Hidden Issues in a Prenuptial Agreement in New Jersey
November 22, 2019
BY: Amanda Yu
Is a prenuptial agreement a good idea?
Prenuptial agreements certainly are not what one would identify as a “romantic” idea. Many people believe that entering into prenuptial agreements is bad luck because they are based upon their assumption that the marriage will end. However, I strongly believe they are actually very beneficial, and can help build a stronger foundation for a successful marriage.
Most people know that these are agreements that couples enter into prior to marriage to address their assets, liabilities, and other aspects of financial support. The only issues that cannot be addressed in a prenuptial agreement are those regarding the custody and support of children not yet born. Here are three issues that you probably did not realize can be addressed in a prenuptial agreement:
Choice of Law
Everyone knows that the future is uncertain. Perhaps you believe that you don’t need a prenuptial agreement in New Jersey to protect your rights in the event of a divorce. However, in the event you and/or your spouse relocate to a different state and thereafter file for divorce, you may encounter legal issues that you otherwise did not contemplate at the time of your wedding. Or, there may be a sweeping change in the law that directly affects you and your spouse. None of these changes to the legal landscape can be predicted at the time of your wedding, but you can bargain for it in your prenuptial agreement. For example, you can agree that a certain state’s law will apply to the issues arising from your divorce, even if neither party lives there at the time of the divorce. Entering into a prenuptial agreement gives you and your future spouse the opportunity to choose the law that will govern your potential divorce.
Finances During the Marriage
A prenuptial agreement can also address how sole and joint debts are paid off during the marriage. For example, you and your future spouse may agree that, during the marriage, each party will be responsible for paying for certain expenses. Or, you and your future spouse may agree that a certain percentage of your respective incomes will be deposited into a joint account to be used for specific joint expenses. Or, if only one spouse earns an income, that income-earning spouse must provide a certain amount of money for the other spouse per month during the marriage for sole expenses.
Basic Estate Planning
Although a prenuptial agreement in New Jersey cannot predetermine child custody or child support for existing or future children, they can assist in formulating a plan to voluntarily support existing or future children. For example, if you, your future spouse, or both of you have children from a prior relationship, you and your future spouse may agree as to continued support for those children or delineating specific assets that will pass on to those children. If you have existing assets that you already know you want your existing or future children to have at a later date, you can specifically indicate this in your prenuptial agreement and excluding these assets from the marital estate.
Even if you decide against entering into a prenuptial agreement in New Jersey, I believe any couple contemplating marriage should discuss a prenuptial agreement. The proper process for entering into a prenuptial agreement involves and includes financial disclosure by each party. Being forced to have an open and honest conversation about your financial future is incredibly beneficial.