Before You Say "I Do"

Everyone wants their marriage to last, but what if it doesn’t?



Illustration by Stephen Sauer

S omewhere between  “I love you” and “I do” couples are increasingly being asked to “sign here” on prenuptial agreements. And since nearly half of all marriages end in divorce and thus leaving marital assets up for grabs, these agreements make sense for many couples — especially those with much more money than their future spouse.

“Marriage is not all romance,” says David DePuy, a Manchester trial lawyer, who has an active family law practice. “It’s a financial partnership.”

A prenuptial agreement is a contract between couples before matrimony (if after, it becomes a postnuptial) that divides up existing assets but can also govern future assets should the marriage end. “A good prenuptial agreement,” says Bobbie Hantz, a Manchester litigator specializing in family law, “lets everyone know going in and [what it will look like] going out.”

A simple case would be as follows: An eligible bachelor with a family cottage, an interest in a family business or a trust fund falls in love and upon marriage his assets automatically become “marital property.”  

“Marriage is not all romance. It’s a financial partnership.”

This doesn’t mean a judge in a divorce case would necessarily divide ownership equally, but there is that risk. New Hampshire and most of the states east of the Mississippi are what are called “Equitable Division” states, meaning that the division of assets can be disproportionate. Nine western states operate under a “community property” law, where assets are always jointly held, distributed 50-50. State law provides 15 factors to be considered in determining how to distribute marital assets.

This is murky area and not ground that any good divorce lawyer wants to stand on in court. A prenuptial agreement makes the process more predictable and something akin to an insurance policy for divorce.

Prenuptial agreements have evolved in the past half-century — from being an estate-planning tool usually triggered by death and to distribute assets between family members, typically the deceased person’s current wife and children from a previous marriage. “You can’t write a spouse out of a will unless there is compensation,” says Hantz.

Prenuptial agreements must be in writing, entered voluntarily, include full disclosure of assets and can’t be excessively unfair. But beyond that the “rules are limitless,” says DePuy.  Alimony and child support can’t be eliminated. The cost varies from around $5,000 to $10,000.

“All types of situations” are covered, DePuy says, but they are “written in favor of whoever has the most money.” So both sides need legal representation — and they should be negotiated well in advance of the wedding. Although, this not always the case. “Some people just put it off,” says Hantz, because they’re “too busy” putting together a wedding.

Others, DePuy adds, “have stars in their eyes” and think “everything is fine — we’re not going to get divorced.” 

“Some people put off a prenuptial agreement because they’re too busy.”

The primary task is to get a full accounting of all assets and then establish a fair market value for each. Privately held businesses and rare valuables can be what DePuy calls an “accounting nightmare” and take considerable time and expense. Future inheritance should be factored. At any point, the “have-not” spouse can waive their rights.

DePuy advises clients to “make it fair” and “treat the primary home as a joint asset.” Hantz concurs, while the prenuptial agreements usually hold up in court, the judge still has broad power to be sympathetic to the “have-not” spouse.

Some of the popular provisions included reflect state statute, like a longevity clause that slowly shifts ownership of an asset over time. Some transfer ownership at a rate of 1 to 3 percent per year. This recognizes the basic principle that a short-term marriage should, according to Concord Attorneys Chuck Douglas and Carolyn Garvey in a Bar Journal article, “be put back in the same position they were in prior to the marriage.”

Another common provision financially penalizes a spouse who commits adultery.

It’s not just movie stars and millionaires who use prenuptial agreements. Societal changes seem to be fueling their growing popularity. People are marrying later; families are more complicated, less independent; increased wealth parity and some people have been, according to DePuy, “burned once” by divorce and are determined to be more protected as they enter marriage again.

The big question is whether prenuptial agreements make marriages stronger or divorce less hostile. At least, it establishes a legal and formal framework for decision-making; at worst, it gives couples something to fight about. “It’s a touchy subject,” DePuy says, “but really one people should have.” 


FYI

It’s a fifty/fifty split unless ...
New Hampshire is an equitable division state. So once you tie the knot all property, regardless of who owns it or brought it into the marriage, belongs to both. That doesn’t mean the judge will automatically split marital assets equally, but each has the opportunity to make a claim to do something other than a 50/50 split. The judge will consider various factors including duration of the marriage, value of property, economic status of each, the actions by each party to improve the asset’s value, income disparity between partners and if one party is at fault for the divorce. The best way to avoid a court-ordered property division is to establish in advance how certain assets will be distributed.

Need to Know

  1. Talk about finances — pull out personal assets that have special meaning or are essential to your life should the marriage fail.
  2. Be prepared. “Before you die,” Attorney DePuy says, “you’ll probably get divorced. The odds are pretty good.”
  3. Being fair is the best way to go. Your ex-spouse and the judge may look favorably upon you.
  4. If assets are separate, keep them separate. Don’t paint or pay the taxes on your spouse’s family cottage.
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