Prenuptial and Postnuptial Agreements
Both prenuptial and postnuptial agreements are considered to be binding contracts in Michigan.
A prenuptial agreement, sometimes called a “prenup,” is a contract that is executed before a marriage that describes what the responsibilities of the parties are in the event that the marriage is later dissolved. In contrast, postnuptial agreements are contracts that married parties execute after the date of their marriage that describes their responsibilities in the event of a divorce.
It is most common to see a prenuptial agreement arise where one party entering into a marriage has significantly more assets than the other party. While the prenup is available to everyone, it would be an uncommon legal tool for younger couples who are beginning to build their asset base. It is more commonly seen for older couples who are entering a second marriage.
Many people have an inherent negative view of prenuptial and postnuptial agreements. After all, the agreements are specifically contemplating that a marriage will be dissolving at a later date.
Valid Reasons for a Prenuptial Agreement
- If a divorce comes about, the agreement will streamline the divorce process, thus eliminating significant legal fees and emotional exhaustion.
- It provides both parties with a crystal clear picture of what will happen upon a divorce or a death of one of the parties
- It can define what the level of spousal support (if any) will be in the event of a divorce.
- It can ensure that children from a prior marriage are not supplanted by a new spouse when addressing inheritances or distributions.
Many people view pre and post-nuptial agreements as nothing more than an estate planning tool. These agreements can ensure that certain assets are distributed in a certain manner in the event that one of the parties dies.
Sometimes, the parties will try to put provisions into a pre or post-nuptial agreement that are not legally binding. For instance, provisions that direct who will have custody of a child after one party dies or if a divorce occurs have been held non-binding. Additionally, pre and post-nuptial agreements which have provisions that dictate future child support will be disallowed.
In order for a prenuptial agreement to be binding, it is important that it be thoroughly drafted from the beginning. While there are a truly unlimited number of issues that a pre-nuptial agreement may address, there are certain things that ought to be included within the agreement.
Details That Should Be Included in a Prenuptial Agreement
- A thorough listing of both parties' pre-marital assets
- A thorough listing of both parties' pre-marital debt
- A statement describing how assets that may be inherited during the course of the marriage will be distributed
- A statement describing how new assets accumulated during the course of the marriage will be distributed
- A statement describing how new debts accumulated during the course of the marriage will be distributed
- A statement describing how both debts and assets will be distributed as it relates to children that are born during the course of the marriage
While a good family law attorney should make every effort to properly draft a prenuptial agreement, the enforceability of the agreement can never be totally guaranteed. The fact is that very few cases regarding prenuptial agreements have ever been decided by the Michigan Court of Appeals or the Michigan Supreme Court. Thus, there is very little “case law” for family law attorneys to be guided by. Nonetheless, there are certain basic contract theories that are applicable and can help ensure that a prenuptial agreement is later held by a court to be valid. A court will be concerned with:
- Whether the agreement was procured via fraud, duress or material misrepresentation
- Whether the agreement is unconscionable
- Whether there has been such a material change in facts since the executing of the agreement that enforcing the agreement would yield an unjust result
In reality, the vast majority of people considering marriage do not need a prenuptial agreement. In fact, the need for such an agreement is rare. However, there are certain circumstances in which the parties may consider a prenuptial agreement.
Circumstances When a Prenuptial Agreement Should Be Considered
- One party owns a home outright or has a home with a great deal of equity
- One party has stock or retirement accounts that can increase in value
- One party owns a business
- One party is expecting to receive a significant inheritance at a future date
- One party has children from a previous marriage or relationship
- One party is coming to the marriage with significant debt
- One party is coming to the marriage with a large tax liability
As you can see, the drafting and creation of prenuptial agreements are complicated and take numerous facts into account. It is the type of agreement that likely cannot be created on your own. A qualified Michigan family law attorney will know how to best advise you as to whether or not you are in need of such an agreement.
If you are considering divorce or have been served divorce papers, call me. I've helped hundreds of people protect their family and their assets and I can help you. For a FREE Consultation Call (248) 921-7164