Prenuptial Agreements and How they Are Enforced in Michigan

Thinking about creating a Prenuptial Agreement? You need to consider both the Appellate  Court position on these agreements and ways to address the potential of losing the enforceability of a prenuptial agreement. Here is a summary of the main legal points regarding prenuptial agreements, particularly in the context of Michigan law. This overview will help you understand the complexities and considerations involved in drafting and enforcing such agreements.

Michigan Courts and Prenuptial Agreements

• Contentious Relationship: Michigan courts have historically had a contentious relationship with prenuptial agreements. The 2017 decision in Allard v. Allard, 318 Mich App 583, 899 NW2d 420 (2017) (Allard III) has further complicated the enforceability of these agreements, leaving many to question their effectiveness in a divorce situation.
• Equitable Discretion: Regardless of the terms of a prenuptial agreement, Michigan courts retain equitable discretion in property division during divorce proceedings. This means that the courts can override the agreement if they find it inequitable.

Allard III Ruling

• Spousal Support and Attorney Fees: The Allard III decision emphasized that parties cannot use a prenuptial agreement to restrict the court’s discretion in awarding spousal support or attorney fees. The court’s authority to act in the interests of equity remains paramount.

Advising the Public on Court Authority

• It is crucial to remember that, despite the existence of a prenuptial agreement, the court has inherent authority to ensure an equitable distribution of property. This authority cannot be waived by the parties.

Criteria for Enforceability

• Fraud, Duress, and Misrepresentation: A prenuptial agreement may be set aside if it was obtained through fraud, duress, misrepresentation, or non-disclosure of material facts.
• Unconscionability: The agreement must not be unconscionable at the time it was executed. Courts will assess both procedural and substantive fairness.
• Changed Circumstances: If circumstances have changed significantly since the agreement was signed, making enforcement unfair or unreasonable, the agreement may be challenged.

Courts’ Role in Ensuring Equitable Outcomes

Invasion Statutes: Courts may use invasion statutes to adjust property distribution if the prenuptial agreement results in an inequitable outcome. This includes awarding separate property to a disadvantaged spouse under certain conditions.

Crafting Prenuptial Agreements to be Enforceable

Avoiding Inequitable Outcomes: It is essential to carefully draft prenuptial agreements to avoid potential inequitable outcomes. This involves considering future circumstances, including growth in investments such as 401k accounts, and ensuring the agreement is balanced and fair.

Here are a few examples of ways to create a more enforceable prenuptial agreement that avoids inequity:

• Life Insurance or Investments: You might need to keep a life insurance policy or other investments. These could be given to your spouse if a court later decides that your separate properties are unfair.
• Sunset Provisions: Consider including terms that support the less-advantaged spouse after a long marriage.
• Contingencies: Plan for situations like disability or unemployment that could make the agreement unfair over time.

Considering a Prenuptial Agreement? Call the Van Den Heuvel Law Office for experienced, confidential and tailored help with your prenuptial needs