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Prenuptial Agreements in Michigan: What Happens to the $100,000 I Had Before We Got Married?

I am a divorce lawyer with my office in Auburn Hills, Oakland County, Michigan, close to the Chrysler headquarters.  My office is easily accessible to Birmingham, Troy, Rochester, Clarkston, Holly, Oxford and Lake Orion.

Whenever one of my friends is facing difficult times in her or his marriage, I usually get a call. Unfortunately one of my friends (Bill) recently called me with a question about his premarital assets. The first question I asked him was whether he had a prenuptial agreement, unfortunately he did not.

Bill told me the following story. After college, he lived within his means for over ten years before meeting his wife. He enjoyed his life but worked hard and was careful with his money so he saved about $100,000 in a bank account before meeting his wife and getting married. After the marriage, in an attempt to do what he thought was the right thing at the time, he added his wife's name to the bank account. He deposited his income as well as some inheritance money into the account and they both spent money out of the account over the years during the marriage. There is now over $100,000 in the bank account. He recently discovered that his wife is considering filing for divorce against him.

The Issue

Bill's question to me was twofold (1) do I get to keep the $100,000 I had before the marriage and (2) do I get to keep the inheritance money I deposited into the account?

The Answer

If Bill had a prenuptial agreement protecting his premarital account, then the answer would be yes, you can keep the $100,000 as your separate asset and yes you can keep the inherited money as your sole and separate property. However, he did not, so the answer is more complicated.

Regarding the original $100,000 that he had in the account prior to the marriage, he has probably lost his ability to claim that it is his separate property. First, he put his wife's name on the account which shows an indication that he intended to treat that money as marital property. Second, he put money he earned during the marriage (marital funds) into the account and both parties spent money out of the account during the marriage. This means that he commingled the premarital money with the marital income and most likely the $100,000 has become marital property for him to equally divide with his wife.

Regarding the inheritance, he has probably lost the ability to claim that it is his separate property as well. Again he put it into the account with his wife's name on it and this showed an intention to treat the money as marital property. He also commingled it with the money that was in the account that contained the $100,000 that he had already commingled with marital funds. The upshot is that all of the money that he could have claimed should be returned to him without a set-off to his wife has probably lost its character as separate property and will be equally divided between them.

Summation

Almost everyone enters into marriage with the best of intentions, often however the marriage ends in divorce. If one party to the marriage has assets before the marriage, a prenuptial agreement is a necessity. The contract can be used to protect the separate property of each spouse. Further, part of our process at my office in preparing prenups for our clients is educating the client on how to maintain the separate nature of the property to avoid what happened to my friend Bill.

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Goulding Family Law & Mediation, PLC is committed to answering your questions about Divorce, Family Law, and Estate Planning law issues in Michigan.

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