Getting a prenuptial agreement or at least meeting with a family law attorney to find out what you are getting into before you get married, is a very good idea. A prenuptial agreement can protect property that you own before the marriage, including inheritances and it can protect your own income and guard against potential alimony claims. It is also a very important tool for potential estate planning that will allow you to protect children from a previous relationship. But are they enforceable in Michigan?
Prenuptial Agreements Are Valid and Enforceable in Michigan.
Prior to 1991, prenuptial agreements were not enforceable in Michigan because it was believed that the existence of such a contract would encourage divorce and thus against the public policy of encouraging marriage. The seminal case of Rinvelt v Rinvelt, decided by the Michigan Court of Appeals in 1991, held that prenuptial agreements are valid and not void against public policy as a contract that encourages marriage but rather these contracts encourage marriage by allowing greater predictability, allowing for secure planning for the future and allowing couples to be masters of their own destiny. In addition, forcing the marrying couple to consider and plan their financial future should really lead to a stronger understanding of one another and a more secure relationship and future for the parties.
The court stated that in order for a prenuptial agreement to be valid, there is a three factor test:
- Was the agreement obtained through fraud, duress, or mistake - misrepresentation - nondisclosure of a material fact?
- Was the agreement unconscionable when executed?
- Have the facts and circumstances changed since the agreement was executed to make the enforcement unfair or unreasonable?
The first condition is handled through careful drafting of the prenuptial agreement by the attorney and the inclusion of statements disclosing the relevant facts. The agreement will also have exhibits attached that contain statements of each party's financial condition, including incomes, savings, property and debt. There will also be specific disclaimers about the contract being entered into by each of them under each party's own free will free of duress.
The second factor is usually satisfied again by having the attorney carefully draft the agreement, If both parties are advised by counsel, meaning that each party should really have his or her own attorney review and sign the agreement, then the court will almost always find that it was not unconscionable when written. It is assumed that both parties are adults and have had their rights explained to them by their attorneys and therefore the court does not often find the contract unconscionable when written.
The final factor seems like it could be problematic, however, subsequent courts have ruled that only unforeseeable changes in facts or circumstances could make the agreement unfair or unreasonable. Further decisions by the courts have shown that almost everything is foreseeable including that one party may do exceptionally well with a business or career while the other does not, or that one party may have greater assets at the time of a divorce or separation than the other party, and even such issues as accidents, illness and infirmity have been ruled as foreseeable and therefore did not prevent the enforcement of the prenuptial agreement.
A prenuptial agreement can be tailored to whatever agreements the parties may reach, including sunset clauses where after a period of years the contract becomes void or allowing for certain awards of property based upon a variety of factors including if one party takes time out of their career to raise children. Whenever considering marriage, it is always wise to at least meet with a family law attorney to discuss how one's financial future and stability will be affected by marriage. Please do not hesitate to contact us to schedule a consultation.