NJ Prenuptial Agreements and Changing Circumstances: Utilizing Sunset Clauses

A wedding is one of the most exciting times in a person’s life.  The dizzying myriad of plans and decisions to be made can leave a couple stressed and breathless.  Along with picking the venue and menu for the reception, choosing the floral arrangements, and designing the invitation, many couples want to include a prenuptial agreement.  Contrary to popular misconception, a prenuptial agreement is not used exclusively for wealthy couples. Each prenup is different. Many people marry later in life and enter the marriage with their assets, which they want to protect through a prenuptial agreement to determine how the assets will be managed during the marriage and avoid any messiness in the eventuality of a separation.

Another misconception is that prenuptial agreements are the same for everyone.  This document can be adjusted to the unique needs and goals of the couple.  Sometimes, couples include a “sunset clause” in their agreement.  A sunset clause is a type of expiration date where the document is considered invalid at that specified time.  Many choose a sunset clause that marks 5, 10, 20 years of marriage or any variation thereof. The idea is that as the relationship continues, the prenuptial agreement terms may no longer be applicable.  For example, if one partner comes into the relationship with a small business, which was expanded during the marriage due to considerable input from the other spouse, it would be unfair not to include that spouse in the division of the assets should the couple part ways.

NJ Prenuptial Agreement with an Expiration Date: Pros & Cons of Sunset Clauses

There are several advantages to having a sunset clause in a prenuptial agreement in New Jersey. As the sunset clause’s date approaches, it affords the couple an opportunity to discuss their financial standing and future plans.  Having a sunset clause can indicate a more profound amount of trust between the spouses whose relationship has lasted many years.  It can also encourage an air of compromise and negotiation as to any changes that should be made to the family finances.

Many couples believe that as their marriage progresses, more trust and teamwork are built into it, and the initial motivations for the agreement may no longer be a reality.  The expiration of sunset clauses allows the couple to re-evaluate their financial standing and negotiate new terms, if necessary.  A postnuptial agreement can be drafted to continue the old terms or to create new ones should the couple feel it is needed.

A disadvantage of a sunset clause is that each spouse loses financial protection after the agreement has expired. Spousal support, individual assets, and other negotiation points will no longer be covered. Additionally, one spouse may want to enter into a postnuptial agreement that will maintain the stipulations in the prenuptial agreement while the other opposes further restrictions.

When Does a Sunset Clause Make Your NJ Prenuptial Agreement Invalid?

Couples who divorce after many years of marriage and have a sunset clause in their prenuptial agreement may find themselves without any financial protection regarding the equitable distribution of assets and debts during the divorce settlement.   Also, the prenuptial agreement stands if a sunset clause is established, but separation or divorce proceedings begin shortly before the specified date.  An example of this would be a couple with a sunset clause set at thirteen years, but their divorce process begins a few months prior to the specific date. If the divorce settlement falls on a date past the established one in the sunset clause, the document is still valid at the time of its expiration.

For example, Rhiley and Shane have a sunset clause in their prenuptial agreement that ends on their fifteenth wedding anniversary, which was in January.  They separated near the end of October and filed for divorce in mid-December.  Their divorce was not finalized until early summer, so their prenuptial agreement was binding because they were still married in January.  To avoid this kind of loophole, the prenup can be drafted in such a way as to include separations or divorce actions before the close of the sunset clause.

Importance of Talking to an Attorney When Considering a Sunset Clause in a Prenuptial Agreement in Toms River & Freehold NJ

Drafting a prenuptial agreement is a delicate undertaking that requires negotiation, attention to detail, and knowledge of the law. The Bronzino Law Firm is dedicated to helping our clients work through these matters. With over a decade of experience handling prenups and subsequent divorces involving initial prenuptial agreements, our family law attorneys can explain the components of a prenuptial agreement and how it can support your and your partner’s goals. Negotiations for a prenuptial agreement should focus on the terms’ impact on the spouses and individuals. Our attorneys are ready to help you and your spouse create a prenuptial agreement that uniquely fits your situation.  We will tailor it to meet the needs of your relationship and the assets each of you brings to the marriage.

Our experienced lawyers can suggest particular terms, specific measures, and added protections to eliminate any possibility of legal ambiguity.  A prenuptial agreement that is not worth the paper it is printed on is of no use to anyone. We have served family law clients with prenuptial agreement matters in Sea Bright, Manalapan, Beach Haven, Freehold, Toms River, Red Bank, Howell, and towns in Ocean and Monmouth County for many years and take great pride in our work.

If you or someone you know is interested in drafting a prenuptial agreement and possibly including a sunset clause, call our firm today at (732) 812-3102 or reach out to us online for your initial consultation.