Should You Add a Sunset Clause to Your Prenup?

Let’s look at what a sunset clause is and how it can affect couples in New Jersey if it’s included or excluded from their prenuptial agreement.

As an engaged couple, it’s only natural to explore all the factors that contribute to a successful marriage. In some cases, prenuptial agreements are a must for couples anticipating life together—since protecting your interests when you’re getting married is a smart move. 

You may have heard that some couples choose to add a “sunset clause” to their prenuptial agreement. But between the scope of this kind of clause and the legal ramifications associated with them, it’s important to understand what adding this to your contract could mean for your marriage before you make any decisions.

Let’s look at what a sunset clause is and how it can affect couples in New Jersey if it’s included or excluded from their prenuptial agreement.

What’s a Prenup Sunset Clause?

As you know, a prenuptial agreement is in place to protect both your assets and those of your spouse if one or both of you decide to divorce. In a typical prenup, the parties list out all the assets that they’re bringing into the marriage and define upfront what will happen if you divorce. Some prenups even define things such as how spousal support payments will be handled. 

Some couples decide to add a sunset clause to their prenuptial agreement. This is the expiration date for the prenup. Many times, the expiration date is after five, 10, 15, or 20 years. After meeting the threshold of this sunset clause, the prenuptial agreement is nullified and does not need to be followed if you get divorced.

Why Would I Want a Sunset Clause in My Prenup?

There are a couple of reasons why you might want to consider getting a sunset clause in your prenup. First, some of your assets may increase in value as time passes. Even though a spouse may bring the assets into the marriage, both partners could have a stake in increasing the value of the asset. 

So, for instance, if the spouse helps the business interest grow and enlarge, then they should possibly have a stake in those assets if the marriage ends. A sunset clause allows for this. Also, the sunset clause gives the couple a chance to sit down, take stock of their marriage, and decide if they still need the prenup at all or if they want to continue with it. 

The negative aspect that could come with adding a sunset clause to a prenup is that it could seem to set a deadline on a relationship; this could feel daunting and produce anxiety and stress for one or both spouses. For instance, a person may be inclined to “tough it out” in a bad marriage so they can “cash in” once the prenup expires due to the sunset clause.

Is An Expiration Date On My Prenup Legal in New Jersey?

The short answer here is yes, but only if it’s specifically addressed in the prenuptial agreement. New Jersey Law (NJSA 37:2-34) states that a prenuptial can contain the following:

• The rights and obligations of each spouse when it comes to property;
• The right to manage and control property;
• How property will be distributed at divorce, death, or the occurrence (or non-occurrence) of any other event;
• The modification or elimination of spousal support;
• The making of an arrangement (such as a will or trust) to carry out the provisions of the agreement;
• The ownership rights in and distribution of the death benefit from a life insurance policy;
• The choice of law governing the construction of the agreement; and/or
• Any other matter, such as personal rights and obligations, as long as it doesn’t violate public policy.

Under New Jersey law, all of this is enforceable until the couple divorces or one of the spouses is dead, thus naturally bringing an end to the marriage. There’s no expiration date on a prenuptial agreement in New Jersey unless you place it in the agreement. Then, the sunset clause will be adhered to in the case of any legal proceedings.

Should I Add a Sunset Clause to My Prenup?

Typically, most attorneys will tell you not to include a sunset clause. Setting an expiration date is like guesswork—in a way, you’re trying to pick an arbitrary number after which you’ll feel “safe” that the marriage won’t end in divorce. 

However, the reality is that many couples divorce, even after decades together. If you truly want to keep your assets safe in that situation, don’t set an expiration date on the prenuptial agreement.

Another Possibility to Consider: Postnuptial Agreements

Another possible option is a postnuptial agreement. This allows for couples to decide exactly how they wish their marital assets to be divided in case they ever get divorced. In that way, if the worst does happen, it’s all laid out legally and doesn’t have to be litigated in court. This also allows for occasional review and revision of the agreement, as long as both parties agree to the revisions.

Here’s What You Most Need When Considering a Prenup

Considering a prenuptial agreement with or without a sunset clause is a tricky proposition that requires careful analysis and legal advice that most people aren’t capable of on their own. That’s why it is important if you’re considering a prenuptial agreement that you hire an experienced family law attorney at Smedley Law Group, which offers a large background in crafting these types of arrangements.

There’s a Lot to Consider When Drafting Any Marital Agreements

The reality is that a prenuptial agreement is one of the few ways you have to protect your assets in the event of a divorce. That being said, it’s essential that you talk to a skilled divorce attorney to help set up your prenuptial agreement, sunset clause or not, to make this legally binding.

Contact an Experienced Woodbury Prenuptial Agreement Attorney to Discuss Your Questions Today

The decision to get married is one of the most significant that most people make. It’s important to make sure you understand all aspects of the equation beforehand. Our trusted Woodbury, NJ prenuptial agreement attorneys at Smedley Law Group are here to help you find solutions that best suit your needs and goals. We’re Certified Matrimonial Law Attorneys—a designation given by the New Jersey Supreme Court to reflect our expertise in family law matters. To learn more about how we can help, contact us today to arrange a consultation.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.