While some might say that a prenup is unromantic, this agreement with your spouse, created with the help of an attorney, can protect your assets in the event of a divorce. In this podcast family lawyer Bari Zell Weinberger discusses the importance of a prenuptial agreement in New Jersey, and how it can save you time, stress, and money if you and your spouse decide to divorce.
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Hosted by: Diana Shepherd, Editorial Director, Divorce Magazine
Guest speaker: Bari Zell Weinberger, Certified Matrimonial Law Attorney
Bari Zell Weinberger is a renowned family law expert and the founder of Weinberger Divorce & Family Law Group, a family law firm with offices throughout New Jersey. She is Certified by the Supreme Court of New Jersey as a Matrimonial Law Attorney, a certification achieved by only 2% of the attorneys in New Jersey. Bari is also an experienced family law mediator, a published author, and a frequent media contributor on divorce and family law for both local and national audiences.
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Read the Transcript of this Podcast Below.
There are a lot of misconceptions about prenuptial agreements. What should couples know about these agreements before they get married?
Some may argue that it’s unromantic or pessimistic, but marriage is a contract. A prenuptial agreement is one of the smartest financial decisions you can make. Maybe you have a family business or you plan to give up your job when you have kids. A prenuptial agreement is a legal document signed off on by a couple before their marriage that addresses issues such as property and assets brought into the marriage by each person, and about what the property rights of each should be when they get divorced.
A prenup can spell out alimony amounts the couple agrees to in the event of a divorce and also how certain behaviors, such as cheating, can affect the conditions of a divorce. In reality, having a solid prenuptial agreement can give you a greater piece of mind in your marriage, which is an important key to a long and happy union.
What types of people benefit from a prenup?
Many. Let’s say you’ve been married and divorced before. Practically speaking, if you’ve already been through a divorce, then you probably already know that the more organized and clear-cut your finances are as a couple, the easier it is for a divorce settlement to be reached. A prenup can help you achieve this. Now let’s say that you have kids from a previous marriage or relationship. If you have assets that you plan to someday give your children, getting married may complicate whether those assets would need to be divided if the marriage ends in divorce.
Establishing a prenuptial agreement is a way for parents to make sure assets and property intended for children are kept intact. Now let’s say you want to be a stay-at-home parent. If you’re leaving your career to stay at home with the kids, making decisions beforehand about spousal support can provide peace of mind that if your situation were to change, you would be financially protected.
There are situations where one person is the wealthier or not as wealthy as the soon-to-be parent. If you are entering a marriage with considerable assets, executing a prenuptial agreement is a way to protect these assets from being divided in the event of a divorce. However, a prenup for the less asset-rich spouse can be equally important in terms of negotiating for a spousal support amount and the other assets as well, such as living accommodations even that will allow you to continue the same lifestyle you enjoyed during the marriage.
There are also cases when both spouses are high earners. If you already have a home and a retirement plan and your soon-to-be spouse, likewise, has ample savings, you may want to come to an agreement that these financial resources be kept separate from marital assets.
A common prenup scenario is when one party owns a business. A prenuptial agreement can protect the family business from being subject to equitable distribution should a divorce occur in the future. Also, we see situations where one party is poised to begin a new career. For instance, are you the main breadwinner right now as you support your fiancé through medical or professional school? A prenuptial agreement can spell out terms of spousal support based on projected future salaries and income levels. Also take into account support by one spouse to make the other spouse’s lucrative career possible.
What does the process of creating a prenuptial agreement entail?
First, all prenuptial agreements in New Jersey must be in writing and signed by both spouses to be considered valid.
Second, the prenup must also include a statement of assets and liabilities attached to the agreement. The purpose of the statement of assets and liabilities is to guarantee fair and reasonable disclosure of each party’s financial information because misleading a prospective spouse about assets or liabilities at the time of entering into the prenup can be a basis for invalidation of the agreement.
Third, there should also be language in your prenup that you’re entering into the agreement freely and without coercion or pressure from anyone else, including your fiancé. If you’re feeling that you’re being strong-armed into the agreement, you should not enter into it.
Fourth, under every circumstance both parties must have independent counsel representing their interests. Both of those attorneys have to sign the agreement with the parties that they are representing. If there’s no independent counsel, the document automatically fails. The parties need to keep in mind that after the marriage, the premarital agreement may be amended or revoked only by written agreement signed by both of the parties.
What are the common assets included in a prenup?
- Real estate. For instance, let’s say you bought a house before you met your fiancé. After the wedding you intend to both reside in the home. In the event of a divorce, is this property a marital property or a separate asset? To avoid the gray area that family homes can fall into, creating a prenuptial agreement is an easy way to legally outline what will happen to the home in the event of a dissolution of the marriage.
- Business interests. To keep business ownerships and business shares from divorce asset decision, a prenuptial agreement can clearly define these types of investments and income as separate or it can outline the specific percent a spouse would be entitled to claim.
- Bank accounts and credit cards. If you have a significant savings account, perhaps containing inheritance funds, or you have a fiancé who made the mistake of overspending on his or her credit cards a few years back, a prenuptial agreement can specify these individual bank accounts and personal debt, that they remain separate in the event of a divorce.
- Personal property. If you have antiques or your personal collection of artwork, for instance, or even furniture that you bought well before the marriage, to avoid any confusion in the event of a divorce, outline ownership of personal property to avoid haggling and heartache down the road.
How can a prenuptial agreement protect assets earmarked for children from previous relationships?
If you have children from a previous relationship and know that you would like certain assets you own — such as money, stocks, furniture, or other property — to be inherited by these children, a prenuptial agreement can include language listing which specific property is to be kept separate for future interest.
How can a prenuptial agreement outline what happens to alimony?
In the event of a divorce, a prenuptial agreement can provide predetermined details for how much you will pay or receive in spousal support. The prenup can address what if one of you becomes ill and can no longer work over the course of your marriage. What if you or your spouse cheats? What about spousal income loss when one spouse stays home to raise the children?
In lieu of monthly payments, would a lump sum or equivalent, assigning over home ownership, for example, be an acceptable alternative? Many couples choose to make decisions about alimony now rather than fight about it later.
What can’t be included in a prenup?
The most notable exceptions are child-related matters, including child custody and child support. In New Jersey, the courts hold that a child’s best interest can only be determined at the time a child and support order is sought or a modified require is made, not beforehand. If spouses-to-be make an agreement about yet-to-be-born children and then divorce, there is a risk that whatever agreement they came to before marriage would not be in the best interest of the child.
For example, if a prenuptial agreement called for one parent to retain sole custody, but that parent was determined to be unfit at the time that custody was sought, it would create another layer of legal wrangling. It is for this reason that the courts will not allow for it.
In New Jersey, child support is ordered in the name of the child, not the adult parent. It’s considered outside legal bounds to have an agreement between two parties to include stipulations for a third party, even when that third party is the couple’s child.
What guidance can your attorney give you during this process?
Your attorney can give you feedback on terms you would like to see in a prenuptial agreement and work with you on making the language of the prenup as thorough and precise as possible. If your fiancé objects to certain terms, your attorney can provide alternatives and creative suggestions for making the document one that you both find acceptable while still protecting your best interest and helping you maintain positive relationships.
Your attorney can also help you make sure that you have provided full and fair disclosure of your earnings, property, and financial obligations. Your attorney can communicate with your fiancé’s attorney on the progress of the prenup, thus removing this burden from you.
Can you change your prenuptial agreement?
Yes, absolutely. Once you and your spouse are lawfully married and you decide that you want to change your prenup, all of the changes must be recorded in writing. Additionally, each party must sign the amended agreement acknowledging the new editions to the asset list or initial provisions.
Your attorney can help you with any changes that you make. Some prenups include even a sunset clause where certain provisions automatically terminate after a specific number of years of the marriage.
What special help can your firm provide people who are interested in pursuing a prenuptial agreement?
If you’re seeking a trusted family law attorney to work with you on your prenuptial agreement, please contact us today to set up your free consultation.