You meet someone. You fell in love. You signed a prenup. You exchange vows. After that, you get divorced. You ask yourself: How will a signed prenup affect my Michigan divorce? What part does the prenuptial agreement have in the current divorce process? What background would the information in the prenuptial agreement give your divorce? There are no absolutes when it comes to the enforcement of prenuptial agreements in Michigan. Contrary to what you might see in movies or on television, prenups are not ironclad.
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A prenuptial agreement is a contract between the parties. The Michigan courts have the option to enforce all the contract’s terms or just a portion of them. The court will make an effort to abide by the prenuptial agreement, but it won’t stop the court from conducting its own inquiry. The letter of the prenup will be evaluated by the court based on the current situation. During the divorce talks, you should discuss these conditions with your attorney.
These agreements are fairly common if one or both of the parties have large assets. It is if you have children from a previous marriage or with potential inheritances. It is also common for couples with high incomes. A must for a family business to protect or a desire to forego the high cost of further litigation. It can be good for those having a previous marriage that was thought to have ended unfairly.
Property is usually the most crucial thing to protect in a prenup.
What is a prenup?
People are aware of prenuptial agreements. The expression is widely used to describe a written contract by two people about to get married. According to theory, this arrangement protects a person’s assets in the event of a divorce. In the State of Michigan, this instrument is officially known as the antenuptial agreement.
We will be using prenup, prenuptial agreement, and antenuptial agreement interchangeably in this article.
Antenuptial agreements are written contracts between engaged couples. The document outlines how future earnings will be handled. It describes who will manage each other’s assets, and how assets may be distributed in the event of a divorce. Even if the marriage does not last, the agreement provides some level of certainty to each party.
According to the State of Michigan, antenuptial agreements are legal. It is legal as long as they are in writing and signed by the person who will be held accountable for them. This basically indicates that a court will not accept an oral agreement.
Use an antenuptial agreement if you have more assets than your intended spouse. Assets can be property or many investment accounts. A prenuptial agreement takes effect once a marriage happens.
The state code of Michigan does not specify what can and cannot be a part of a prenuptial agreement. Instead, it is founded on case law. Case laws are decisions made by higher courts. Here is an illustration of what might be in a prenuptial agreement:
[ a ] How debts incurred before marriage will be paid;
[ b ] How to classify gifts and/or inheritances acquired throughout the marriage;
[ c ] How the earnings of each spouse will be categorized; and/or
[ d ] The capacity and duty of each spouse to manage assets and property.
Any subject that is not against the law or that promotes divorce may be covered in a prenuptial agreement. Antenuptial agreements can cover any of the following:
[ a ] Assets, business ventures, and financial accounts to be divided.
[b] If both spouses will evenly split the couple’s retirement accounts
[ c ] The spouse’s capacity to control the resources of the home in marriage.
[ d ] The length and sum of any alimony payments, as well as whether one spouse will be responsible for paying the other.
[ e ] How to distribute life insurance payouts
[ f ] Child support or inheritance of children from prior relationships.
[ g ] What happens if a spouse dies during a marriage?
[ h ] Whether the provisions of the agreement calls for the execution of a will by one or both spouses.
You can think about utilizing a premarital agreement to divide liability for the debt. It can be important if you or your future spouse have a sizable amount. You can consider using a prenuptial agreement to limit the amount of spousal support. You might be obliged to pay a lot more in alimony in case of a divorce if you earn a lot more money than your future spouse.
What are the advantages and disadvantages of a prenup?
A prenuptial agreement aims to aid potential couples in making detailed financial plans. It aids in preserving their assets, and planning for the future before they get married. Both parties must have their own attorney. It is important while negotiating the prenuptial agreement. Parties must work with their respective attorneys to ensure it is mutually beneficial. The agreement must not disproportionately benefit one spouse over the other.
Here are the significant advantages and disadvantages of antenuptial agreements.
Advantages of your signed prenuptial agreement
Providing mechanisms for wealth protection and facilitating future compliance to laws are significant advantages of an antenuptial agreement.
A mechanism for protecting wealth.
The main benefit of a prenup may be the ability to protect your wealth with your future spouse. Protection does not mean defending your current possessions from one another. You can work together to safeguard the wealth you bring into the marriage as individuals. More importantly, it protects the wealth you will assemble together.
Prenuptial agreements are capable of achieving this dual wealth protection. The process calls for full and honest information from both parties. It requires full disclosure of the assets and debts they would be bringing to the marriage. In drafting a prenuptial agreement, the couple must also discuss their financial goals. They must talk about what they want to gain from these assets as well as any future assets they could get.
Anticipate future compliance with legal processes.
Prenuptial agreements are utilized in circumstances outside separation and divorce. Prenuptial contracts can make divorce less stressful and easier. They can also make estate planning and end-of-life planning less complicated. A prenuptial agreement gives you more freedom. More freedom in deciding how much money to leave your children as a legacy than a regular will.
Many states, including Colorado, have very rigid inheritance rules. So people don’t always have the flexibility they’d like. Especially in determining whom they want to leave their property to when they make a will. A prenuptial agreement allows couples to make decisions collectively. In some cases, alleviate the state’s inheritance restrictions. This is how a prenup may make upcoming legal difficulties easier to comprehend and handle.
Disadvantages of your signed prenuptial agreement
Not everything is covered by a prenuptial agreement. You can’t manage every aspect of marriage with this kind of arrangement. These restrictions should be understood before drafting the prenuptial agreement.
Here are some drawbacks of prenuptial agreements:
Terms and conditions in prenups are not ironclad.
Prenuptial agreements aren’t really ironclad in Michigan. Courts always attempt to render decisions that are in line with the wishes of the parties.
Situations can change to the extent that enforcement of the prenup would be unfair. The court might decide to reject the agreement. The agreement might give one spouse a larger share of the marital estate. It cannot be rendered unenforceable just for this reason.
The ability of the courts to pierce prenuptial agreements has always existed. It always has to avoid unfair consequences. How can we forecast what will be deemed unfair by a judge whom we cannot choose? How can we anticipate the few years and asset changes down the road? How can you even guess all that when you are creating a prenuptial agreement?
There are no definitive answers to these questions. Cautious attorneys and parties will take steps to appear more equitable in prenuptial agreements.
The existence of prenups suggests distrust.
This is more of a misconception because prenuptial agreements are not inherently bad. Sadly, prenuptial agreements have a bad reputation. Many people believe they essentially lack faith in the relationship and lack romance. Signing a legal document may not be the most romantic move. It does not imply mistrust or a lack of faith in the future of the partnership.
Mentioning the creation of a last will and testament is often interpreted as portending death. Prenups are sometimes viewed as a divorce omen. Fairytale proposals and endings often evoke images of candlelit dinners, cuddling, and moonlit strolls. The fastest way to kill that vibe is to bring up the prospect of a future divorce. Marriage is a union that goes beyond romance and involves significant issues like property and finances, yet for some couples, discussing these subjects might overshadow this enjoyable moment.
Instead of waiting until the wedding invitations are sent out to bring up a prenup, carefully consider the ideal time and place to do so. In many states, if you force your fiancé to sign a prenuptial agreement right before the wedding, a court may declare the contract invalid because your fiancé didn’t have enough time to carefully review its contents. Not only is this unfair to your future spouse, but it also violates the presumption of informed consent.
How will our signed prenup affect my divorce?
Prenuptial agreements were the domain of affluent families. It was meant to deter gold diggers from trying to muscle in on the family riches. Prenups have evolved into a means for pragmatic couples. Couples who are looking to protect their interests in the event of a divorce.
The issue is that prenuptial agreements are difficult to draft. It must adhere to strict requirements to be upheld. You could lose out on whatever benefits you were banking on. Especially, if a judge reviewing the legitimacy of a prenup finds it does not meet requirements.
If the antenuptial agreement was well-crafted and prepared in compliance with legal standards, it should not get in the way of your divorce. The courts in Michigan will comply with the letter and intentions of the antenuptial agreement. You will know that because of the following reasons:
There is no fraud during the process of drafting the document.
A prenuptial agreement that was obtained illegally would never hold up in court. Why does this matter? Fraud can occur during the drafting of a prenup document. Fraudulent situations include coercion, error, deception, or failure to disclose crucial information.
The court won’t be sympathetic if you coerced or threatened your spouse into signing a prenuptial agreement. You’re out of luck if you misrepresented the agreement’s terms. Even worse if you omitted to mention elements that would have discouraged your spouse from signing. You know what’s going to happen if you misled your spouse into signing the contract by mistake.
The letter and intention of the parties in the prenup are fair.
Fairness is important when considering prenuptial agreements. A spouse is already legally entitled to half of the marital estate. The spouse gets half without a prenup under the marriage contract. You cannot touch that half even if the other party agreed to it and signed it. A prenup with clauses deemed extremely unjust or unconscionable may not be upheld in court.
What actions are deemed unconscionable? Something that is so unfair that it would shock the conscience of any reasonable person. Let’s just say that it’s probably best to avoid a huge disparity that favors one party. The terms will be deemed unconscionable if, for example, benefits are not proportionate. It could mean limitations are placed on the establishment of community property. Or restrictions are placed on the division of property following a divorce or separation.
The current circumstances of your marriage and the parties have not changed dramatically.
It’s possible a prenuptial agreement won’t be upheld as legitimate, reasonable, and enforceable. It can happen if your circumstances drastically change. And these changes happen during the course of your marriage. The intent of the prenup can be subject to interpretation and judicial discretion. The legal context may be challenging to understand. It’s possible that these drastic changes will prevent your prenup from being enforced. We’re talking about a change in circumstances that wasn’t fairly anticipated. Extreme changes such as in a “rags-to-riches” kind of thing. Circumstances of a spouse having a debilitating disease like cancer. Such extreme situations lead to very costly medical and palliative care.
You don’t want your prenuptial or antenuptial agreement to be a comical script during a divorce trial. If you are still in the process of anticipating an engagement, talk to your attorney now about your antenuptial agreement. If you are anticipating a divorce, get your attorney to have a look at your prenup before you face the opposing party.
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