S2151

An Act concerning premarital and pre-civil union agreements and amending R.S.37:2-32 and R.S.37:2-38.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. R.S.37:2-32 is amended to read as follows:

37:2-32. As used in this article:

a. "Premarital or pre-civil union agreement" means 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;

b. "Property" means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings;

c. ["Unconscionable premarital or pre-civil union agreement" means an agreement, either due to a lack of property or unemployability:

(1) Which would render a spouse or partner in a civil union couple without a means of reasonable support;

(2) Which would make a spouse or partner in a civil union couple a public charge; or

(3) Which would provide a standard of living far below that which was enjoyed before the marriage or civil union.] (Deleted by amendment, P.L. , c. (pending before the Legislature as this bill)

(cf: P.L.2006, s.103, s.27)

2. R.S.37:2-38 is amended to read as follows:

37:2-38. Enforcement of premarital or pre-civil union agreement; generally.

The burden of proof to set aside a premarital or pre-civil union agreement shall be upon the party alleging the agreement to be unenforceable. 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:

a. The party executed the agreement involuntarily; or

b. [The agreement was unconscionable at the time enforcement was sought; or] (Deleted by amendment, P.L. , c. (pending before the Legislature as this bill)

c. [That] The agreement was unconscionable when it was executed because that party, before execution of the agreement:

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

(2) 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;

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

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

d. The issue of unconscionability of a premarital or pre-civil union agreement shall be determined by the court as a matter of law. An agreement shall not be deemed unconscionable unless the circumstances set out in subsection c. of this section are applicable.

(cf: P.L.2006, s.103, s.33)

3. This act shall take effect immediately and shall apply to all premarital and pre-civil union agreements which have not been the subject of an enforcement proceeding filed with a court as of the effective date.

STATEMENT

This bill would strengthen the enforceability of premarital and pre-civil union agreements.

Pursuant to subsections b. and c. of R.S.37:2-38, under certain circumstances a premarital or pre-civil union agreement is not enforceable. These circumstances include, among others, proof that the agreement was unconscionable at the time enforcement was sought; or proof that the party seeking to set aside the agreement: (1) was not provided full and fair disclosure of the earnings, property and financial obligations of the other party; (2) 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; (3) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party; or (4) did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.

Under the statute, the issue of unconscionability of a premarital or pre-civil union agreement is determined by the court as a matter of law.

The term “unconscionability” is defined in R.S.37:2-32 as an agreement, either due to a lack of property or unemployability, which would: (1) render a spouse or partner in a civil union couple without a means of reasonable support; (2) make a spouse or partner in a civil union couple a public charge; or (3) provide a standard of living far below that which was enjoyed before the marriage or civil union.

Under the statute, an agreement may be set aside if it was unconscionable at the time enforcement was sought. 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 an agreement will not be set aside unless it was unconscionable when it was executed (i.e., when the parties signed it).

The bill also eliminates the statutory definition of “unconscionability.” Under the bill, the issue of unconscionability of a premarital or pre-civil union agreement would continue to be determined by the court as a matter of law.

The bill provides that a premarital or pre-civil union agreement could not be deemed unconscionable unless the agreement was unconscionable when executed because the party seeking to set aside the agreement: (1) was not provided full and fair disclosure of the earnings, property and financial obligations of the other party; (2) 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; (3) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party; or (4) did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.

The bill provides that an agreement could not be deemed unconscionable unless the circumstances set out above are applicable.

The bill would take effect immediately and apply to all premarital and pre-civil union agreements which have not been the subject of an enforcement proceeding filed with a court as of the effective date.