Q: I just got engaged. Should I enter into a Prenuptial Agreement?
A: Prenuptial agreements are growing in popularity as couples are generally marrying later in life after acquiring significant assets, and because the number of second or subsequent marriages is increasing. Millennials in particular are choosing premarital agreements as the preferred option to protect separate property holdings, business interests, and to avoid potential alimony disputes.
Prenuptial agreements are an effective approach where parties wish to preserve their respective estates to provide for children from prior relationships, or if either party is expecting a large family inheritance. In general, prenuptial agreements alter or confirm the legal rights that would otherwise accrue to a spouse by virtue of marriage in the event of a dissolution or premature death. In New Hampshire, a surviving spouse is generally entitled to at least 1/3 or more of the decedent’s probate estate. Further, upon divorce, spouses generally have a right to seek alimony and a share of the marital estate. Parties are free to design their prenuptial agreement to waive or confirm many of these rights, while eliminating potential future disputes.
Often parties wish to design their prenuptial agreement to exclude or “protect” pre-acquired assets, family business interests, or expected inheritances, preserving these assets for children from a prior marriage, or to ensure that closely-held family business assets remain with lineal descendants.
Prenuptial agreements are contracts and, if challenged by a party, are analyzed by courts under traditional contract law principles. Generally, New Hampshire law supports the validity of a prenuptial agreement. However, because the parties have a close, confidential relationship with the potential for undue influence, courts will use heightened scrutiny when reviewing prenuptial agreements. The court will determine whether the agreement was executed by each party free from any pressure or duress, whether there was complete and adequate disclosure of all financial circumstances, and whether each had adequate time to review the document. It is important for each person to have separate legal counsel to advise them on their rights. The court will determine whether the agreement was fair at the time it was executed, as well as apply a “second look” at the time the agreement is sought to be enforced.
Is a prenuptial agreement right for you and your fiancé? Perhaps. You should consult with your attorney to learn how you and your fiancé might benefit from a well-designed prenuptial agreement.
Know the Law is a bi-weekly column sponsored by McLane Middleton. Questions and ideas for future columns should be emailed to knowthelaw@mclane.com. Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.