Edward R. Weinstein, Esq.

Is My New Jersey Prenuptial Agreement Enforceable?

“Is my Prenuptial Agreement enforceable in New Jersey?” After 2 decades as a divorce attorney, many times I have had a new client nervously utter this question. My answer is always “it depends.” I then begin my legal analysis that is consistent with past case law as well as New Jersey’s Uniform Premarital Agreement Act.

PRENUPT

Section 37:2-38, a prenupt can only be set aside if one of the following can be proven:

(1) The party executed the agreement reluctantly;
(2) The agreement was unjust at the time the enforcement was sought; or (3) That party, before execution of the agreement:
a. Was not provided full and fair disclosure of the earnings, property and financial obligations of the other party;
b. Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party;
c. Did not have a sufficient knowledge of the property or financial obligations of the other party; or d. Did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.

If a party can prove that any one of the aforementioned criteria is true, a court will likely set aside the prenupt and render it unenforceable. However, absent such proof, the premarital agreement will likely be enforceable. This was illustrated in the recent case of Guido v. Guido.

In Guido, the parties married in 1992. They signed a prenuptial agreement nine days before the wedding. Additionally, both parties had their independent counsel look over the agreement before either party signed. At the time of the wedding, the wife was twenty-three and the husband was twenty-eight. She was a college graduate while he was a recent law school graduate, came from a wealthy family, and worked in his family business.

When the parties signed the prenupt, they both voluntarily accepted its terms and entered into it “with the full knowledge of the extent and approximate present value of all the property and estate of the other.” Also, both parties had independent counsel, which reviewed the agreement.

The prenupt provided the following stipulations:
1. The wife would receive half of the proceeds from the sale of the marital home if she remained married to the husband for at least five years 2. The wife would forfeit equitable distribution and alimony in exchange for a lump sum, depending on how long the marriage lasted 3. The wife acknowledged that certain business interests acquired by her husband might increase in value; however, she would waive her right to equitable distribution of the increase in value

In 2012, the husband filed for a divorce and sought to have the prenupt enforced. The couple’s net worth at that time was $14,835,843. But of course, the wife sought to have the prenupt invalidated. She stated that she contributed to the marriage throughout the years while her husband was out partying and spending the money on unnecessary things. She also was financially dependent upon her husband and could not possibly maintain the same standard of living after the divorce if the prenupt was enforced.

The trial court found that the prenupt should be enforced. It was not a product of fraud, nor was it unconscionable in any way. Yet, the wife appealed. On appeal, she argued that she would never be able to maintain her marital lifestyle if the prenupt was enforced. She also alleged that she did not want to sign the prenupt, but was confronted merely nine days before her wedding with the paper.

The New Jersey Appellate Division affirmed the findings of the lower court though. It held that the prenupt was definitely not unconscionable. Not only was the wife fully capable of reading and understanding the terms of the agreement, but she also hired independent counsel to review it as well. Furthermore, the court held that she would be walking away from the marriage with $2.5 million, a figure that was sufficient to maintain a high quality of living. The wife would receive half of the proceeds from the sale of the marital home, half of the furniture and furnishings from the marital home, $355,000 in retirement assets, half of a MetLife pension plan, a vintage Porsche, and a lump sum of $780,000. The court noted that although the wife was used to living more lavishly, the decrease in her lifestyle was definitely not enough for the prenupt to be set aside.

Furthermore, the Appellate Division held that the wife failed to show that she entered into the agreement without full and fair disclosure. Instead, the court found that she was completely aware of her husband’s net worth and still waived her rights to equitable distribution and alimony.

Whether or not a prenupt will be enforceable depends on the facts surrounding each unique case. If you are hesitant about signing a prenupt (or you have already signed one), please contact my office today. At the Law Offices of Edward R. Weinstein, it is our goal to protect our client’s rights so that they are treated equally and fairly. Thank you