Does everyone know what a pre-nuptial agreement is? Well, if you don’t, it is an agreement signed before a marriage between the couple. In order for the agreement to be enforceable, it must comply with the NJ statute on pre-nups. That statute is for another blog. Here we are focused on an agreement signed between spouses AFTER the marriage. There is no statute that gives us requirements to follow, and generally these agreements are not enforceable.
The first time the courts considered mid-marital agreements was in the case of Pacelli v. Pacelli, 319 N.J. Super. 185 (App. Div.1999). At issue was an agreement presented to the wife, with limited financial disclosure, but under circumstances where she had no ability to negotiate the terms. Essentially, she had to ‘take it or leave it’ and she had no choice if she wanted to preserve her family. The court likened the agreement to a ‘reconciliation agreement’ and noted that in some circumstances a reconciliation agreement could be enforced if fair and equitable. The court did not go so far as to find that a mid-marital or reconciliation agreement was “inherently and unduly coercive” but did find that they should be closely scrutinized.
The court in Steel v. Steel, 467 N.J. Super. 414 (App. Div. 2021), had the occasion to consider an agreement reached shortly after the marriage. The trial court held that the agreement was a pre-nuptial agreement, because the negotiations started prior to the marriage, even though the agreement was not signed until after. The appeals court disagreed and summarized the different types of agreements and their relative enforceability as follows:
- Pre-nuptial agreements made in contemplation of marriage are enforceable if they are fair and just.
- Mid-marital agreements are generally unenforceable as they are inherently coercive.
- Property Settlement Agreements made at the end of a marriage at the time of a divorce proceeding to fix each party’s economic rights on entry of a divorce judgment are enforceable if fair and equitable.
The appeals court further made it clear that pre-nuptial agreements and property settlement agreements are analyzed with a predisposition in favor of them being enforced by the court. Whereas mid-marriage agreements are not. Essentially, there is more of an opportunity for there to be overreaching, fraud, or unconscionability with a mid-marital agreement.
If your spouse has presented you with a mid-marriage agreement or you are thinking about entering into such an agreement, contact our office for a consultation. The attorneys at Baker Legal Group are experienced in these matters and can provide you guidance on what may or may not be enforceable later in court.
Steel v. Steel
https://casetext.com/case/steele-v-steele-98
Pacelli v. Pacelli, 319 N.J. Super. 185 (App. Div.
1999)
https://casetext.com/case/pacelli-v-pacelli-1
NJ Prenuptial Agreement statute
https://law.justia.com/codes/new-jersey/title-37/section-37-2-34/