Respected Counselors, Litigators and Mediators

Enforceability of a Premarital Agreement

The enforceability of premarital agreements, also known as prenuptial and antenuptial agreements, is governed by the Uniform Premarital and Pre-Civil Union Agreement Act. N.J.S.A. 37:2-31 to -41. Pursuant to N.J.S.A. 37:2-38, the party alleging unenforceability of the premarital agreement must prove by clear and convincing evidence that the party executed the agreement involuntarily or 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. Additionally, the issue of unconscionability of a premarital or pre-civil union agreement shall be determined by the court as a matter of law.

Notably, in litigation regarding premarital agreements, courts generally do not pass on whether the agreement was fair and equitable so long as the parties had sufficient opportunity to reflect on entering into the agreement, were informed when doing so and had access to independent legal advice, meaning separate attorneys for each party. Indeed, premarital agreements have been enforced even when one spouse receives a disproportionate share of the other parties' assets because, prior to entering into the agreement, the parties engaged in full disclosure of earnings, property and financial obligations. Additionally, decisions in this area of law have provided that, absent highly unusual circumstances, the parties to the agreement determine what is fair and equitable, not the court. An example of a highly unusual circumstance that would compel the court to interject is when one party to the premarital agreement became "destitute or a public charge" as a result of the provisions within the agreement.

As demonstrated above, it is extremely important that prior to entering into the premarital agreement, each prospective spouse obtain separate counsel and, through counsel, participate in a comprehensive exchange of each parties' financial information. Typically in practice, each party's attorney will exchange what is known as a "Schedule of Assets and Liabilities", as well as recent tax returns, to demonstrate their full and complete disclosure of earnings, property and financial obligations. To ensure the enforceability of a premarital agreement, the "Schedule of Assets and Liabilities" should include the amount, character and value of each asset so as to provide each spouse with a true understanding of his/her property or financial obligations and a detailed sense of how much he/she is worth. The only exception to this rule is an express waiver, in writing, to "any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided," as specifically stated in the Uniform Premarital and Pre-Civil Union Agreement Act.

It is important to note the Uniform Premarital and Pre-Civil Union Agreement Act was amended on June 27, 2013. Prior thereto, the statute provided that premarital agreements were unenforceable if they were unconscionable at the time the party sought to enforce the agreement, which has been modified to the time the agreement was entered into. Additionally, the definition of unconscionability was defined. The amendment applies to all agreements entered into on the date of the amendment and thereafter, as well as agreements entered prior to the amendment but later revised, in accordance with the statute, on the date of the amendment or thereafter.

In light of the above, parties should only enter into premarital agreements voluntarily after consulting with independent legal counsel and accurately disclosing all assets and liabilities to one another or, in the alternative, expressly waiving in writing the parties' right to disclosure of same.