Here’s Why Premarital Agreements Are Good
It takes a great deal of maturity and love to sit down with your future spouse and discuss things like expectations for shared property, earnings, debt, and what happens if you have children. That is why premarital agreements are recommended rather than allowing the state to be the sole arbiter in the event of divorce.
A premarital agreement, also known as a prenuptial agreement, will set forth all of your rights and obligations in the event of separation and divorce. Premarital agreements are especially important if one person or the other has a business, premarital assets, children from a previous marriage, or has substantial assets or earnings.
It is not selfish to request a premarital agreement, but rather it is good sense to plan ahead. A premarital agreement does not presuppose that you will be divorced, but in the event you are, it will save significant anxiety and prevent you from incurring significant legal fees and litigation in the event divorce finds its way to your relationship.
As a general rule, the money you earn and the retirement funds you accrue and property you buy will be a marital asset. Assets which are not subject to division upon divorce are any premarital assets, inherited funds, or gifts from third persons which are not commingled during the marriage.
For example, if you own a home before marriage and it is sold during the marriage and the proceeds used to buy another house with your new spouse in joint names, the equity in your premarital home then becomes a marital asset subject to division. If you divorce, you won’t automatically be entitled to more equity, even if your spouse didn’t contribute to the cost. Other subjects of a premarital agreement might include debt acquired prior to the marriage and future support.
The Law of Premarital Agreements in New Jersey
It is healthy to discuss these issues with your fiancé/fiancée and, when appropriate, enter into a premarital agreement. The law of premarital agreements in New Jersey permit couples to contract with regard 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.
Premarital agreements must be in writing and have a statement of assets attached and signed by both parties.
Don’t wait until the last minute. At least six months prior to the marriage, you should have preliminary discussions with your fiancé/fiancée.
If you believe that a premarital agreement is a good thing to do, one of you should initially go to an attorney who can prepare a proposed agreement. That agreement can then be sent to your fiancé/fiancée who can have it reviewed by their own attorney.
Related: NJ Legal Mediation & Arbitration
Typically, there is a very short period of negotiating some of the terms and the agreement is signed. Do not expect your fiancé/fiancée to look at a premarital agreement a few weeks before the wedding and then be prepared to sign the agreement hastily. If that occurs, the premarital agreement may not be upheld or enforced in the future because of the last- minute pressure asserted upon one of you to sign an agreement on the eve of your wedding.
Whether you are the spouse seeking a premarital agreement or the spouse being requested to work out a premarital agreement, it is important to speak with an attorney far enough in advance of your wedding.
The Family Law attorneys at Gruber, Colabella, Liuzza and Thompson can help you navigate, step by step, through this legal process. Call for a free legal consultation at 973-398-7500.