What You Need to Know About Postnuptial Agreements in New Jersey

No one enters into a marriage with the expectation that it will fail. Unfortunately, many marriages do end in divorce, causing a widespread need for and discussion surrounding the protection of premarital assets. While many spouses pursue premarital agreements, an agreement that is entered into before marriage addresses how property will be divided if there is divorce, they can also enter into a postnuptial agreement. Although a postnuptial agreement also addresses how property will be divided in the instance of a future divorce, the agreement is constructed and signed after the couple is already married. In fact, because the couple is already married, a postnuptial agreement may be a better avenue because they will likely have a better understanding of their finances, debts, and wishes as a married couple.

Why Choose a Postnuptial Agreement?

New Jersey postnuptial agreements are a flexible alternative to prenuptial agreements, allowing spouses to enter into marital contracts after the wedding has taken place. They provide a tremendous advantage to New Jersey residents who want to craft their own agreements and avoid court proceedings rather than having a judge decide everything for them. Postnuptial agreements are legally enforceable contracts and allow couples to redefine their property division, address issues like debts and property losses, as well as any other family issues that may arise in marriage. This can be particularly helpful when a significant change in circumstances occurs, such as the birth of children, or a large life-changing event, such as an inheritance or job loss.

While a premarital agreement has a somewhat precautionary mindset to mitigate a divorce, a postnuptial agreement is often used by spouses who have encountered marital difficulty but are seeking to work things out. Many times, spouses that encounter difficulties will enter into a postnuptial agreement just to prevent a lengthy and exhausting divorce process, should their marriage fail.

In this way, postnuptial agreements serve a different function than prenuptial agreements because they help couples navigate complex issues that arise during their marriage that they did not or could not have foreseen before saying I do. Aside from the flexibility that they provide, postnuptial agreements may be easier to complete than prenuptial agreements because, at this point, the couple will likely have more insight into their finances, debts, shared responsibilities, etc., than they had prior to marriage.

It also goes without saying that a postnuptial agreement may be far less dramatic and uncomfortable than drafting a prenuptial agreement amid wedding planning. Planning for failure while picking out china patterns can tend to undermine the romance that is unique to the engagement period. If the couple agrees that they would like to draft an agreement at some point, waiting to do so until after the wedding may also keep emotions and expectations at bay.

Pro And Con: Postnuptial Agreements Must Be Fair

A postnuptial agreement may be subject to stricter standards of “fairness” than a prenuptial agreement would be. This is because spouses owe each other a certain level of respect and duty to act in each other's best interests, known as their “fiduciary duty.” In New Jersey, a spouse's fiduciary duty begins at the moment the couple marries and exists until the point the couple is divorced, and all of their property is distributed and divided per the terms of the divorce judgment.

Although the term fiduciary duty is not commonly used outside of a legal setting, it simply means that spouses are required to act solely in the other's best interest rather than out of their own self-interest or in direct competition with their spouse. In acting in their spouse's best interest, they must also refrain from certain activity that jeopardizes the other's well-being. Some examples of breaching fiduciary duty might include:

  • Fraudulent activity;
  • Failure to disclose certain financial information;
  • Use of martial property to conceal and or pay off individual debt without spousal consent; and
  • Sharing confidential information without spousal consent;

In instances where a postnuptial agreement is inherently unfair, and the court determines that one or both spouses have breached their fiduciary duties, this may invalidate their agreement rendering it unenforceable.

What Does a Postnuptial Agreement Cover?

Postnuptial agreements are meant to cover the same aspects of the marriage that a prenuptial agreement would normally cover. These include:

  • Separate property versus marital property;
  • Property division in the instance of a divorce;
  • Joint purchases;
  • Future spousal support obligations, including alimony and/or any waiver of support that the couple may agree on;
  • Inheritable property through a trust or will;
  • Benefactors of any life insurance policy;
  • Business interests and/or ownership help jointly or individually by one of the spouses; and
  • Specific issues and obligations pertaining to the spouses.

The Agreement Will Not Cover Custody or Child Support

Prenuptial agreements and postnuptial agreements may provide for what happens to assets and debts in a divorce, but when it comes to child custody or support, these agreements are limited and unenforceable. Although many couples may wish to address custodial agreements in a postnuptial agreement now that they have had children, New Jersey courts will not enforce any postnuptial agreement that addresses custodial and/or child support agreements regardless of whether it addresses the couple's existing or future children.

Although this may seem frustrating because oftentimes, custodial disagreements are one of the biggest sources of drawn-out divorce litigations, courts look to the current family dynamic and needs of the child when deciding custodial issues. In this sense, the court is better able to make a proper determination of what is truly in the child's best interest at the time the couple divorces than the couple could make on their own potentially years prior.

We Already Have a Prenuptial Agreement. Can We Still Pursue a Postnuptial Agreement?

Yes. The couple might enter into a postnuptial agreement even if they had already signed a premarital agreement. The subsequent postnuptial agreement will supersede the prior prenuptial agreement. Of course, the initial prenuptial agreement may serve as a building block for the new postnuptial agreement.

The couple can also continue to fine-tune and edit their postnuptial agreement in the years that follow. Oftentimes as business interests develop, inheritances are received, or retirement benefits matriculate, the couple may choose to address these new issues in an updated version of their postnuptial agreement. At this juncture, the couple would simply need to work with their attorney to update the agreement to reflect their current desires.

Validity of Postnuptial Agreements

Even though postnuptial agreements are entered into after marriage, New Jersey has certain prerequisites that must be met for one of these agreements to be considered valid. These include:

  • Both spouses must fully disclose their assets;
  • Both spouses must enter the agreement of their own accord;
  • Both parties must have legal counsel; and
  • Both Parties must act in accordance with the martial fiduciary duty to one another

While a postnuptial agreement may be drawn up and signed, if a couple decides to divorce, one of the spouses may challenge the agreement. Agreements can be challenged on the grounds that the prerequisites for the agreement have not been fulfilled or that the agreement made was somehow unconscionable to one of the parties. If the postnuptial agreement is unfair, or if it favors one spouse heavily over another, it may be challenged in court. Typically, the court will hold a hearing on the matter where both sides will be allowed to present evidence, such as testimony, documents, records, communications, etc., that support their argument as to why the agreement should or should not be enforced. While either spouse can challenge the agreement in court, the challenger must use evidence and argument to prove their case. If you are a party to a postnuptial agreement and feel you have either been unfairly taken advantage of or that the agreement did not accurately reflect your conversations with your current or past spouse, attorney Joseph D. Lento can help.

Don't Be Left Unprepared, Work With a Family Law Attorney Today

You may already be married with a prenuptial agreement that now needs some fine-tuning, or you may have chosen to wait altogether to draft an agreement until you are married. In any event, a postnuptial agreement can provide structure, avoid costless litigation, and be drafted at a point in time when both spouses are content in their relationship and acting with a clear mindset rather than out of spite or despair. If you need assistance drafting a postnuptial agreement in New Jersey, contact qualified Family Law attorney Joseph D. Lento and his Family Law Team at the Lento Law Firm by calling (888) 535-3686 or by reaching out to us online.

Contact a Family Law Attorney Today!

Attorney Joseph D. Lento has more than a decade of experience practicing Family Law in New Jersey. If you are having any uncertainties about what the future may hold for you and your family, contact our offices today. Family Law Attorney Joseph Lento will go above and beyond the needs for any client and fight for what is fair.

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