Marital Agreements
Do they work? Ask your divorce law attorney. Jeff J. Horn – Family Law Attorney
What are the three types of agreements? Premarital Agreements, Marital Settlement Agreements, and Mid–Marital Agreements. Learn about the elements of enforceability of a premarital agreement, importance of marital settlement agreements in divorce law, and the judicial scrutiny of mid–marital agreements. Understand why spousal agreements fail when there is an unfair timing, setting, terms, financial disclosure, and lopsided bargaining position.
What are the three types of agreements?
- Premarital agreements
- Marital settlement agreements
- Mid-marital agreements
Premarital agreement law has developed over the last 50 years. Currently, premarital agreements are enforceable. Historically, the elements of enforceability of a premarital agreement include:
- fairness at the time the agreement is executed
- full financial disclosure
- absence of coercion
- opportunity for independent family law attorney
Simply stated, fair premarital agreements will be enforced, even if one party is a clear winner at the time of enforcement.
Marital settlement agreements or divorce agreements are also enforceable. Indeed, Agreements are the backbone of the divorce law system. Overwhelmingly, divorces are resolved via a written marital settlement agreement prepared by your family law attorney.
In New Jersey, fewer than 2% of divorces are resolved via a full-blown trial. Typically, there are thirty thousand divorce filings and 400 complete trials.
Remember, there will never be enough Family Court judges to try every divorce case.
In fact, family court judges rely upon the parties and family law attorneys to work toward agreement. In the absence of agreements, big and small, the family court and divorce law system would grind to a halt. Even agreements that resolve only pieces of your divorce are highly valuable to the court and your family law attorney. Obviously, narrowing issues helps focus the family court judge on items remaining in dispute.
TIP: The Family law judge is required to ensure that you believe your marital settlement agreement is fair and reasonable.
However, the court makes no independent assessment of the fairness or reasonableness of your voluntary agreement. In short, you are free to agree to things that no court would order. Freely and voluntarily entered into marital settlement agreements will be enforced.
Mid marital agreements or mid marriage agreements or marital agreements are viewed differently.
The New Jersey Superior Court – Appellate Division addressed agreement in an important published decision – Steele.
In Steele, the Appellate Court provides an excellent discussion regarding these. This case primarily deals with the party’s mid-marital agreement. Mid-marital agreements are the most vexing. inherently, family court is a court of equity. Accordingly, the prism of fairness is always superimposed. In contrast, ordinary commercial contracts are viewed based upon the language of the contract. Presumably, parties are competent to enter into a contract. However, spousal Agreements are different then arm’s length contracts between the dispassionate parties. Hence, that is why mid-marital agreements must endure enhanced judicial scrutiny.
Analysis from attorney Bruce D Greenberg, AppellateLaw-NJ.com Blog on Mid-Martial Agreements:
… are not viewed favorably. Such agreements “are generally unenforceable as they are ‘inherently coercive.’ A mid-marriage agreement is ‘entered into before the marriage [has] lost all of its vitality and when at least one of the parties, without reservation, want[s] the marriage to survive.’ Such agreements are carefully reviewed because they are ‘pregnant with the opportunity for one party to use the threat of dissolution to bargain themselves into positions of advantage.’” Judge Enright quoted Pacelli v. Pacelli, 319 N.J. Super. 185 (App. Div. 1999), a leading case on mid-marital agreements, for those principles.
Fairness set and setting all matter. Spousal agreements fail when:
- The timing favors one spouse
- The setting is coercive
- Terms are one-sided
- Financial disclosure is incomplete
- Parties bargaining position is inherently lopsided
In contrast to arm’s length contracts, spouses are not free to simply walk away from the marriage. Accordingly, the application of cold contract principles will not suffice.
Pre-Marital Agreements and Trusts – A significant part of our Family Law practice, includes the drafting and negotiating of Pre-Nuptial Agreements.
AppellateLaw-NJ.com Blog on Mid-Martial Agreements
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