Postnuptial Agreements

Attorney Alyssa Graham

October 2013

Today most people have some familiarity with prenuptial agreements, which are increasingly common and certainly not just for Hollywood celebrities anymore. Postnuptial agreements, however, are a newer concept, although also increasing in popularity. A postnuptial agreement is similar to a prenuptial agreement except that it is entered into during the marriage, instead of before the marriage.

A postnuptial agreement is a written contract, entered into by a married couple, addressing the couple's assets and affairs. While they can be used to specify rights and obligations of property division in the event of divorce, postnuptial agreements need not be seen only as a kind of divorce planning. They can also be used for other purposes, such as outlining the rights and obligations of the parties in the event of death, which can be helpful in many situations. For example, in a second marriage, a couple can enter into a postnuptial agreement to protect and preserve assets for children from a first marriage, when the parties had not entered into a prenuptial agreement. Similarly, postnuptial agreements can be used in a first marriage to preserve assets for children in the event of a future second marriage by a surviving spouse. A postnuptial agreement may also be useful if there are changes in the financial status of either spouse, including one spouse receiving an inheritance. Finally, they could be useful if one spouse enters into a partnership or closely-held business and wants to protect his or her business partners from potential claims by his or her spouse.

For many years, the enforceability of postnuptial agreements in New Hampshire has been uncertain. New Hampshire did not officially recognize postnuptial agreements in the same way that it did prenuptial agreements, which were authorized by statute. However, many practitioners believed that postnuptial agreements which met the basic requirements for prenuptial agreements would be enforceable under New Hampshire common law.

The New Hampshire Supreme Court has recently confirmed the opinion of these practitioners and upheld the validity of postnuptial agreements under New Hampshire common law (see In Re Estate of Richard B. Wilber, 2013). The Court confirmed that at a minimum a postnuptial agreement must meet the essential requirements of a prenuptial agreement, which are that the agreement is entered into voluntarily, knowingly and fairly. It is important to ensure that there is no fraud or coercion when entering into the agreement, that the terms of the agreement are fair and reasonable, and that all assets of the parties have been fully disclosed. Generally, it also means that each of the parties should be represented by counsel, in order to explain the rights and benefits which are accorded under law as a result of the marriage, as well as the obligations which are imposed and the differences between the proposed agreement, statutory rights and obligations.

In upholding the validity of postnuptial agreements, the Court followed the modern trend of courts across the country in recognizing and enforcing postnuptial agreements. While this is a big step forward, there is still some uncertainty about what a court will require before it will enforce such agreements. The New Hampshire Supreme Court did not reach a decision on whether they would hold postnuptial agreements to a higher standard than prenuptial agreements as some courts have held in other states. As a result, if you are considering a postnuptial agreement, at a minimum, the essential requirements of a prenuptial agreement must be met.

Creating a postnuptial agreement does not need to be a negative experience. Even though the process necessarily involves some negotiation between spouses, the end result can be that the parties feel more secure.

If you do enter into a postnuptial agreement, after the agreement is signed, it is important that the parties conduct the necessary follow-up. This may involve confirming or changing beneficiary designations on retirement accounts and life insurance policies so that they are consistent with the terms of the Agreement. Also, after an agreement is signed or as part of the process of preparing an agreement, estate plans should be reviewed and modified, if necessary, so that they are consistent with the terms of the agreement.

If you are considering a postnuptial agreement (or a prenuptial agreement) we would be happy to work with you.