Premarital agreement, or prenuptial agreement, commonly known as a "prenup", is a written agreement between two people prior to marriage as to what their property and support rights will be when their marriage ends. It is a legal contract that permits the parties— not the courts — to decide their financial fate when the marriage ends. All marriages must, as a matter of law, come to an end by an annulment, divorce or when one spouse dies. Therefore, it is very likely that the terms of a prenuptial agreement will eventually come into play in determining the assets and obligations of the spouses.
If you do not have a prenuptial agreement, a New Jersey court determines who owns the property that you acquire during your marriage, and what happens to that property at divorce or death. The court may even decide what happens to some of the property you owned before you were married. Similarly, the court will also decide what you owe your spouse.
Marriage, like a prenuptial agreement, is a legal contract between the bride and groom, and with the contract of marriage comes certain automatic property rights for each spouse. For example, without a prenuptial agreement, a divorcing spouse usually has the right to share ownership of property acquired during marriage; incur debts during marriage that the other spouse may have to pay for, and share in the management and control of any marital or community property (sometimes including the right to sell it or give it away).
A prenuptial agreement is a very important part of wealth preservation and asset protection planning. Prenuptial agreements are very powerful legal instruments that will control the distribution of property when the marriage ends. Prenuptial agreements are occasionally beneficial for first marriages where one spouse has acquired property or wealth prior to the marriage, or where a substantial family inheritance is anticipated. Prenuptial agreements are especially beneficial for second marriages or marriages later in life because they protect separate property and can greatly reduce the cost of attorney's fees that might be incurred fighting about the property should there be a divorce.
Protecting one's property for children of a former marriage is a common reason for a prenuptial agreement. An effective prenuptial agreement can prevent unseemly and expensive lawsuits between the surviving spouse and the decedents. It can also protect one party from his or her spouse's attempts to set aside gifts that the party may have made to his/her children or other third parties during marriage.
Prenuptial agreements can also protect one spouse against the premarital debts and obligation of the other spouse. For example, if the husband is coming into the marriage with outstanding tax liabilities, support obligations to a former spouse or children, a pending lawsuit, debts to other creditors, or other real or potential financial obligations, a premarital agreement may be helpful in protecting the new wife's property or earnings from the husband's creditors.
Attorney Veronica Norgaard has assisted numerous New Jersey clients in drafting prenuptial agreements. For more information, or for a free consultation with a lawyer, contact her online in New Brunswick, New Jersey, or by calling 732-226-7619.