NH Bar Question of Law: Prenuptial Agreements

June 1, 2007
June 2007
Question: I am getting married this summer and my fiancée has requested a prenuptial agreement. What are these agreements and what do they do?


The mention of a prenuptial agreement seldom triggers happy thoughts, however, the vast majority of prenuptial agreements are drafted fairly and requested for good reason. In fact, prenuptial agreements often protect and advance the interests of both spouses.

Prospective spouses may wish to protect certain assets or income upon death or divorce for many valid reasons. The ability to do this allows some parties, who might otherwise refrain from marriage, to marry their loved one while still protecting dependents, family members or others in the event that disaster strikes years later. Common reasons for prenuptial agreements, include:

  • To protect and provide for children from a previous marriage, grandchildren, parents or other dependents and loved ones in the event of death or divorce.
  • !To protect and conserve a closely held or family business from intrusion, disputes or dissolution upon death or divorce.
  • Medicaid planning to protect assets from the government in the event that a spouse becomes ill and requires substantial medical care.
  • To exclude a gift or inheritance from the definition of marital property and, therefore, from an undesired distribution or liquidation in the event of death or divorce.
  • !To prevent an order requiring the sale of certain property to satisfy a divorce judgment.
  • To establish the terms under which each party will manage his or her separate finances or assets and to establish how associated investments, expenses, debts and other obligations will be handled.
  • !To protect substantial wealth or to protect against substantial debt.
  • !To ensure that an inheritance is received by the intended recipient(s).
  • !To provide for an expedient and hassle free dissolution of marriage.

A well drafted prenuptial agreement will provide certainty to the spouses. Such an agreement can determine most financial obligations of the husband and wife during the marriage or in the event of divorce (except those related to children), thereby eliminating uncertainty, contention and costly, lengthy or hostile divorce litigation. Without a prenuptial agreement, in the event of death, an estate may not be distributed according to the wishes of the deceased. For example, a bequest could be overridden by a spouse asserting a claim for a greater share of the estate. In the event of a divorce between parties without a prenuptial agreement, disputes frequently arise about support obligations, what assets should be included in the marital estate for purposes of dividing marital property, valuation of assets, the percentage of marital assets to be awarded to each party, and other matters. Often a third party, whether a judge, relative acting under a power of attorney or executor, must make decisions that the spouse would rather make. Prenuptial agreements allow the spouses to control these events.

The content of individual prenuptial agreements can vary dramatically, from a limited agreement that addresses only a specific asset, to an agreement that addresses all present and future property, assets, income, and spousal support, both during marriage and in the event of divorce. Prenuptial agreements can be rigidly structured or flexible. For example, many prenuptial agreements provide spouses with an increasing right to some asset(s) over the course of marriage or an increasing amount of support to reflect the duration of the marriage. Some agreements apply only in the event of death or only in the event of divorce or only to assets acquired before the marriage, etc. Other prenuptial agreements include so-called “sunset provisions” that terminate the prenuptial agreement upon a date certain or the occurrence of an event. In sum, a prenuptial agreement can be as standard or creative or as liberal or restrictive as the parties wish it to be.

The subject of a prenuptial agreement should be addressed early in a relationship, ideally before or shortly after engagement. The prospective spouse who wants the agreement should explain the reasons why the agreement would be helpful and be prepared to acknowledge the other party’s fears or misconceptions about such agreements. Once a couple decides to enter into a prenuptial agreement, the first step is to prepare a list of all assets owned by either prospective spouse and then talk about a fair resolution to achieve your objectives. Knowing what you want and what you agree upon will make the process of drafting a prenuptial agreement move quickly and will also make the process less emotional and less expensive. During this process, it is important to keep in mind that a prenuptial agreement should be completed at least thirty days before the wedding date.

The laws that govern prenuptial agreements vary from State to State, but in New Hampshire a legally enforceable prenuptial agreement is a voluntary, written agreement made after a full and complete disclosure of all relevant facts and after consultation with appropriate advisors. If a prenuptial agreement ever needs to be enforced, it will be closely scrutinized by the court to ensure that the spouses fully understood their agreement, that there was full disclosure and that the agreement was not obtained through fraud, duress, mistake, misrepresentation or non-disclosure of a material fact. Case law in New Hampshire emphasizes the importance of legal counsel in the process of drafting a prenuptial agreement, to ensure that the parties understand the effect of the agreement on their rights and have an opportunity for meaningful input on the terms of the agreement. An agreement entered into without each party being separately represented by an attorney or an agreement entered into less than one month before the wedding will likely be difficult to enforce. Consequently, it is best for each party to seek the advice of an attorney well before the date of the wedding.

A prenuptial agreement is not an indicator of distrust or lack of commitment. Instead, the document provides certainty to the spouses and is a simple, often very fair, planning mechanism to ensure that the spouses’ agreements before their marriage are heard and implemented.