How To Bulletproof A Prenup

Most people enter into marriage expecting their relationship with their partner to be a lifelong mutual commitment. For many individuals, drafting a prenuptial agreement – designed precisely to outline how property will be divided and administrative matters related to a parting of ways handled in the event that the marriage ends in divorce – can feel like a defeatist proposition: a way of assuming failure before an attempt has even been made. In reality, however, a prenuptial agreement, more popularly called a prenup, can often be a highly practical tool whose preparation simply requires acknowledging the unpredictability of life. Married couples decide to divorce for all kinds of unexpected reasons, many of which have nothing to do with a loss of mutual esteem. In addition to giving individuals entering a marriage tools to protect themselves, prenups also allow each partner to establish provisions ensuring the other person in the relationship will be treated fairly – even if a time comes when neither party feels like “playing fair.” To be effective, however, a prenuptial agreement must not only reflect your shared wishes but do so in a legally enforceable manner. Schedule a consultation with Friedman & Bresaw, PLLC to discuss your prenup preparation with a New Hampshire family law attorney. Reach us in Meredith or Laconia by calling 603-707-4800 today.

What Exactly Does a Prenup Do?

A prenuptial agreement is the more popular of two very similar types of contracts used in family law that together are called “marital agreements.” The other type is the post-nuptial agreement, and as their names suggest these two forms of marital agreement are distinguished primarily by when they are signed, relative to the couple’s wedding. Both types of marital agreement serve the same functions and follow the same basic structure. They each specify the rights and obligations of each of the partners in the event of a divorce, usually with an emphasis on how the spouse’s shared (marital) property will be divided.

Is a Prenup a Red Flag?

The goal of a prenup (or a postnup) is to ensure that the parties can go their separate ways with mutual respect and dignity, and without messy court battles over who deserves their household furnishing or whether either side owes the other post-divorce financial support, if the time ever comes when they realize that the truest path forward is to dissolve their marriage. With a prenup, individuals entering into a marriage do not necessarily assume that they must someday part ways. In fact, Cornell Law School’s Legal Information Institute points out that clauses in prenups that appear designed to “unreasonably encourage” divorce are often ruled legally unenforceable, as being incompatible with public policy, when challenged in court. Against this legal and cultural backdrop, couples contemplating prenuptial agreements have every incentive to draft prenups that honor the spirit of their marriage vows and the many legal as well as personal and social functions of marriage.

How Does a Prenuptial Agreement Work?

Every couple is unique, so the terms in one prenuptial agreement may be quite different from those found in another couple’s agreement. However, there are a few common areas of concern that most prenuptial agreements will need to take into consideration in order to be comprehensive enough to do their job, and legally enforceable enough to survive a challenge. Following these steps can help couples to refine their approach and develop a customized prenup that works for their needs.

Think Like You Are in Business

The parties to a business contract are often delighted to be working together. Even when the process of negotiating a deal both sides consider acceptable takes substantial time and effort, in many cases there is genuine mutual enthusiasm for the arrangement. The parties signing the contract nevertheless include clauses specifying grounds for early termination and the procedures that will be followed if one or both parties are unable to continue with their end of the bargain, or if either side determines they must withdraw from the deal. In other words: Business associates negotiate and sign contracts in good faith, assuming that all involved will perform their responsibilities as described in the contract terms. They also recognize that life is unpredictable.

Rather than allowing unfortunate lapses on either side to come as a shocking betrayal from which they must find a path forward under the stress caused by the collapse of an agreement on which both relied, they put plans in place while they are still flush with the excitement of a new venture, ensuring that each side has practical steps to take and essential protection against the risks they might otherwise run if the other party falls short on what they have promised to deliver. Adopting this same pragmatic approach helps to eliminate much of the unease many engaged couples feel around developing prenuptial agreements, and sets both partners up to make practical requests and reasonable concessions in devising the prenup terms.

Identify All Your Personal Assets and Liabilities

Generally, in the absence of a prenuptial agreement any property either party brings into a marriage will remain separate property in the event of a divorce, meaning those assets or debts will not be subject to division of property by a New Hampshire family court. Following the same logic, any assets a couple acquires or debts either spouse takes on after they are married will usually be treated as marital property, and therefore subject to division between the spouses according to the equitable distribution principle specified under RSA 458:16-a. One of the main reasons for creating a prenuptial agreement in most cases is to avoid the necessity of having the division of property decided by a New Hampshire court, so the prenuptial agreement is a place to set out specific expectations for how property will be divided.

One important issue many couples may wish to address is the commingling of property, a process whereby the use of otherwise separate property in the pursuit of shared aims can lead the separate property itself to be considered so intermingled with marital property that the formerly separate property can no longer be distinguished and must therefore be treated as marital property. Drafting provisions for specific assets or types of property in the prenup can help to protect their separateness or concede in advance a planned commingling and a strategy for how the resulting marital property should be split in a divorce, given the initially unequal contributions. Any of these approaches will need to begin with a thorough, detailed, and accurate accounting from both sides, very similar to the comprehensive financial disclosures spouses might otherwise expect to produce during the course of divorce proceedings.

Address Predictable Issues Related to Property Division

After you have prepared your individual financial statements and drafted clauses to account for how any currently separate property will be maintained, many couples still have a number of other issues related to the potential division of property yet to address. If one partner is working to help the other obtain a degree or start a business with the expectation that the shared household will benefit from the results, then the prenup offers an opportunity to spell out how a partner is no longer able to enjoy the fruits of that investment after a divorce will be compensated for their contributions.

Similarly, many couples have an understanding whereby one partner plans to become a stay-at-home parent if and when they start a family. Even if the stay-at-home parent continues consulting or volunteer work in some capacity, the retreat from the full-time workforce typically results in long-term limitations on that spouse’s earning potential. A prenuptial agreement offers the chance for individuals entering into a marriage with this type of understanding to establish how the partner who maintains a full-time career will compensate the other for the lifelong financial limitations created by the sacrifice they made in the name of shared goals, if the time comes when the spouses need to part ways and no longer share a single household income.

Prepare and Sign the Prenup Well in Advance of the Wedding Date

One of the more common grounds for challenging a prenup is the allegation of duress. Often close proximity to the wedding date is held up as evidence that one party used manipulative tactics to pressure the other into signing a prenuptial agreement whose terms the pressured spouse was unhappy with or simply had insufficient time to review. The specifics will depend on the circumstances, but a typical argument is that the partner allegedly applying this pressure deliberately tightens the timeline to ensure that the other party will sign an agreement that is unfavorable to his or her interests rather than “ruin” the wedding and cause stress, embarrassment, and inconvenience to friends and family, in addition to “wasting” what in many cases may be thousands, if not tens of thousands, of dollars in wedding-related expenses.

Preparing the prenuptial agreement and ensuring it is signed by both parties well in advance of the wedding date – ideally even before formal invitations have been sent out – can help to forestall this challenge, as well as making it more difficult to prove in court if attempted. If you are in the Belknap County area and beginning your wedding planning process, consider booking a consultation with one of the family lawyers at Friedman & Bresaw, PLLC to discuss how a prenup might fit into your preparations.

Work With an Attorney

Most people have relatively limited experience in drafting contracts of any kind. Even those who handle financial agreements on a routine basis are bound to have a few “blind spots” and preconceptions when it comes to the clauses included in their own prenups. Consider retaining your own attorneys to ensure that each spouse has independent advice and legal support throughout the entire process. Either attorney should be able to develop a draft of the prenuptial agreement, or they may collaborate on the document by each contributing key clauses that have been important to their client. Family law attorneys with experience in marital agreements are often well-positioned to identify terms that might be overly vague or otherwise difficult to enforce if needed, and can typically suggest adjustments to clarify and improve the legal enforceability of the agreement. Regardless of how the prenup drafting policy unfolds, you will likely want to make sure you have your own attorney review the document on your behalf before you sign.

Who Needs a Prenup? Get Advice From a New Hampshire Family Law Attorney

Almost any couple approaching marriage can benefit from an ironclad prenup. Cultural tropes and entrenched narratives sometimes lead individuals preparing to enter into a marriage to regard prenuptial agreements with skepticism, but the truth is that the provisions in a prenup – like the clauses for early termination or withdrawal in any other contract – do not assume an untimely end to the relationship. Rather, they outline a plan for the orderly division of shared resources and for ensuring that both parties are appropriately provided for if events take an unexpected direction. To fulfill these goals when needed, however, a prenup must be drafted with care and precision, and signed under conditions that make clear each party’s freedom of choice in accepting the prenup’s terms. Work with a family law attorney in Belknap County to devise your prenup as you embark on this exciting stage of your life’s journey. Call 603-707-4800 from anywhere in the Lakes Region to book a call with Friedman & Bresaw, PLLC.