In New Hampshire, prenuptial agreements are powerful legal contracts. They change a couple’s rights and entitlements upon death or divorce, and they are presumed to be valid and enforceable. Prenuptial agreements are often requested before marriage to preserve premarital or generational wealth, protect business interests, protect children of a prior marriage or to provide clarity in the event of the unexpected. However, the agreement’s true value lies in whether it will be enforced when it matters most.
New Hampshire law (RSA 460:2-a) recognizes prenuptial agreements as valid contracts created in contemplation of marriage. Courts in New Hampshire and elsewhere will generally enforce prenuptial agreements with the same weight as any other contract, so long as certain procedural and substantive fairness standards are satisfied. Prenuptial agreements cannot address children, parenting rights, or child support.
In the event of divorce, courts scrutinize the preparation of the agreement and review the substantive fairness of the agreement both at the time it was drafted and at the time of enforcement. The mere passage of time is irrelevant. An agreement may be upheld one year or thirty years after execution. Financial disclosures, voluntariness, substantive fairness, negotiation, and representation are of much more importance to whether the agreement will be enforced. Each topic is addressed in turn below.
- Full and Accurate Financial Disclosure
Financial transparency is essential to the enforceability of a prenuptial agreement. A party can only waive rights to assets of which they are aware. Therefore, each party must fully disclose their assets, liabilities, and income. An asset schedule that lists all assets and liabilities should be appended to the prenuptial agreement. Tax returns should also be appended to the agreement as exhibits or, if too voluminous to be practical, as attachments. The agreement should confirm that the returns were reviewed by the parties with counsel. A prenuptial agreement with such disclosures will be viewed favorably. A prenuptial agreement with no disclosures will be viewed with skepticism but may be redeemed by proof that financial information was exchanged.
Inadequate disclosure is one of the most common and lethal grounds for invalidation. If a court determines that a party misrepresented assets or omitted material financial information, the agreement may be set aside entirely. In divorce, invalidation of the agreement may lead to an equal division of all assets pursuant to RSA 458:16-a. For individuals with substantial assets, precision in disclosure is not optional; it is critical.
- Voluntariness
A prenuptial agreement must be entered into voluntarily. Courts look carefully at whether either party felt pressured, coerced, or deprived of meaningful choice. Timing is an important consideration. Agreements presented and signed months before the wedding will generally avoid a timing or voluntariness challenge. Agreements presented shortly before a wedding, particularly without adequate time for review, will be given increased scrutiny by courts. While the last-minute presentation of an agreement, review or execution does not automatically invalidate an agreement, it is not helpful and will cause the court to examine the agreement’s enforceability closely. Any agreement signed within thirty days of the date of the wedding will be subject to such increased scrutiny.
- Independent Representation and Meaningful Negotiation
Independent, knowledgeable legal counsel for each party is one of the strongest safeguards against invalidation. It is especially helpful if counsel for the parties has experience in family law or estate planning. Presence of counsel, understanding of the agreement afforded by counsel, and ability to negotiate terms are helpful facts, even in the event of closer scrutiny.
Courts expect informed decision-making and an opportunity for input. Changes made at the request of the party who did not seek the agreement, no matter how small, are helpful to the enforcement of the agreement. In contrast, a complete absence of negotiation, or evidence that one party did not understand the terms, may undermine enforceability. This is especially relevant in relationships involving significant disparities, for example, a disparity in business sophistication, a language barrier or a significant education differential.
- Substantive Fairness
To be enforceable, a prenuptial agreement must be substantively fair at the time of execution and at the time of enforcement. This does not mean an equal division or anything close to it. Rather, the court seeks to prevent gross unfairness, unconscionability, or an inequitable outcome under the current circumstances. New Hampshire courts recognize that life evolves. A dramatic and unforeseen change, such as disability, severe financial disparity, or substantial depletion of one party’s assets, could lead a court to revisit whether enforcement of an otherwise fair agreement would be unfair.
In conclusion, prenuptial agreements, in most cases, are enforced, minimize litigation, and, therefore, protect privacy. If a prenup is upheld, the agreement will control the division of assets. If not, the court will proceed under standard equitable distribution principles as set forth in RSA 458:16-a. Ideally, parties will agree upon enforceability, which is common, and proceed with an outcome consistent with the agreement. Some parties agree to a minor adjustment reflecting the equities, given the passage of time.