Many New Jersey residents consider prenuptial agreements to be static, one-time documents that are drafted, signed and subsequently stored away, hopefully never to be needed. In reality, the decisions a spouse makes throughout his or her marriage can have a huge impact on whether a prenup can be called into action in the event of a high asset divorce. If the wrong choices are made, the document may be at risk of being thrown out of court.
When a prenuptial agreement is initially drafted, both parties make a full disclosure of all of their assets and debt. They also agree on terms regarding how assets would be divided in the event of a divorce. If those spouses go on to make choices that fly in the face of those agreements, however, a court could rule that the initial provisions are no longer valid.
Take, for example, a woman who owns a thriving business at the time of marriage. She and her betrothed go through the process of drafting a prenup and agree that she would retain all assets connected to her business if the marriage ends in divorce. Years later, she decides to sell the business and deposits the proceeds into a shared marital account, using a portion to improve the family home.
The husband could make a strong argument in court that any remaining proceeds from the sale of the business should now be considered marital wealth. His reasoning would focus on the fact that the funds were commingled after the business was sold. However, if the wife had invested the proceeds solely in her own name, she could present a strong argument that the wealth should remain hers alone.
Working through these issues is an important part of ensuring full protection from a prenup. Both parties should be aware of which actions could place their assets in jeopardy if a high asset divorce should take place. For those in New Jersey who are concerned about the strength of their existing prenup, it may be wise to sit down with a family law attorney and discuss whether there are any areas that should be addressed.
