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The Evolving Law of Enforcement of Prenuptial Agreements in New Jersey

wedding handA  prenuptial agreement (also called antenuptial agreement or premarital agreement) is a contract that parties enter into before a marriage (or a civil union) in which they make provisions for equitable distribution of assets and/or spousal support in the event of a divorce.   One New Jersey Court stated, “antenuptial agreements fixing post-divorce rights and obligations [are] … valid and enforceable” and courts should “welcome and encourage such agreements at least ‘to the extent that the parties have developed comprehensive and particularized agreements responsive to their peculiar circumstances’.”  D’Onofrio v. D’Onofrio, 200 N.J. Super. 361, 366 (App. Div. 1985).

Based on New Jersey’s common law, in determining whether to enforce a prenuptial agreement, at least three requirements had to be met.  there had to be full disclosure by each party as to his/her financial conditions.    The prenuptial agreement could not be the product of fraud or duress. The parties had to understand and accept the terms and conditions of the agreement, sign the prenuptial agreement voluntarily, and have sufficient time to reflect on their actions. Finally, the agreement had to be fair and not “unconscionable”. Even if what one spouse receives under a prenuptial agreement is small or disproportionate compared to what the other sposue receives under the agreement, as long as a spouse is not left destitute or left as a public charge, the prenuptial agreement could be found enforceable.    DeLorean v. DeLorean, 211 N.J. Super. 432, 436-38 (Ch. Div. 1986); Marschall v. Marschall, 195 N.J. super. 16, 29-31 (Ch. Div. 1984).

In 1985, the Appellate Division in D’Onofrio v. D’Onofrio, 200 N.J. Super. 361, 366 (App. Div. 1985), held that the alimony provision of a prenuptial agreement does not have to “cover all eventualities, since upon changes in circumstances a spouse may apply to the court for an appropriate modification” in alimony.  Thus, a prenuptial agreement, under the D’Onfrio and Marschall standard, could be modified based on a change in circumstance if there is a substantial change in circumstance from the marital standard of living to the post-marital standard to avoid leaving a spouse at a subsistence standard of living.  Rogers v. Gordon, 404 N.J. Super. 213, 227 (App. Div. 2008).

In 1988, New Jersey adopted the Uniform Pre-Marital Agreement Act, N.J.S.A. 37:2-31 to -41, which defined more thoroughly when a prenuptial agreement may be enforced.  The Act put the burden of proof on setting aside a premarital or pre-civil union agreement upon the party alleging the  prenuptial agreement to be unenforceable.  Under N.J.S.A. 37:2-38, such a litigant had to prove by clear and convincing evidence that:

a. The party executed the agreement involuntarily; or

b. The agreement was unconscionable at the time enforcement was sought; or

c. 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.
Still, the enforceability of a prenuptial agreement was determined at the time that a prenuptial agreement was sought to be enforced.  See Rogers v. Gordon,  404 N.J. Super. at 220-23.  Therefore, a prenuptial agreement that, for instance, left a dependent spouse without a means of reasonable support, might not be enforced by the Family Court in a divorce.
The Legislature, however, has again modified the statute governing enforcement of a prenuptial agreement.  On June 28, 2013 New Jersey Governor Chris Christie signed a bill mandating that Family Part judges evaluate prenuptial agreements as of the date of the signing of the prenuptial agreement, and no longer as of the date on which enforcement of the prenuptial agreement is sought (which can be years after the prenuptial agreement is signed).
This change in the law was designed to ensure meaningful and enforceable contracts and reduce litigation on the enforceability of prenuptial agreements.  The consequences, however, of the new statute remains to be seen.   Will prenuptial agreements be used more frequently given the Legislature’s desire to make prenuptial agreements more meaningful?   Will prenuptial agreements become less common as parties desiring to marry or enter into a civil union may be concerned about the risks of future changes in circumstance such as the birth of children or substantial changes in employment status affecting the fairness of the prenuptial agreement down the road – that the court cannot consider when determining the enforceability and unconscionability of the agreement?   The courts can only consider circumstances at the time that the agreement is signed, even if there are later significant changes.

It is important to note, that this new law applies only to prenuptial agreements entered into AFTER the effective date, not to prenuptial agreements already entered into.    The law as it existed previously will still be applied to disputes over enforcement of prenuptial agreements drafted before the effective date of the new statute.    Persons considering entering into a prenuptial agreement prior to marriage or entry into a civil union should make themselves aware of New Jersey’s evolving law on the enforcement of prenuptial agreements.