Couples prepared to enter into marriage set expectations based on a lifelong relationship. The fact remains, however, that approximately half of marriages end in divorce. Although they have declined in years, divorce rates may trigger “What if…?” questions of life without marriage. An increasingly common tool to address the financial, legal, and emotional issues prior to a divorce, a premarital agreement prepares for the worst-case scenario.
What issues does a typical agreement address?
Primarily, a premarital agreement establishes the property and financial rights of each spouse upon divorce. Once thought to be only for the wealthy and celebrities, these documents can address a wide-ranging scope of issues specific to the prospective spouses. All agreements must include a clause stating that each party has provided information honestly and with transparency. Common issues contained in a premarital agreement include:
- Financial Matters: Distribution of assets agreed upon at the outset can alleviate stress and confrontation if divorce happens. In the absence of an agreement, courts in New Jersey will use equitable distribution to divide the assets
- Debt Protection: Each spouse may enter the marriage with different types and amounts of debt, e.g., student loans. A premarital agreement separates responsibility for those debts as well as those incurred during the marriage.
- Property Disposition to Children of Prior Marriages: While New Jersey ranked lowest among remarriages in data compiled by the U.S. Census Bureau, there remain important issues regarding property and assets to resolve prior to divorce rather than after.
Age, income and debt levels, children and lifestyle contribute to the number of issues within the agreement. Ideally, the provisions of these agreements will never take effect. An attorney who is familiar with the most contentious issues of a divorce can provide guidance.
