New Jersey Prenuptial Agreements (also called “premarital agreements” or “prenups”) are written contracts that couples enter into prior to marriage. Prenups in New Jersey are expressly allowed by the New Jersey Uniform Premarital and Pre-Civil Union Agreement Act (NJ Rev Stat §§ 37:2-31 to 37:2-41 (2020)), which sets forth the requirements for entering into a legally enforceable New Jersey Prenuptial Agreement, including the content that can and cannot be included in a premarital contract.
The fact that the State of New Jersey has embraced prenuptial agreements by codifying the contractual requirements in the Uniform Premarital and Pre-Civil Union Agreement Act makes New Jersey a favorable jurisdiction to enter into a binding and enforceable prenup.
Importantly, it is a requirement under New Jersey Law (NJ Rev Stat § 37:2-33) that a couple attach to their prenup a statement of their current assets entering the marriage. You must have sufficient “nexus” to New Jersey to justify having a New Jersey prenuptial agreement (for example, one party is a New Jersey resident, owns property in New Jersey, or you are getting married in New Jersey).
The terms of a prenup agreement are very personal. There is not a “one size fits all” standard New Jersey prenuptial agreement template that will work for every couple. Every couple getting married is unique, with different goals and needs.
DID YOU KNOW? A New Jersey premarital agreement is a private document between a marrying couple, and no one else. A New Jersey prenup does not get filed with any local, state or federal agency, and couples often choose to keep the terms confidential.
WHAT TERMS CAN BE IN A NEW JERSEY PRENUPTIAL AGREEMENT?
When a New Jersey couple gets married without a written premarital agreement, they have basically agreed to have their rights determined by a default set of marital and divorce laws that they might not understand, and which may not suit their needs and goals.
In contrast, a written prenuptial agreement signed before marriage allows spouses to take control of their destiny in the unfortunate event of separation and divorce by pre-negotiating the path of least resistance and what is in the best interest for both parties.
How do couples decide what to put in a New Jersey Prenup?
From a big-picture perspective, the content and terms of New Jersey prenups that are enforceable under the New Jersey Uniform Premarital and Pre-Civil Union Agreement Act are generally driven by a couple’s desire to “opt out” of certain default New Jersey laws that would otherwise determine their marital rights, but which laws might not be bad for them and/or might lead to fighting in the event of a divorce.
So, New Jersey premarital agreements are essentially written to allow a couple to agree on marital rights and divorce terms that supersede and replace those New Jersey divorce laws that often force couples to lawyer up and battle it out in court.
Below are a few examples of terms commonly found in New Jersey Premarital Agreements.
KEEPING SEPARATE PROPERTY SEPARATE
A popular use of a New Jersey prenuptial agreement is to keep each spouse’s Separate Property separate during the marriage, completely free from any marital claims in the event the marriage is dissolved. When couples decide to keep their respective Separate Property separate, it typically includes separate property owned prior to marriage, and separate property purchased or inherited during the marriage. A couple can also choose to keep income and debt resulting from Separate Property separate.
§ 37:2-34 of the New Jersey Uniform Premarital and Pre-Civil Union Agreement Act expressly allows parties to agree to what rights they have to their Separate Property and their jointly-owned Marital Property (discussed below).
HOW TO SPLIT MARITAL PROPERTY
In New Jersey, spouses who do not have a written prenuptial agreement have their marital property divided by the divorce court based on a system called equitable distribution. New Jersey is one of more than forty states that has adopted an equitable distribution law for dividing marital property and debts in a divorce, unless the spouses have contracted in writing for a different method of property division.
Equitable distribution does not automatically mean an even division of marital property, because the court will split the property between spouses in a way that is equitable based on the entire picture of the couple’s finances. Under
New Jersey’s Equitable Distribution law (NJ Rev State § 2A:34-23.1), there are 16 factors that a New Jersey court must consider when dividing a divorcing couple’s marital property, which include:
The income and property brought to the marriage by each spouse;
The contribution by each party to their marital property;
The ages and physical and emotional health of the spouses;
How long they were married;
The standard of living the couple enjoyed during the marriage;
Whether either spouse can support his or herself financially at the same standard of living;
The debts of the parties; and
Any other factor the court considers relevant.
SHOULD WE CONSIDER A
NEW JERSEY PRENUP?
Unfortunately, many marriages don’t have a fairytale ending. According to analysts and attorneys:
41% to 50% of first marriages end in divorce
60 to 67% of second marriages end in divorce
About 74% of third marriages fail
Responsible adults routinely prepare for disasters as an obvious part of their everyday lives, but they generally protect against catastrophic events that have less than a 5% chance of occurring. With the chances of a “marital disaster” approaching 50% or higher, it might be worth at least considering the pros and cons of a NJ prenup.
What is the #1 Reason to Consider a Prenup?
§ 37:2-34 of the New Jersey Premarital and Pre-Civil Union Agreement Act enables couples to agree on how to divide their separate and Marital Property. Today, it is increasingly common for couples elect to enter into a written premarital agreement that avoids the need to ever have a divorce court divide their marital property by equitable distribution.
Many couples “pre-agree” that it is in their best interests to have a written prenup that would divide their joint property evenly, rather than risking an expensive and emotionally draining court battle under the equitable distribution system.
New Jersey Prenups often include specific terms relating to major assets that spouses may purchase together during marriage, such as real estate. For instance, a New Jersey prenuptial agreement might split all of a couple’s marital property 50/50, except for real estate they purchase together which gets divided pro rata according to each spouse’s percentage of contributions to the property.
ALIMONY (SPOUSAL SUPPORT) IN NEW JERSEY
The right to receive alimony or spousal support after a divorce is another major topic that couples frequently address in a written prenuptial agreement, because the New Jersey Alimony Laws (NJ Rev State § 2A:34-23 (2020)) often leave spouses no real choice but to hire divorce lawyers to fight over alimony in court.
Courts in New Jersey may consider four different types of alimony:
Limited duration (awarded for the time it will reasonably take the spouse to improve earning capacity so that alimony is no longer needed)
Rehabilitative alimony, to enable one spouse to become self-sufficient and able to earn enough money to take care of himself/herself
Reimbursement alimony (where one spouse supported the other through advanced education)
In figuring out the amount of alimony to award and for how long, New Jersey law requires the court to consider fourteen different factors, one of which is how the marital property will be equitably distributed (as described above), and eight exceptional circumstances that may require an adjustment to the duration of the alimony.
A marrying couple that leaves alimony for a divorce court to decide has essentially agreed to battle it out in a public forum with little or no certainty as to the eventual outcome.
Alternatively, § 37:2-34(d) of the New Jersey Uniform Premarital and Pre-Civil Union Agreement Act allows couples to agree on a wide variety of alimony/spousal support terms, because everyone’s situation is unique.
It is very common for New Jersey couples to enter into a premarital agreement under which they completely waive (give up) the right to receive alimony/spousal support in the event of divorce. However, many people are pleasantly surprised to learn that a New Jersey prenup agreement can actually guarantee the right to payment of some minimum amount of alimony if the marriage is dissolved (for example, periodic alimony payments totaling $75,000 after a divorce). Frequently couples choose to allow - but limit - the amount of alimony available to either of them in the event of divorce, so that each party knows their “worst case” scenario in the event things go south.
Some couples agree to allow a spouse who is unemployed at the time of separation leading to divorce (e.g. a stay-at-home parent situation) to seek some pre-agreed amount of alimony, but otherwise waive the right to seek spousal support if both are employed. For the most part, a couple entering into a prenup in New Jersey can freely agree to whatever alimony terms make them comfortable to enter the marriage, given their unique personal situation.
Omitting spousal support terms from a prenuptial agreement just leaves the spouses to rely on default state laws in the event of divorce, which can lead to a court battle. Couples who agree on pre-defined alimony payment terms in their New Jersey premarital agreement can enjoy peace of mind that enables them to embark on the wonderful roller coaster of marriage with more confidence, optimism and excitement because they know that they will be on the same page during even the toughest of times.
A divorcing couple that entered into a valid prenuptial agreement before getting married has a contract that provides certainty as to their rights, minimizes conflict, hostility, and legal costs. A well-drafted prenup is like a roadmap that helps both spouses find the path of least resistance and conflict amidst the emotional turmoil of the separation and divorce process. Signing a written premarital agreement also provides some certainty as to their marital and divorce rights under New Jersey law.
IMPORTANT: There are many other terms that are typically included in New Jersey Prenups beyond those premarital concepts introduced above. The above list of concepts commonly included in New Jersey premarital agreements is not at all exhaustive.
If you are engaged to be married and interested in learning more about Prenuptial Agreements in New Jersey, please accept our invitation to schedule a free consultation with a Prenup Pros attorney 1-6 months before your anticipated wedding date.
NEW JERSEY PREMARITAL AND PRE-CIVIL UNION
AGREEMENT ACT (2020 EDITION)
37:2-31 Short title.
37:2-31. This article shall be known and may be cited as the "Uniform Premarital and Pre-Civil Union Agreement Act." Source: New.
L.1988, c.99, amended 2006, s.103, s.26.
a. "Premarital or pre-civil union agreement" means an agreement between prospective spouses or partners in a civil union couple made in contemplation of marriage or a civil union and to be effective upon marriage or upon the parties establishing a civil union;
b. "Property" means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings;
c. (Deleted by amendment, P.L.2013, c.72).
amended 2006, c.103, s.27; 2013, c.72, s.1.
37:2-33 Formalties; consideration.
A premarital or pre-civil union agreement shall be in writing, with a statement of assets annexed thereto, signed by both parties, and it is enforceable without consideration.
L.1988, c.99; amended 2006, c.103, s.28.
37:2-34 Contents of premarital or pre-civil union agreement.
Parties to a premarital or pre-civil union agreement may contract with respect to:
a. 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;
b. 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;
c. The disposition of property upon separation, marital dissolution, dissolution of a civil union, death, or the occurrence or nonoccurrence of any other event;
d. The modification or elimination of spousal or one partner in a civil union couple support;
e. The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
f. The ownership rights in and disposition of the death benefit from a life insurance policy;
g. The choice of law governing the construction of the agreement; and
h. Any other matter, including their personal rights and obligations, not in violation of public policy.
L.1988, c.99; amended 2006, c.103, s.29.
37:2-35. Premarital or pre-civil union agreement not to adversely affect right of child support.
A premarital or pre-civil union agreement shall not adversely affect the right of a child to support.
L.1988, c.99; amended 2006, s.103, s.30.
37:2-36 When premarital or pre-civil union agreement becomes effective.
A premarital or pre-civil union agreement becomes effective upon marriage of the parties or upon the parties establishing a civil union.
L.1988, c.99; amended 2006, c.103, s.31.
37:2-37 Amendment or revocation of premarital or pre-civil union agreement.
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.
L.1988, c.99; amended 2006, c.103, s.32.
37:2-38 Enforcement of premarital or pre-civil union agreement; generally.
The burden of proof to set aside a premarital or pre-civil union agreement shall be upon the party alleging the agreement to be unenforceable. A premarital or pre-civil union agreement shall not be enforceable if the party seeking to set aside the agreement proves, by clear and convincing evidence, that:
a. The party executed the agreement involuntarily; or
b. (Deleted by amendment, P.L.2013, c.72)
c. The agreement was unconscionable when it was executed because that party, before execution of 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.
d. The issue of unconscionability of a premarital or pre-civil union agreement shall be determined by the court as a matter of law. An agreement shall not be deemed unconscionable unless the circumstances set out in subsection c. of this section are applicable.
amended 2006, c.103, s.33; 2013, c.72, s.2.
37:2-39 Enforcement of premarital or pre-civil union agreement; marriage or civil union determined void.
If a marriage or civil union is determined to be void, an agreement that would otherwise have been a premarital or pre-civil union agreement is enforceable only to the extent necessary to avoid an inequitable result.
L.1988, c.99; amended 2006, c.103, s.34.
37:2-40 Construction of article.
a. This article shall be construed to effectuate its general purpose to make uniform the law with respect to the subject of the article among states enacting the "Uniform Premarital Agreement Act."
b. This article shall be construed to apply to pre-civil union agreements executed on and after the effective date of P.L.2006, c.103 (C.37:1-28 et al.).
L.1988, c.99; amended 2006, c.103, s.35.
37:2-41 Application of article.
This article shall apply to premarital agreements executed on and after its effective date.
This article as amended by P.L.2006, c.103 (C.37:1-28 et al.) shall apply to pre-civil union agreements executed on and after the effective date of P.L.2006, c.103 (C.37:1-28 et al.).
L.1988, c.99; amended 2006, c.103, s.36.