In New Jersey, Governor Christie recently signed into a law a revised set of rules concerning how prenuptial and pre-civil unions agreements in the state are written up and enforced. The changes are revisions to the New Jersey Uniform Premarital and Pre-Civil Union Agreement Act and are intended to make it more difficult to modify a prenup should a couple later decide to divorce.
Under the old regulations, prenuptial or pre-civil union agreements could be ruled invalid by a judge if one party successfully made the case that the terms of a prenup were “unconscionable” at the time of the divorce. An example of an unconscionable position would be if the prenup contained language that no alimony would be paid or received by either party because, at the time they signed the prenup, both individuals had high-paying jobs. If one spouse left the work force to stay home and raise children, and the couple then decided to divorce, these changed economic circumstances could pave the way for the non-earning spouse to argue that the agreement denying alimony should be invalidated.
However, under the newly revised prenup rules, there are a number of key changes. First, the definition of what constitutes “unconscionable” has been significantly narrowed, and secondly, the terms of the contract must have been unconscionable at the time the agreement was signed and not at the time of the divorce. In the scenario above, depending on the language of the original contract, the new rules would make it much more difficult for the spouse seeking alimony to get a judge to “rip up” the prenup and assign alimony when he or she had clearly signed away this right, even if it was decades before the divorce.
Another important revision concerns financial disclosure. Under the new rules, if one party signing the prenup is not fully aware of their partner’s assets, and hadn’t waived the right to know, this lack of financial disclosure would be considered unconscionable — and the prenup could be invalidated. However, if both parties provide full financial disclosure at the time the prenup is signed (or sign a waiver agreeing not to), the agreement is probably going to stand, even if there are hardships on the part of the spouse with fewer assets at the time of the divorce.
Given these rule changes, it’s easy to see why family law attorneys in New Jersey are now even more cautious when advising clients on how to write a prenuptial or pre-civil union agreement. Entering an agreement at a time when two soon-to-be spouses truly believe they will be together for the rest of their lives often leads some individuals to agree to conditions that, if they could have thought things through a bit more clearly, they never would have agreed. Under the new law, there is no longer much “wiggle room” to allow people to undo these kinds of choices.
In this vein, providing full financial disclosure, and really thinking through the different scenarios that could affect future finances and support after a divorce, may have the positive effect of making couples to take a more practical look at the financial aspects of marriage and divorce, and truly decide what’s best for them. If anything, the new rules should encourage couples seeking prenuptial agreements to take a slowed down, more thoughtful approach to drawing up a prenup. In my book, this is never a bad thing.
Finally, new rules concerning prenups in New Jersey also do nothing to change the many circumstances in which seeking out a prenuptial or pre-civil union agreement is a really wise choice. For example, if you are entering a marriage with family assets or an inheritance, if you have already been married and want a plan in place this time around in the event of a divorce, if you have children from another relationship and want to protect assets you intend for them to have one day, if you and your partner have large disparities in income and assets, if one spouse owns a business, or if your soon-to-be spouse is in debt…please check in with a family law attorney to find out your prenuptial or pre-civil union options for protecting yourself and your future. You’re worth it!
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