Clarifying Hodgins: Premarital Pension Accruals Are Marital Property; The Hodgins Time-Rule Is the Default Only When No Premarital Service Exists

Introduction

In In the Matter of LeGault & LeGault, 2025 N.H. 24, the Supreme Court of New Hampshire addressed a recurring and consequential question in equitable distribution: how to treat the “premarital” portion of a defined-benefit pension when dividing property upon divorce. The petitioner, Clayton LeGault, Jr. (Husband), is a New Hampshire Department of Corrections employee vested in the New Hampshire Retirement System (a defined-benefit public pension). The respondent, Lisa LeGault (Wife), sought an equitable division that included an “offset” for the premarital pension accrual earned by Husband before marriage. The trial court divided the pension using the Hodgins formula (often called the “time-rule” or “coverture fraction”) and did not award Wife an offset from other marital assets for Husband’s premarital accrual, prompting this appeal.

The case presented two key issues: (1) whether the premarital portion of a defined-benefit pension is included in the marital estate under RSA 458:16-a, I; and (2) whether the statute abrogates the earlier decision in Hodgins v. Hodgins, 126 N.H. 711 (1985), which provides a default method for dividing certain pension benefits. The Court vacated the decree and remanded, clarifying the interaction between the statute and Hodgins and explaining the limits of the Hodgins default where premarital service exists.

Summary of the Opinion

The Supreme Court held that RSA 458:16-a, I, unambiguously includes all property—without distinguishing between premarital and marital acquisitions—within the marital estate, specifically including pensions (vested and non-vested). Accordingly, the “premarital” portion of a defined-benefit pension is not excluded as a matter of law from property subject to equitable division.

The Court further clarified that Hodgins remains good law but is a default method tailored to a different factual predicate—where no portion of the pension was earned before marriage. Hodgins’s time-rule (coverture fraction) continues to govern by default in that setting. However, Hodgins neither mandated exclusion of premarital pension accruals from the marital estate nor addressed how to apportion benefits when a portion was earned before marriage. Thus, trial courts may not treat Hodgins as foreclosing consideration or distribution (or offset) of the premarital portion.

Because the trial court’s narrative order was ambiguous—leaving unclear whether it excluded the premarital portion as a matter of law or, instead, considered it but exercised discretion to award it without offset—the Supreme Court vacated and remanded for further proceedings consistent with its clarification.

Analysis

Precedents Cited and Their Influence

• Hodgins v. Hodgins, 126 N.H. 711 (1985):
  • Context: Husband had a fully vested but unmatured defined-benefit pension; all accrual occurred during the marriage.
  • Holding: Recognized unmatured, vested pensions as distributable marital assets; when “actual and contingent values are unascertainable,” courts may use a deferred-distribution method awarding the non-employee spouse a fraction of each benefit upon pay-out—the “time-rule” or “coverture fraction.”
  • Key limitation clarified in LeGault: Hodgins addressed pensions with no premarital accrual. It did not decide what to do when there is premarital service. LeGault maintains Hodgins as the default in the no-premarital-accrual scenario and rejects reading Hodgins as categorically excluding premarital accruals from the marital estate.
• RSA 458:16-a (enacted after Hodgins):
  • Paragraph I defines “property” broadly to include “all tangible and intangible property,” expressly including “vested and non-vested pension or other retirement benefits.”
  • Developed the two-step framework later articulated in case law: classify property (legal question reviewed de novo) and equitably distribute (discretion reviewed for unsustainable exercise).
  • LeGault leans on this statutory text to confirm that premarital pension accruals are within the marital estate for distribution purposes.
• In the Matter of Routhier & Routhier, 175 N.H. 6 (2022):
  • Reiterates the two-step analysis: classification under RSA 458:16-a, I (de novo review), followed by equitable division under RSA 458:16-a, II (discretionary review).
  • LeGault follows this structure; the classification step unequivocally captures premarital pension accrual as “property.”
• In the Matter of Crowe & Crowe, 148 N.H. 218 (2002):
  • States that RSA 458:16-a, I makes no distinction between property brought into the marriage and property acquired during marriage.
  • Supports LeGault’s conclusion that the premarital portion is within the marital estate.
• In the Matter of Sarvela & Sarvela, 154 N.H. 426 (2006):
  • While all property is subject to distribution, the court may consider when and by whom property was acquired in deciding how to divide it.
  • LeGault invokes this to explain how the premarital portion may ultimately be allocated, offset, or awarded in full to one spouse in an equitable outcome.
• In the Matter of Preston & Preston, 147 N.H. 48 (2001):
  • All property acquired up to the date of the decree is subject to distribution.
  • Reinforces the broad classification step affirmed in LeGault.
• In the Matter of Sutton & Sutton, 148 N.H. 676 (2002), and Rothbart v. Rothbart, 141 N.H. 71 (1996):
  • Recognize and apply Hodgins’s time-rule in various contexts; Rothbart describes Hodgins as a “default formula.”
  • LeGault refines the default’s domain—default when no premarital accrual exists.
• In the Matter of Costa & Costa, 156 N.H. 323 (2007):
  • Vacates a retirement-benefits division and instructs that if a buyout is infeasible, the court should enter a decree per Hodgins.
  • LeGault is consistent with Costa in endorsing Hodgins where appropriate; the novelty in LeGault is how to proceed when premarital service exists.
• Am. Fed’n of Teachers—N.H. v. State of N.H., 167 N.H. 294 (2015):
  • Provides background that the New Hampshire Retirement System is a contributory, defined-benefit pension plan.
  • Contextualizes the nature of Husband’s pension; not directly determinative of division methodology.

Legal Reasoning

The Court’s reasoning proceeds in three moves:

1. Textual clarity of RSA 458:16-a, I (Classification Step): The statute includes “all” property, including pensions, without carving out premarital acquisitions. Citing Crowe, Sarvela, and Preston, the Court confirms that even property brought into the marriage is subject to distribution. Therefore, the premarital portion of a defined-benefit pension is part of the marital estate as a matter of law.
2. Scope and persistence of Hodgins: Hodgins is not abrogated. It remains the default method to divide defined-benefit pensions when:
   • the pension is unmatured (particularly if vested) and
   • there was no premarital accrual.
   Hodgins did not, however, address situations with premarital service. Thus, courts err if they treat Hodgins as requiring exclusion of premarital accruals from the marital estate or as foreclosing offsets for premarital accrual.
3. Application and remand due to ambiguity: The trial court used the Hodgins formula to divide the “marital portion.” But its order is ambiguous: did it exclude the premarital portion because it thought Hodgins compelled exclusion, or did it include the entire pension in the marital estate and then exercise discretion to award the premarital portion to Husband without offset? Because the order is unclear, the Supreme Court vacates and remands with instructions consistent with its clarifications.

In short, the Court harmonizes statute and precedent by placing Hodgins in its proper lane: a default allocation tool for pensions accrued entirely during the marriage, not a rule governing classification or the treatment of premarital accruals.

Impact and Practical Consequences

LeGault meaningfully reshapes divorce practice in New Hampshire regarding pensions with premarital service:

• Classification is expansive: The entire defined-benefit pension—including both premarital and marital accruals—is classified as marital property under RSA 458:16-a, I.
• Hodgins is targeted, not universal: The time-rule remains the default only when no premarital accrual exists. Where premarital service exists, courts may still apply the time-rule to the marital portion, but must separately consider the premarital portion as part of the overall estate and decide its equitable allocation or offset.
• Offsets are on the table: Trial courts have discretion to award the premarital portion to the employee-spouse, to split it, or to offset it with other marital assets (e.g., deferred comp, 401(k), cash). The key is an explicit exercise of discretion grounded in the statutory equitable factors.
• Clear findings required: Orders must make plain whether the court:
  • excluded the premarital portion as a matter of law (now error), or
  • included it as property and then, in equity, awarded it (with or without offset).
  The absence of clarity invites vacatur and remand, as here.
• Valuation strategy will evolve: Where feasible, parties may present actuarial evidence quantifying the premarital portion’s value (present value or other accepted measures), creating a record to support offsets. Alternatively, courts may use a hybrid: time-rule for marital accrual plus explicit treatment of premarital accrual via award/offset as part of the broader estate division.
• Negotiation and settlement leverage: Parties should anticipate bargaining around the premarital pension accrual. Non-employee spouses gain leverage to seek offsets; employee spouses gain clarity that any award of the premarital portion to them should rest on articulated equitable reasons (e.g., source of the asset, economic circumstances, length of marriage, contributions, etc.).
• Administrative implications: Because public plans like NHRS typically permit deferred distribution orders and survivor-benefit elections, decrees should carefully coordinate:
  • division of the marital portion under a time-rule,
  • any offsets concerning the premarital portion, and
  • survivor benefit designations (as the trial court did here).

Complex Concepts Simplified

• Defined-benefit pension vs. defined-contribution plan: A defined-benefit plan promises a formula-based benefit (e.g., based on salary and years of service) payable at retirement. A defined-contribution plan (e.g., 401(k)) is an investment account with a current balance. Defined-benefit plans are harder to value during divorce because benefits depend on future events (retirement age, salary at retirement, lifespan), hence the utility of the Hodgins time-rule.
• Vested vs. unmatured: “Vested” means the employee has a non-forfeitable right to the benefit. “Unmatured” means the benefit is not yet payable because the employee has not retired or met the conditions to start payments. Hodgins recognized that vested but unmatured pensions are distributable assets.
• Time-rule / coverture fraction (Hodgins formula): A fraction that allocates to the non-employee spouse a portion of each pension payment based on the ratio of service time during the marriage to total service time at retirement. It is a deferred-distribution approach when present value is impractical to ascertain.
• “Premarital portion” of a pension: The slice of the eventual pension attributable to service before the marriage. LeGault confirms this portion is still “property” within the marital estate under RSA 458:16-a, I, though the court may award it to the employee-spouse, split it, or offset it, in an equitable distribution.
• Equitable distribution vs. equal division: Equitable distribution seeks fairness based on statutory factors; it is not synonymous with a 50/50 split. Courts may consider, among other things, contributions, length of marriage, sources of property (including premarital origin), economic need, and opportunities for future acquisition of assets and income.
• Offsets: Instead of literally dividing every asset, courts can award one spouse an asset (e.g., a premarital pension accrual) and compensate the other with a different asset (e.g., greater share of a 401(k), cash, or other property) to achieve an equitable overall result.
• Survivor benefits: Defined-benefit plans often offer options that continue a benefit to a designated “survivor” if the retiree dies. Divorce decrees can and often should address who will be the beneficiary and on what terms, as the trial court did here by adopting Wife’s beneficiary designations.

Practical Guidance for Trial Courts and Practitioners

• Follow the two-step analysis explicitly:
  1. Classify all property under RSA 458:16-a, I—including the entire pension (premarital and marital accruals).
  2. Distribute equitably under RSA 458:16-a, II, making clear findings on the treatment of the premarital portion (award, split, or offset) and the reasons why.
• Use Hodgins where it fits: If there is no premarital accrual, Hodgins’s time-rule is the default. If there is premarital accrual, the time-rule can still be used to apportion only the marital portion, but courts must separately address the premarital portion as part of the overall equitable distribution.
• Build the record: Present actuarial evidence if practical to quantify premarital and marital portions, consider present-value analyses, and propose concrete offset packages. Clear numbers help the court avoid remand.
• Draft precise decrees: Specify:
  • the method for dividing the marital portion (e.g., Hodgins fraction),
  • the treatment of the premarital portion (and any offset), and
  • survivor benefit elections and pre-retirement death benefit assignments.

Conclusion

LeGault delivers a pivotal clarification in New Hampshire family law. It holds that RSA 458:16-a, I, classifies the entire defined-benefit pension—including premarital accruals—as marital property subject to distribution. It preserves Hodgins as the default time-rule for cases with no premarital service, while limiting Hodgins’s reach by recognizing that it did not address pensions with premarital accrual. Consequently, trial courts must not reflexively exclude the premarital portion; instead, they must classify it as property and then exercise equitable discretion—whether to award it, share it, or offset it—supported by clear findings.

The Court’s vacatur and remand underscore a core message: precision matters. Orders must make explicit whether the court exercised discretion or misapprehended its authority. Going forward, LeGault will promote more transparent, equitable pension divisions by ensuring that premarital pension accruals are considered in the marital estate and that Hodgins is used in its proper domain.

---

Case: In the Matter of LeGault & LeGault, 2025 N.H. 24 (N.H. May 29, 2025) — Supreme Court of New Hampshire (Countway, J.; MacDonald, C.J., Bassett and Donovan, JJ., concurring).