You're getting divorced. There's a prenuptial agreement. And now that you've read what it actually means for you financially, you're thinking: "This isn't fair. Can I get out of it?"
Maybe. But there's something important you need to understand: The fact that a prenuptial agreement seems unfair to you today doesn't necessarily mean a New Jersey court will refuse to enforce it.
Prenups are generally taken seriously in New Jersey, and the person trying to set one aside has a significant burden. So the real question isn't simply: "Is my prenup unfair?" It's: "Is there a legal basis for challenging my prenup under New Jersey law?"
Can You Challenge a Prenup in New Jersey?
Yes. A prenuptial agreement isn't automatically enforceable simply because you signed your name at the bottom. But New Jersey law establishes specific grounds for challenging one.
The person asking the court to set aside the agreement has the burden of proving that it is unenforceable by clear and convincing evidence. That's an important point. You don't start with the assumption that your prenup is invalid and require your spouse to prove otherwise.
If you're challenging it, the burden is generally on you.
What If You Didn't Sign the Prenup Voluntarily?
One basis for challenging a prenuptial agreement is that you didn't execute it voluntarily. That's more complicated than simply saying: "I didn't really want to sign it."
Most people negotiating a prenup probably don't love every provision in the agreement. The question is whether the circumstances surrounding the execution of the agreement support a legal claim that it wasn't voluntary.
That's why I want to know exactly what happened before you signed. When did you first receive the agreement? How much time did you have to review it? What was said to you? Were there threats or extraordinary pressure? Did you have an attorney? Were changes discussed? What happened immediately before you signed? These details matter.
Did You Know What Your Future Spouse Owned?
Financial disclosure can be extremely important when evaluating a prenuptial agreement.
Before signing, did you receive full and fair disclosure of your future spouse's earnings, property and financial obligations? If your future spouse owned businesses, investment accounts, real estate or other substantial assets, were those disclosed? Did you know what you were potentially giving up?
You can't necessarily sign an agreement, later become unhappy with it and invalidate it simply by saying: "I didn't know exactly how much my spouse was worth."
New Jersey law also considers whether disclosure was waived in writing and whether you otherwise had adequate knowledge of your future spouse's property and financial obligations. So once again, we need to examine what actually happened.
Did You Have Your Own Lawyer?
Independent legal counsel can also be an important issue. Ideally, each person considering a prenuptial agreement has the opportunity to consult with his or her own attorney.
Your future spouse's lawyer isn't your lawyer. That attorney isn't there to tell you whether the agreement protects your interests. But the absence of your own attorney doesn't automatically make every prenup unenforceable.
New Jersey law also addresses situations in which someone voluntarily and expressly waives, in writing, the opportunity to consult with independent legal counsel. So if you're challenging an agreement years later, I want to see the actual document and understand what happened when it was negotiated and signed.
What Does Unconscionable Mean?
This is where people sometimes misunderstand New Jersey prenup law.
They'll tell me: "The agreement is completely unfair. That means it's unconscionable." Not necessarily.
“Unconscionable” is a legal concept. It doesn't simply mean that you don't like the deal anymore or that one spouse received substantially better financial protection than the other.
Under New Jersey's current statutory framework, the analysis of unconscionability focuses on circumstances surrounding the execution of the agreement, including financial disclosure, knowledge of the other person's finances, and the opportunity for independent legal counsel.
So don't assume that an unequal agreement is automatically an unenforceable agreement. Those are two different questions.
What If the Prenup Leaves You With Much Less?
This can be one of the hardest things for someone to accept.
Suppose you were married for 20 years. Your spouse accumulated substantial wealth. Now you're getting divorced and the prenup says that much of that property remains your spouse's. You may look at the result and think: "How can that possibly be fair?"
But the fact that the agreement produces a result you strongly dislike at the time of divorce doesn't, by itself, establish that the agreement is unenforceable. We need to go back to the circumstances surrounding the agreement.
What did it say? What was disclosed? What did you know? Were you represented? Did you waive representation? Did you sign voluntarily? Those questions may be much more important than whether you now regret the bargain.
What If Assets Were Hidden Before You Signed?
This is a different issue.
Suppose your future spouse disclosed $2 million in assets before the marriage. Years later, during the divorce, you discover evidence that your spouse actually owned considerably more and significant assets weren't disclosed. That could raise a very different question from simply arguing that the agreement turned out to be unfair.
Financial disclosure is specifically relevant under New Jersey's premarital-agreement statute. If you're concerned that important assets, income or financial obligations weren't disclosed, gather whatever documents you still have from the time the agreement was negotiated. Don't rely solely upon your memory if records are available.
Does Signing Right Before the Wedding Make a Prenup Invalid?
Not automatically. People sometimes assume that a prenup signed shortly before the wedding must be invalid.
Timing can certainly be relevant to understanding whether an agreement was entered voluntarily, but there isn't a simple rule that says: "Signed X days before the wedding = invalid." The surrounding circumstances matter.
For example, a New Jersey appellate case upheld an antenuptial agreement that had been signed nine days before the marriage. So I wouldn't evaluate your agreement based upon the calendar alone. I'd want to know the entire story.
Can a Judge Just Decide the Prenup Is Unfair?
Don't count on that. Challenging a prenup isn't simply an invitation to ask the divorce judge to rewrite a deal that now looks bad.
New Jersey law places the burden on the person seeking to set the agreement aside. And that burden is significant.
That's why one of the first things I would do is obtain the agreement itself, along with any schedules of assets, financial disclosures, drafts, emails, correspondence with attorneys and other records from the time it was negotiated. Before deciding whether you have a strong challenge, we need to know what the evidence actually shows.
Don't Assume Your Prenup Is Untouchable
There's another mistake I don't want you to make. Don't assume that because you signed a prenup, there is absolutely nothing your divorce lawyer can do. If you're concerned about the agreement, have it reviewed.
Maybe it's enforceable. Maybe there are legitimate questions about how it was executed. Maybe the financial disclosure was inadequate. Maybe there's a dispute over what a particular provision actually means. Or perhaps the agreement doesn't cover an asset or issue you assumed it covered. Those are questions worth answering before you make major decisions about your divorce.
Start With the Agreement
If you have a prenup and you're considering divorce, find a complete copy of it. Then gather whatever records you still have from when it was prepared.
Don't begin with: "This is unfair, so a judge won't enforce it." And don't begin with: "I signed it, so I'm stuck with everything it says."
Neither assumption is particularly helpful. Start with the agreement. Start with the financial disclosures. Start with the circumstances surrounding how it was negotiated and signed. Then determine whether there is actually a legal basis to challenge it.
If you're preparing for divorce and want to understand the other financial and legal issues you should be considering, my free Divorce Smarter Course will walk you through the major decisions involved in a New Jersey divorce.
Until next time,
Steve