremony, the higher is the probability that a court may refuse to enforce the terms of the agreement. Therefore, it is this author’s opinion that anyone planning to get married and who wants to consider a pre-marital agreement should contact an attorney licensed to practice law in the State of New Jersey, and who concentrates their practice in the area of family law, optimally at least six months prior to the planned marriage date. While three months prior to the marriage is not too close in time, six months is a more desirable time frame so that neither party is under too much pressure when signing the agreement to make it seem less than a voluntarily signed agreement in the eyes of a judge.

In summary, anyone getting married should consult with a family law attorney in the state or commonwealth where one of the parties resides or where the parties will reside after the marriage to determine whether a pre-marital agreement is appropriate for financial protection in the event of divorce and to control to whom one’s estate passes upon death. Laws relating to the enforcement of pre-marital agreements vary from state to state.

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BorgerMatez, P.A. is a Cherry Hill, New Jersey law firm which concentrates its practice in the area of family law and whose attorneys are familiar with and experienced in drafting and litigating enforceability of pre-marital agreements.  Contact us at 856-424-3444 or use this form for a consultation with one of our attorneys, all of whom have more than 30 years of experience.


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