By: Faye Goldberg
Q. I know a Prenuptial Agreements is signed before the wedding, but what does a Prenuptial Agreement do?
A. A Prenuptial Agreement lays out what will happen to your and your spouse’s assets and income in the event of divorce, separation or death.
Q. Do I really need one if I’m not wealthy?
A. It depends. If you have family assets, like a summer home or a family business that you would like to protect, it would make sense to do that in a Prenuptial Agreement.
If by the time you are getting married you have pursued a career that has enabled you to accumulate assets, be it real estate, stocks, savings accounts, retirement accounts or other investments, you may want to ensure those assets are protected in a Prenuptial Agreement.
If you have children from a prior relationship or marriage, you may want to secure for the child/children certain assets you own prior to the upcoming marriage.
If your future spouse has debt, such as college, medical school or law school loans, or business loans or other debt, a Prenuptial Agreement can ensure that you will not be responsible for this debt in the event the marriage ends.
Q. Does a Prenuptial Agreement have to be fair?
A. In New Hampshire a Prenuptial Agreement is presumed to be valid; however, if at the time the Agreement is entered into the provisions of the agreement are so unreasonable that they rise to the level of being unconscionable, the Prenuptial Agreement will not be enforceable. Also, even if a Prenuptial Agreement is valid at the time of signing, over time circumstances may change so much from when the agreement is originally signed, as to render the agreement unenforceable. For example, if a Prenuptial Agreement awards a business to a spouse, during the 25 year marriage the other spouse works in that business and those efforts substantially increase the value of that business and the parties have 5 children, the circumstance of the parties can be deemed substantially changed sufficient to render the Prenuptial Agreement unenforceable.
Q. Are there things that need to be done before the Prenuptial Agreement is signed?
A. Each party must disclose his/her assets and income. The more complete and truthful the disclosure, accompanied by supporting documentation, the better. This important step mitigates against a Prenuptial Agreement being rendered unenforceable due to fraud, mistake, and/or misrepresentation or nondisclosure of a material fact.
Both parties need to have a sufficient amount of time to consult with counsel, accountants and other professionals if they so desire. This means a draft of the Prenuptial Agreement should be provided to your intended well before the wedding date. The earlier the draft is provided, the greater the likelihood of its enforcement down the road. When the final form is signed by the parties, both parties should have a very good understanding of what the agreement provides, and what the assets, liabilities and income of both parties are. While having the opportunity to consult with counsel is absolutely necessary, it is worth the expense of ensuring the other party actually is represented by independent, competent counsel.
Another reason for having the parties sign a Prenuptial Agreement as long before the wedding date as possible is to eliminate even the appearance of duress. A claim that a person was under duress when he/she signed a Prenuptial Agreement is less convincing if it is signed 90 days before the wedding instead of 1 or 2 days before the wedding after the guests have been invited and wedding expenses have been incurred.
Q. Is it possible to have a Prenuptial Agreement prepared that is absolutely bulletproof, i.e., that will always be enforced, no matter what?
A. No, because there is no way to prevent the occurrence of changed circumstances that are so far beyond the contemplation of the parties when they signed the Prenuptial Agreement that its present application to a spouse would be so one-sided that its enforcement would be unconscionable which is the standard in determining whether a Prenuptial Agreement is not enforceable.
Q. Why can’t the Prenuptial Agreement state that if during the marriage the parties have children the agreement still applies or the agreement applies even if the parties are married for 30 or more years?
A. There are public policy considerations that come into play with Prenuptial Agreements. An agreement that is more thoughtful toward fairness in the future, for example, an agreement that provides for larger amounts of alimony and/or longer periods of alimony the longer the marriage, has a better chance of being enforced than one that is not.
Q. Given the possibility that a Prenuptial Agreement may be unenforceable, is it even worth the time, effort and expense to have one done?
A. If you want to protect certain assets, provide for children from a prior marriage or relationship and avoid the uncertainties inherent in litigation, then the answer is yes, with the emphasis being on time and effort to make sure it is done right. Allow for a sufficient amount of time well in advance of the wedding date to have your attorney prepare the document, provide complete and full disclosure of your assets, liabilities and finances, share it with your intended, allow him/her to review it with an attorney and provide you with a complete disclosure of his/her assets, liabilities and finances, and for you both to sign the agreement with each party’s counsel present.
A well thought out Prenuptial Agreement properly prepared is the best way to plan for the future, even with its uncertainties.