TEN QUESTIONS YOU ALWAYS WANTED TO ASK
ABOUT MIDNUPTIAL AGREEMENTS
by: Charles C. Abut, Esq.
1. How does a midnuptial agreement differ from a premarital agreement and a property settlement agreement?
In a premarital agreement, the parties are not married, but plan to be. In a property settlement agreement, the parties are married, but plan to be divorced. By contrast, a midnuptial agreement is typically intended to cover those situations where the parties did not enter into a premarital agreement before getting married, want to remain married and have no present intention of getting divorced, but are still concerned about the “what if” of divorce.
2. How can I learn more about midnuptial agreements?
You should read Pacelli v. Pacelli, 319 N.J. Super.185 (App. Div. 1999).
3. I’ve read Pacelli, and it refused to uphold a midnuptial agreement. Does this mean that we can no longer advise our clients to enter into midnuptial agreements?
No. It does, however, mean that matrimonial attorneys have to be especially careful when counseling clients who are contemplating them.
4. What specific measures would you advise when counseling clients who are thinking about entering into a midnuptial agreement?
At a minimum, the prudent matrimonial practitioner will insist on four sine qua non procedures : full disclosure by both parties, independent representation by separate counsel, absence of coercion or duress, and terms that are fair and equitable.
5. What is “fair and equitable”?
Who knows? Every case contains unique facts and circumstances. What is fair in one context may be unconscionable in another. One thing is for sure, after Pacelli. Unlike premarital agreements, it is no longer enough that a midnuptial agreement was fair when negotiated and executed. It must also be fair when being performed. It should not be difficult for a creative lawyer to suggest various forms of “unfairness”, resulting just from the mere passage of time.
6. What is “full disclosure”?
At a minimum, both parties’ tax returns, and their respective statements of net worth (reflecting assets and liabilities, with stated values) should be exchanged. Follow the rule “more is better, less is worse”.
7. Is it absolutely necessary to have lawyers on both sides of a midnuptial agreement?
While it is conceivable that such an agreement might be sustained where only one attorney is involved, one party being pro se so significantly tips the scales that it might be said to create a rebuttable presumption of invalidity. The careful practitioner will insist on separate representation, by independent counsel for each party.
8. We have independent counsel for each party, we have made full disclosure, the agreement is eminently “fair and equitable” to both parties and there are no issues of either coercion or duress. Are we out of the woods?
No. Pacelli requires the midnuptial agreement to also be “fair and equitable when it is sought to be enforced ( 319 N.J. Super. 196-199). There is, therefore, no assurance that the agreement would be found “fair and equitable” down the road. Do you have a crystal ball?
9. Is a midnuptial agreement the same as a reconciliation agreement?
A reconciliation agreement was the subject of Nicholson v. Nicholson, 199 N.J. Super. 525 (App. Div. 1985). It held that such agreements can be valid, provided that the marriage has “deteriorated” up to “the brink of an indefinite separation or a suit for divorce” (199 N.J. Super. at 531). Presumably, therefore, the filing of a complaint would suffice. In Pacelli, the marital “crisis” was found to be “artificial” and therefore fell short of the required showing (319 N.J. Super. at 193). The Pacelli court compared reconciliation and midnuptial agreements, and found they “closely resemble” each other (319 N.J. Super.195).
10. Will the doctrine of “modifiability based on changed circumstances” apply to midnuptial agreements?
Why not? As observed in Lepis v . Lepis, 83 N.J. 139 (1980) (in what may be the single most dangerous sentence in all of New Jersey matrimonial law), “Contract principles have little place in the law of domestic relations” (83 N.J. at 148). So, it may well be that “matrimonial agreement” has become oxymoronic in New Jersey family law. In fact, Nicholson may have provided a preview answer to this important question. The Appellate Division required a showing that “Changed circumstances must not have rendered literal enforcement inequitable” (199 N.J. Super. At 532) for a reconciliation agreement to be enforceable. Thus, Pacelli may be seen, in the last analysis, as nothing more than an extension of the Lepis doctrine
Charles C. Abut is a Certified Matrimonial Attorney and a Fellow of the American Academy of Matrimonial Attorneys. He is a graduate of Columbia University (B.A) and Cornell Law School (J.D.) and practices in Hackensack, New Jersey
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