In 1988, the New Jersey Legislature adopted the Uniform Premarital Agreement Act, permitting parties to enter agreements prior to marriage and providing for the contents of those agreements. The law was amended in 2006 to include pre-civil-union agreements within its purview.
Generally, a party seeking a judicial declaration that an agreement is not enforceable must prove by clear and convincing evidence (1) that an agreement was executed involuntarily; or (2) was unconscionable at the time enforcement was sought; or (3) that before execution there was not a fair disclosure of income, property and financial obligations of the other party; or (4) that the party challenging enforceability did not waive in writing full disclosure in favor of a limited disclosure of property and financial obligations; or (5) did not have knowledge of the property and financial obligations of the other party; or (6) did not consult independent legal counsel.
An unconscionable agreement under the statute is one that, due to either lack of property or unemployability, 1) would render the spouse or partner without a means of reasonable support; or 2) would render the spouse or partner a public charge; or 3) would provide a standard of living far below that which was enjoyed before the marriage or civil union.
For the past two decades, our courts have reconciled that statutory scheme with our law governing postmarital agreements by permitting the unconscionability analysis to be determined by the court, as of the time a challenge to enforcement is sought. That reflects our public policy choice to treat marital and civil-union contracts differently than other commercial and noncommercial contracts, which ordinarily will only be declared unconscionable based on the circumstances existing at the time of execution.
There are good reasons for that differential treatment. Matrimonial and civil-union agreements arise out of the unique nature of the familial relationship and the public policy implications of pauperizing a former spouse or making her or him a public charge after years of laboring together in the marital vineyards.
Pending in the Legislature is a bill (S-2151) that would limit any unconscionable challenge to a premarital agreement to the circumstances existing at the time of execution. No longer would a spouse or civil partner be permitted to challenge enforceability based upon unconscionability at the time that enforcement is sought. In reality, the new bill renders the existing statute toothless, except in those few situations where execution has been flawed due to noncompliance with the statutory prerequisites required at the time of execution.
The bill statement sets forth the rationale for the amendments: “This can be many years after the agreement was originally executed. The bill eliminates this basis for setting aside an agreement and provides instead that it will not be set aside unless it was unconscionable when it was executed (i.e., when the parties signed it).”
But the passage of time is the critical path to our present jurisprudential stance. Indeed, an entire body of matrimonial law has evolved with regard to modification of existing court orders and property-settlement agreements under the standards enunciated in Lepis v. Lepis and it’s progeny. Those decisions are predicated upon a substantial change of circumstances, most of which occur years after execution of a property settlement agreement or court order. That approach evolved because what is fair, just and reasonable at the time of execution frequently is not so 10 or 20 years later.
Although the enforceability standards for premarital agreements differ in name from postmarital property settlement-agreements, the impact is the same. It may be that the Legislature would be better served by providing for a statutorily mandated expiration date for premarital agreements — the idea being that after the expiration date, the parties would then be subject to the matrimonial laws that resolve issues of alimony, child support, equitable distribution, legal fees and custody, by way of example. Failing that, treating premarital and postmarital agreements differently makes no sense to us.