While most folks have heard of a prenupt, few are familiar with a postnuptial agreement. As a New Jersey Divorce Attorney, I am not a big fan of such agreements. This is because I have successfully had so many thrown out of a New Jersey Family Court on many occasions. How did I do that? Let’s explore.
In my piece “What Do I Need To Know About New Jersey Prenups?” I discuss the laws governing the premarital agreement. Pursuant to N.J.S.A. 37:2-32, a prenup is an agreement between potential spouses made in consideration of marriage and effective upon the marriage itself. The subject matter of a prenup usually varies from agreement to agreement; however, it is extremely common that the agreement will include provisions for division of property and child/spousal support in the event of a divorce. While I realize that many of my clients know in advance what a prenup is, several do not know that there exists a similar agreement for post-marriage.
What is a postnuptial agreement?
A postnuptial agreement is a contract just like a prenup that the two parties enter into with each other. The main difference though is that a postnuptial agreement is entered into after the parties are married, thus “post-nuptial.” Similar to a prenup, a postnup is typically executed for monetary reasons. If one of the parties has a change in jobs or inherits a large amount of money, it is common to draft a postnup to reflect these financial changes in the marriage. Like a prenup, once drafted, the postnup will outline for the parties who is entitled to what share of say the inheritance for example.
Furthermore, I always get asked the question “can we address the issue of child custody in a postnup?” The answer to that question is no, plain and simple. Children are not “assets” to be inserted into such an agreement.
What is required to enter into a postnuptial agreement?
If both parties willingly enter into a postnup, without duress or coercion, it typically will be valid under New Jersey law. A few other requirements will usually include (1) the agreement must be in writing; (2) the agreement must be notarized; and (3) the agreement must be done with fair disclosure between the parties.
Who can enter into a postnuptial agreement?
New Jersey is not very restrictive when it comes to allowing couples to enter into postnuptial agreements. If you and your spouse already have a prenup and need to modify it, you can do this by entering into a postnup. On the other hand, if you don’t already have a prenup, but started thinking that you and your spouse should have a document drafted like this, you can execute one. Postnups are especially useful to couples in the event of a divorce because then any assets or money acquired during the marriage will be allocated for in the postnup, saving a lot of time during the equitable distribution phase of divorce.
What case law governs postnuptial agreements in New Jersey?
The leading case addressing postnuptial agreements in New Jersey is Pacelli v. Pacelli, 319 N.J. Super. 185 (App. Div. 1999). A couple entered into a postnuptial agreement to resolve issues of equitable distribution and alimony in the event of a divorce. Id. The trial court found that the agreement was in fact enforceable upon the couple’s divorce. However, the appellant wife challenged the trial court’s decision, alleging that she entered into the agreement upon coercive circumstances and that it was an unfair agreement on its face. She claimed that her husband threatened her with a divorce unless she entered into the postnup that he had his lawyer draft.
The Superior Court held that “agreements made at the end of a marriage in contemplation of a divorce and to fix each party’s economic rights on entry of a divorce judgment are enforceable if fair and equitable.” Id at 190. It stated that the way in which the Mr. Pacelli went about the postnup was inherently coercive. Mrs. Pacelli had merely entered into the agreement to avoid a divorce and to “preserve the family.” Id. Furthermore, the Court found the agreement to be unfair on its face. The appellant was not being treated fairly in terms of a division of money and assets.
As a New Jersey Divorce Lawyer, after I am done explaining the pros and cons of a postnuptial agreement, they usually decide against it. Simply put, there is simply too much exposure of having the documented thrown out of court to justify the legal fees, time, energy and inevitable stress required. Furthermore, and this is my professional and personal opinion, if a marriage is in such rough shape that a postnuptial agreement is even necessary, the relationship is likely at or very close to near end state.
If you would like to learn more about a postnuptial agreement or are considering a New Jersey divorce, please contact my office so we may discuss. Thank you.