An prenuptial agreement is an excellent tool to use when preparing for a marriage. This page gives an overview of what it is and how an prenuptial agreement can help you. Contact one of our attorneys for an even more in-depth discussion.
A prenuptial agreement is also commonly known as a antenuptial agreement. A prenuptial agreement is a contractual agreement between the parties about to be married; setting out the division of assets, spousal support, as well as other financial aspects of the parties in the event the marriage is dissolved.
This is in contrast to a postnuptial agreement which is made between parties who are already married, as to how to resolve the financial assets and issues relating to the dissolving of the marriage. A prenuptial agreement can allow the parties to prepare for and address the financial impact of a divorce through proper planning and agreement in advance, thereby sparing the parties many of the problems relating to litigation.
This is an important decision that needs to be carefully considered and depends on the specific needs and relationship between the future spouses. A prenuptial agreement must be carefully drafted to address the parties needs and concerns, and you should see a competent lawyer if you are in need of a prenuptial agreement.
To assist you in deciding whether a prenuptial agreement is best for you, we have summarized the basics as to what it is, why you may wish to have one, and when a prenuptial agreement is valid and enforceable.
Why Should I get a Prenuptial Agreement?
There are a variety of reasons for a party to get a prenuptial agreement. Getting a prenuptial agreement does not mean the parties do not love each other or expect the marriage to end; it is merely a consideration of this possibility and is proper planning to address it. This can minimize the harm and negative results of the dissolution of a marriage. Parties are often hesitant to bring up the subject of a prenuptial agreement with a future spouse. However, if you feel you are in need of a prenuptial agreement you should not be afraid to do so. Prenuptial agreements can be an invaluable tool in the event of a divorce and they are commonly enforced by the courts.
It is worth noting that this importance often makes the agreement a highly contested part of a divorce case. The effect of the agreement can be dispositive to the outcome and, as such, it must be carefully drafted by an attorney to ensure it can be enforced.
There are a wide range of reasons a party might wish to enter into a prenuptial agreement including:
- assets that the parties have accumulated prior to the marriage that they wish to keep as separate property, along with any appreciation in value of this property, in the event the marriage dissolves;
- to address the disposition of any future inheritance;
- to lessen the costs of future litigation in the event of divorce;
- to lessen the severity and emotional toll of any divorce dispute;
- the existence of a business or investment a party wishes to keep as separate property;
- a prior negative experience in a marriage where a party feels like the property division was inequitable and unfair;
- avoiding disputes regarding the value of property;
- prior children that a party wishes to insure are provided for and receive their accumulation of wealth;
- a party that wishes to bar any spousal support, otherwise known as alimony payments, to the other spouse;
- to address future uncertainties, risk, and expected income increases; or
- where the parties have a significant difference in incomes and assets.
An agreement can account for a length of the marriage, increasing the money to be paid by a spouse proportionately. Also an agreement can be drafted to dissolve after a length of time.
The Enforceability of a Prenuptial Agreement
As previously stated a prenuptial agreement is a contract entered into by the parties to be married for the purpose of varying and relinquishing marital rights, such as spousal support and property division. See MCL 557.28; 700.2205.
An agreement can be enforceable in the event of both divorce or the death of a party. In the event that there is a valid and enforceable prenuptial agreement, the court will not apply the general rules of property division in dividing the marital assets. Instead the court will rely on the agreement. However, a prenuptial agreement cannot affect child support obligations or child custody arrangements. These issues must be decided by the court and any provision addressing these issues is unenforceable.
In interpreting the agreement, and addressing an agreement, the general principles that apply to all contracts will be used. To a large extent a prenuptial agreement will be treated just like any other contract agreement. Generally, a properly constructed prenuptial agreement between the parties is enforceable.
MCL 557.28 states that “[a] contract relating to property made between persons in contemplation of marriage shall remain in full force after marriage takes place”. In order to have an enforceable agreement the agreement must be in writing; it must be entered into voluntarily after full disclosure, and must be fair when executed. Rinvelt v Rinvelt, 190 Mich App 372; 475 NW2d 478 (1991).
Full disclosure means that the parties must be fully aware of the assets of the other party. Having a lawyer represent each of the parties can help insure that the agreement was entered into after full disclosure and lead to an increased likelihood the agreement will be enforced if challenged in the event of a divorce. While in many aspects a prenuptial agreement is similar to any other contract, this duty to disclose financial assets is significantly higher in regards to a prenuptial agreement due to policy reasons. The parties must take steps to fully disclose all assets and their value, all debts, income and source of income, education, employment, and age and health status.
Notwithstanding the discussion below about exceptions to enforcement, an agreement must be fair at the time of the agreement not the time of the divorce. A normally enforceable agreement may be voided under the presence of certain circumstances. “A prenuptial agreement may be voided:
(1) when obtained through fraud, duress, mistake, or misrepresentation or nondisclosure of material fact,
(2) if it was unconscionable when executed, or
(3) when the facts and circumstances are so changed since the agreement was executed that its enforcement would be unfair and unreasonable.”
Reed v Reed, 265 Mich App 131, 142-143; 693 NW2d 825 (2005).
A change of circumstance must be something that was unforeseeable at the time of the agreement. As to the facts and circumstances changing, a marriage that lasted a considerable length of time in and of itself is not justification to void the agreement. Did the assets and earnings of one spouse increase significantly more than the other spouse? If it was contemplated in the prenuptial agreement that the parties would have separate assets, than this is foreseeable and will not suffice as a change of circumstances to justify voiding an agreement.
In the event you are already married and failed to get a prenuptial agreement but now feel like you need one, you still can reach an agreement with your spouse to address the possible dissolution of the marriage. This can be done not through a prenuptial agreement, but with a postnuptial agreement that is similar in effect to a prenuptial agreement. A postnuptial agreement has additional requirements.
Expert Antenuptial Agreement Lawyers
Great care needs to be taken to insure that a prenuptial agreement is both enforceable and addresses all the needs of the parties. As such it is highly recommended that you have the assistance of a qualified attorney to help you. If you are concerned and need a prenuptial agreement please call our office to arrange a consultation.