Prenups and Postnups for Estate Issues Only, And What Happens If The Parties Move to Another State?

By Sheryl J. Seiden, Esq.

1. Introduction

Given that every marriage will end in either divorce or death, parties can contractually agree to their rights upon the end of their marriage by entering into either a prenuptial, postnuptial agreements or reconciliation agreements. While the requirements for entering into these documents tend to be more stringent from a matrimonial perspective, the central consideration of both is full and fair disclosure, and, as such, courts have not had to determine if there is tension between the fields. This article examines how estate-related issues are addressed in prenuptial, postnuptial agreements and reconciliation agreements in New Jersey, the statutes that apply, and how courts have interpreted them. It also considers what happens when parties seek to apply those provisions in another state.

1. Prenuptial Agreements

In New Jersey, prenuptial agreements are governed by N.J.S.A. 37:2-31, also known as the Uniform Premarital and Pre-Civil Union Agreement Act. A prenuptial agreement is “an agreement between prospective spouses or partners in a civil union couple made in contemplation of marriage or a civil union and to be effective upon marriage or upon the parties establishing a civil union.” N.J.S.A. 37:2-32(a).

The requirements for a prenuptial agreement are that it “shall be in writing, with a statement of assets annexed thereto, signed by both parties.” N.J.S.A. 37:2-33. Further, a prenuptial agreement “is enforceable without consideration.” Id. A prenuptial agreement is valid if it includes the following: “full disclosure by each party as to his or her financial conditions, including the nature and extent of assets, income and anything else which might bear on the other party’s conclusion that the proposed agreement is fair, and his or her decision to enter into the agreement.”  Marschall v. Marschall, 195 N.J. Super. 16, 29 (Ch. Div.1984 – this is a prestatute case).

Prenuptial agreements in New Jersey are currently governed by the New Jersey Uniform Premarital and Pre-Civil Union Agreement Act, N.J.S.A. 37:2-31, et. seq., enacted on August 5, 1988. 

            “New Jersey adopted the Uniform Pre-Marital Agreement Act (the Act), N.J.S.A. 37:2-31 to – 41, in 1988.” Rogers v. Gordon, 404 N.J. Super. 213, 219 (App. Div. 2008).

A 2013 amendment to the Act eliminated N.J.S.A. 37:2-32(c). See L. 2013, c. 72, § 1. The amendment applied only to those agreements entered into, or amended, after the legislation’s effective date, June 27, 2013. L. 2013, c. 72, § 3. See N.J. Comm., Statement to S. 2151 n.3 (March 21, 2013) (“premarital . . . agreements entered into before the effective date would remain subject to the current law, which permits agreements to be set aside if deemed, at the time of enforcement, to be unconscionable”).

Under New Jersey law, prenuptial agreements are generally enforceable, assuming full disclosure and comprehension, and absent unconscionability. Rogers v. Gordon, 404 N.J. Super. 213, 219 (App. Div. 2008). Pursuant to N.J.S.A. 37:2-38, the party seeking to invalidate a prenuptial agreement must prove by clear and convincing evidence that “[t]he party executed the agreement involuntarily,” or the agreement is unconscionable. N.J.S.A. 37:2-38 provides, in pertinent part, a premarital or pre-civil union agreement shall not be enforceable if the party seeking to set aside the agreement proves, by clear and convincing evidence, that:

1. The party executed the agreement involuntarily; or
2. The agreement was unconscionable at the time enforcement was sought; or

1. That party, before execution of the agreement provides that an agreement is unconscionable if, before the execution, the party:

• Was not provided full and fair disclosure of the earnings, property and financial obligations of the other party;

• Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; or

• Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party; or

• Did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.

Prior to the enactment of the statute in 1998, common law governed the definition of “unconscionability.” The Court in Marschall defined an unconscionable agreement as one “which would leave a spouse a public charge or close to it, or which would provide a standard of living far below that which was enjoyed both before and during the marriage.” Rogers v. Gordon, 404 N.J. Super. 213, 219 (citing Marschall, supra, 195 N.J. Super. at 31).

In 1988, the Legislature adopted the Uniform Premarital Agreement Act (“UPAA”). The Act set forth, inter alia, that a premarital agreement may be deemed unconscionable at the time of enforcement. N.J.S.A. 37:2-32(c) if enforcement would:

1. Leave a spouse without a means of reasonable support;
2. Make a spouse a public charge; or
3. Provide a standard of living far below that which was enjoyed before the marriage.

P.L. 2013, c.72 went into effect on June 27, 2013, and it modified how prenuptial agreements are enforced, and importantly, it moved the benchmark of which point you analyze unconscionability.

The new enforcement provisions apply to agreements entered into on or after the effective date of the law or entered into before the effective date but voluntarily revised by the parties on or after the effective date in accordance with the procedures for amending agreements in N.J.S.A. 37:2-37. 

P.L. 2013, c.72 provides that an agreement shall not be deemed unconscionable unless it was unconscionable when executed because the party seeking to set aside the agreement.

• Was not provided full and fair disclosure of the earnings, property, and financial obligations of the other party;

• Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided;

• Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party;

• Did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with legal counsel.

N.J.S.A. 3B:8-1 defines the elective share to which a spouse is entitled. Prior to the amendment of the statute in 2023, it provided:

 If a married person or person in a domestic partnership dies domiciled in this State, on or after May 28, 1980, the surviving spouse or domestic partner has a right of election to take an elective share of one-third of the augmented estate under the limitations and conditions hereinafter stated, provided that at the time of death the decedent and the surviving spouse or domestic partner had not been living separate and apart in different habitations or had not ceased to cohabit as man and wife, either as the result of judgment of divorce from bed and board or under circumstances which would have given rise to a cause of action for divorce or nullity of marriage to a decedent prior to his death under the laws of this State.

In 2023, the legislature amended the statute to, inter alia, provide explicitly that if either party had filed for divorce, or a cut off agreement was entered into, they were not entitled to their elective share. Now the text of the statute provides:

 If a married person, partner in a civil union, or person in a domestic partnership dies domiciled in this State, the surviving spouse, partner in a civil union, or domestic partner has a right of election to take an elective share of one-third of the augmented estate under the limitations and conditions hereinafter stated, unless either the decedent or the surviving spouse, partner in a civil union, or domestic partner had filed a complaint not dismissed pursuant to R.4:6-2 of the Rules of Court for divorce, dissolution of civil union, termination of domestic partnership, or divorce from bed and board.

3. For purposes of this section “surviving spouse, partner in a civil union, or domestic partnership” shall not include those individuals described pursuant to subsection d. of N.J.S.3B:5-3.

Individuals can waive their right to claim an elective share upon the death of a spouse in a marital agreement. N.J.S.A. § 3B:8-10 provides for the requirements to waive a spouse’s interest in an elective share.

The right of election of a surviving spouse or domestic partner and the rights of the surviving spouse or domestic partner may be waived, wholly or partially, before or after marriage before, on or after May 28, 1980, by a written contract, agreement or waiver, signed by the party waiving after fair disclosure. Unless it provides to the contrary, a waiver of “all rights” (or equivalent language) in the property or estate of a present or prospective spouse or domestic partner or a complete property settlement entered into after or in anticipation of separation, divorce or termination of a domestic partnership is a waiver of all rights to an elective share by each spouse or domestic partner in the property of the other and a renunciation by each of all benefits which would otherwise pass to him from the other by intestate succession or by virtue of the provisions of any will executed before the waiver or property settlement.

When applying a waiver of an elective share contained in a prenuptial agreement, courts examine the requirements set forth in both N.J.S.A. 37:2-33 and N.J.S.A. 3B:8-10. The salient overlapping requirement in both statutes is fair disclosure. Without fair disclosure, courts have consistently held that such provisions, and consequently the waivers themselves, are unenforceable.

In the Estate of Shinn, the husband was a successful business owner. In Re Estate of Shinn, 394 N.J. Super. 55, 60 (App. Div. 2007). The husband presented the wife with a premarital agreement on the eve of a trip she was taking. The agreement, which was prepared by the husband’s counsel included a waiver of the wife’s elective share, as well as limits on equitable distribution, alimony and providing her with a $100,000 death benefit. Id at 59 – 60. Attached to the agreement was a financial statement listing the husband’s assets but failed to reference, inter alia, his income and certain other assets and benefits. Id. at 60 – 61. Despite the wife’s attorney’s request for further information and documentation supporting the financial statement, the husband refused to produce same and the husband threatened that if the wife refused to sign the agreement as is, he would cancel the wedding. The wife signed “in tears” and the parties were married in 1995.

            The husband died three years later, leaving the wife the home they lived in together via his will and a $150,000 life insurance policy. The remainder of his estate was left via his will to his children. Id. at 61. The wife, both individually and as a guardian for the parties’ daughter, filed seeking her elective share and a declaration that the prenuptial agreement was unenforceable.

The trial court found the agreement unenforceable under N.J.S.A. 3B:8-10 and the Uniform Premarital Agreement Act (N.J.S.A. 37:2-38) because the husband had not made full and fair disclosure and the wife had not executed a written waiver of disclosure. Id. 63-65. Nonetheless, the trial judge enforced the waiver under equitable estoppel, reasoning that the wife knowingly chose to sign the agreement despite her attorney’s warning and it would be “fundamentally unfair” to let her avoid the agreement after his death. Id. at 66–67.

In In re Estate of Shinn, the Appellate Division reversed, holding that equity cannot override statutory requirements. Id. at 67. The Court emphasized that “because equity follows the law, the doctrine of equitable estoppel should not have been utilized to override the Legislature’s declaration that a premarital agreement, which did not fully disclose what was being waived or which did not contain an adequate waiver of such a disclosure, must not be enforced.” Id. at 58–59.

The Appellate Division in In re Estate of Shinn, noted that N.J.S.A. 3B:8-10, a waiver of elective share must be signed “after fair disclosure.” Similarly, N.J.S.A. 37:2-38 (Uniform Premarital Agreement Act) makes a premarital agreement unenforceable where a party was not provided “full and fair disclosure of the earnings, property and financial obligations of the other party” or did not execute an express written waiver. In Re Estate of Shinn, 394 N.J. Super. 55, supra, at 62 – 63. The Appellate Division determined that the husband’s disclosure was “grossly understated” and that the wife’s lack of knowledge regarding her husband’s net worth due to the lack of disclosure, was supported by clear and convincing evidence. Id.

The Appellate Division cited that the Supreme Court of New Jersey has observed that “in ordinary circumstances equity follows the law” and that a departure from this maxim is normally permitted only “if extraordinary circumstances or ‘countervailing equities’ call for relief.” Monmouth Lumber Co. v. Indemnity Ins. Co. of No. Am., 21 N.J. 439 (1956) (quoting Camden Trust Co. v. Handle, 132 N.J.Eq. 97, 108 (E. & A.1942)). In essence, the maxim does not bar the crafting of a remedy not recognized by legislation or found in the common law, but it does prevent the issuance of a remedy that is inconsistent with recognized statutory or common law principles. And, while in extraordinary circumstances, equity may “soften[] the rigor of the law,” Giberson v. First Nat. Bank, Spring Lake, 100 N.J.Eq. 502, 507, 136 A. 323 (Ch.1927), it remains well-established that equity will not create a remedy that is in violation of law nor create a remedy where the law has recognized there can be no liability. Cited in In Re Estate of Shinn, 394 N.J. Super. supra at 67.

Accordingly, in In Re Estate of Shinn, the Appellate Division noted that the trial court’s sense of “fairness” was not a sufficient reason to justify the enforcement of terms that the statute expressly defined as invalid. Id. at 67. The Appellate Division noted that “[w]ere [it] to enforce such [equitable] principles [the Appellate Division] would nullify the clear purpose of the statute.” Quoting In Re Estate of Cosman, 193 N.J. Super. 664, 671 (App. Div. 1984); In Estate of Shinn, 394 N.J. Super. supra at 67.

Further, in In re Estate of Shinn the Appellate Division espoused that having “stonewalled” the wife’s pursuit for fair disclosure and in light of the absence of an adequate waiver of same, the husband “had no right to assume that the agreement would be enforced in the future, and those who now seek to benefit from his inequitable conduct cannot invoke the doctrine of equitable estoppel.” Id. at 70.

In contrast, in Kambitsis v. Kambitsis, the prenuptial agreement was executed after both parties exchanged detailed financial information and were represented by counsel. Kambitsis v. Kambitsis, 2020 N.J. Super. Unpub. LEXIS 690 (App. Div. Apr. 17, 2020) In Kambitsis, the question before the Court was whether the elimination of an inheritance provision for the children of the marriage was against public policy.   Because the disclosure was sufficient and the waiver language was explicit, the Appellate Division upheld the portion of the agreement that waived each party’s claim to the other’s estate, although it did not uphold the alimony provision, including “dower, curtesy, equitable distribution, statutory allowances, widow(er)’s share, homestead rights, [and] forced share.” The original 2004 agreement had also required the husband to leave 28 percent of his estate to the parties’ children, naming the wife as trustee, but a 2007 amendment removed that clause and replaced it with life-insurance provisions. The court rejected the wife’s claim that eliminating the 28 percent inheritance to the children violated public policy,[1] explaining that New Jersey law does not require a parent to make a testamentary bequest to children and that spouses may agree to modify or waive inheritance rights when done voluntarily and with full disclosure.

II, Mid Marriage Agreement

A mid-marriage agreement, which is also referred to as post nuptial agreement, is distinct from a prenuptial as this agreement is entered into after the parties are married. The intent of the mid-marriage agreement usually involves defining the terms of a divorce or death of a spouse after the marriage was already commenced. Paceli v. Paceli, 319 N.J. Super. 185, 190 (App. Div. 1999). The New Jersey courts have held that these agreements are inherently coercive and generally unenforceable unless they can withstand close judicial scrutiny. Id. at 191, 198; Steele v. Steele, 467 N.J. Super. 414, 440, 443 (App. Div. 2021). Courts examine the financial circumstances “at the time they executed the agreement, and when [the party] sought to enforce the [agreement].” Steele, 467 N.J. Super. at 443. The Uniform Premarital Agreement Act does not apply to these agreements. Id. at 438.

In Steele, the Husband, who had significant wealth, first proposed entering into a premarital agreement prior to the parties’ marriage. Steele, supra, 467 Super 414. He retained an attorney to prepare the agreement and his attorney referred him to counsel who could represent the wife in the preparation of the prenuptial agreement. However, wife rejected the idea and there was no testimony on the record to establish that the husband informed her he had already retained counsel to draft an agreement.[2] The parties had multiple conversations and arguments wherein the wife rejected the request. The parties married and, a few months after their marriage, upon the constant requests of the husband, the wife advised she was open to entering into the agreement. She retained the counsel that was referred by the husband’s attorney and, with the assistance of counsel, the parties negotiated the terms. The agreement contained various terms, including, providing that if the parties divorced after five years, the wife would receive $35,000[3] in equitable distribution for each year of the marriage and $5,000 taxable alimony per month.

In 2015, the husband filed a complaint for divorce. The parties initially attempted to resolve the matter via mediation, but it was ultimately unsuccessful. Thereafter, both parties made multiple pre trial motions before the court, including for a declaratory judgment to enforce the agreement and wife sought for it to be deemed void ab initio and, in the alternative,  determined as unconscionable and inequitable due to the lack of full disclosure. [4] The trial court ruled in favor of the husband’s claims and determined that the agreement was enforceable as a premarital agreement, despite being entered into after the marriage. The trial court determined, inter alia, that here, unlike Pacelli,[5] the agreement was not presented on a “take it or leave” it basis. Id. at 433. On appeal, the Appellate Division noted that while the same level of coercive tactics were not present in Steele, the agreement was nonetheless a mid-marriage agreement that necessitated heightened scrutiny. Specifically, the court noted that the wife’s testimony established that the husband would treat her coldly after any discussion related to the agreement prior to its signing, that she signed it shortly after quitting her teaching job, that it was executed shortly after she gave birth, that she felt that if she did not sign it she would be vulnerable.

The Appellate Division noted that, unlike prenuptial agreements, the Court does not “approach the question of whether a mid-marriage agreement is enforceable with a predisposition in favor of its enforceability, given the “inherently coercive” nature of mid-marriage agreements.” Id. at 440. The Court noted that while the wife was not under duress, the circumstances may have been unfair. The Court noted that its concern pertains to three areas: “ the adequacy of plaintiff’s financial disclosures before the parties signed the MA; the circumstances surrounding the MA’s negotiation and execution; and the adequacy of the settlement itself.” Id. The Appellate Division outlined its concerns in light of the three areas it outlined and reversed the declaratory judgment, remanding the matter for further discovery and for the trial court to trial court to apply “heightened scrutiny” and to consider the adequacy of [husband’s] pre execution financial disclosure; the circumstances surround the … negotiation and execution; and the adequacy of settlement itself.” Thus, while mid-marriage agreements are not prohibited by law, there is no assurance that they will be enforced as they are subject to heightened scrutiny.

1. Reconciliation Agreement

A reconciliation agreement is entered into after there has been a breakdown in the marriage whereby the parties agree to reconcile their marriage. The consideration is one spouse’s willingness to remain married or return to the marriage. Nicholson v. Nicholson, 199 N.J. Super. 525, 531 (App. Div. 1985). Court’s evaluate these agreements to ensure that the reconciliation was genuine and the terms were fair and conscionable. In considering these agreements, the parties’ marriage must have been on the brink of deteriorating to an indefinite separation or divorce, and the promise in exchange for the reconciliation will then be enforced if fair and equitable. Id. at 531–32.

In Nicholson, the parties separated upon the wife discovering that husband had an extramarital affair. When the husband sought reconciliation, the wife demanded conveyance of the parties’ home to her name solely. Nicholson, supra, 199 N.J. Super. 525, at 530. The trial court determined during the parties’ divorce that the residence was exempt from distribution, citing their agreement. In analyzing that portion of the trial court’s decision, the Appellate Division noted that “[t]he question peculiar to such an alleged agreement is whether a spousal promise to resume cohabitation is adequate consideration to bind the other spouse to his or her reciprocal promise.” Id. at 531.

The Appellate Division determined that a “substantial rift” can rise to the of sufficient consideration and that this requirement was met in Nicholson. They also noted though that the terms of the agreement must be “fair to the party charged”, conscionable when the agreement was made, the party seeking enforcement must have acted in good faith and “changed circumstances must not have rendered literal enforcement inequitable.” Id. at 532. The Appellate Division determined that although the wife established that the marital rift was substantial enough, the trial court had not examined the fairness of the terms and remanded the matter to address the other considerations.

If the reconciliation agreement includes a transfer of real property, it must comply with the Statute of Frauds. Id. at 531, citing Carlsen v. Carlsen, 49 N.J. Super. 130, 134–38 (App. Div. 1958). Before enforcing such an agreement, the court must find that it was entered when the marital rift was significant, that the circumstances were fair to the party being held to its terms, that the provisions were conscionable when executed, and that the party seeking enforcement acted in good faith. Id., citing D’Arc v. D’Arc, 164 N.J. Super. 226, 238–39 (Ch. Div. 1978), rev’d in part, aff’d in part, 175 N.J. Super. 598 (App. Div. 1980), and Wertlake v. Wertlake, 137 N.J. Super. 476, 482 (App. Div. 1975). When these requirements are satisfied, the reconciliation agreement is  generally treated as a valid and enforceable contract.

1. Enforcement Of These Agreements In Other States
2. Choice of Law

Many prenuptial, mid-marriage and reconciliation agreements contain a choice of law provision. In New Jersey “[o]rdinarily, when parties to a contract have agreed to be governed by the laws of a particular state, New Jersey courts will uphold the contractual choice if it does not violate New Jersey’s public policy.” Instructional Sys., Inc. v. Computer Curriculum Corp., 130 N.J. 324, 341 (1992).

            The Restatement (Second) of Conflict of Laws § 187 provides:

(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.

(2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either

(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties choice, or

(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.

(3) In the absence of a contrary indication of intention, the reference is to the local law of the state of the chosen law.

Restat 2d of Conflict of Laws, § 187

There are no reported decisions addressing the application of a New Jersey prenuptial agreement’s choice-of-law provision in another state for elective-share purposes. However, in Hussemann v. Hussemann, 847 N.W.2d 219 (Iowa 2014), the Iowa Supreme Court enforced a Florida postnuptial agreement containing a Florida choice-of-law clause. The agreement included full financial disclosures and waivers of each spouse’s elective-share and inheritance rights. After the parties moved to Iowa and the husband’s death, the court applied Florida law under Restatement § 187, concluding that Florida had the most significant relationship and that enforcement did not violate Iowa’s public policy.

Thus, if the parties move out of the state of New Jersey, the question of whether the state where the parties moved to will apply the law related to a waiver of elective shares in a prenuptial agreement, post nuptial agreement or reconciliation is a stepped approach.  The first step is to determine how the courts of the state where the matter is pending will determine what law they will follow. If they follow the construct set forth in the restatement (second) 187 of choice of law, then the next step would be to analyze the framework outlined in the restatement. Specifically, they need to examine the extent to which the court  would examine the issue if the chosen state  has no substantial relationship to the parties or transaction and whether application of the law of the chosen state would apply, or unless applying it would contravene the fundamental policy of another state with a materially greater interest.

1. Conclusion

In applying estate provisions in a prenuptial, post nuptial or reconciliation agreement, New Jersey tends to apply a consistent approach that focuses on whether the agreement was entered into voluntarily and with full and faire disclosure. If the agreement and the facts of the case meet those requirements and conditions, the courts will generally enforce the terms. When they are not met, the courts will likely reject to enforce the agreement regardless of other factors or countervailing considerations. These provisions application in other states will often depend on how those states interpret choice of law provisions and whether applying New Jersey law is against their public policy.

In practice, these cases demonstrate that it is of the utmost importance to be ensure transparent disclosure in the drafting order to ensure that the terms of the agreements the parties entered into will be applied as they intended regardless of where they are living at the time that they seek to have the agreement enforced.  

[1] The Premarital Agreement contained a provision providing that the Husband would bequeath 28% of his estate to the children of the marriage.

[2] The husband testified that the wife had indicated she would enter into a prenuptial agreement before the marriage, but the court noted that wife’s testimony did not establish that claim.

[3] The wife had requested a higher amount for this provision but that was rejected by the husband’s counsel.

[4] The parties both also engaged in motion practice related to discovery on the matter, which was also addressed by the appellate division separately.

[5] Pacelli v. Pacelli, 319 N.J. Super. 185, 187 (App. Div. 1999)