Prenuptial Agreements in Michigan

Prenuptial agreements have started to shake their poor reputation in the last few decades. A recent poll showed that 44 percent of singles and 49 percent of divorced people think having a prenup is a good idea. No longer just a tool for the super wealthy, today both men and women of all income levels use prenuptial agreements to eliminate future financial uncertainty.

States have varying rules regarding prenuptial agreements. This article will explain Michigan's definition of a prenuptial agreement, what it may include, and what makes the agreement enforceable.

What Is a Prenuptial Agreement?

A prenuptial agreement, also termed an "antenuptial agreement" in Michigan, is a contract that lets prospective spouses agree how certain issues will be decided if and when they divorce, such as property division and alimony.

Who Should Get a Prenuptial Agreement?

Any couple that wants to predetermine how they will divide the marital estate if they divorce, should consider getting a prenup. You don't have to have a lot of money or assets for a prenuptial agreement to make sense; the contract can also determine how you divide your future assets.

The most common reasons people want a prenup are to protect separate property, to decide whether one spouse will pay the other alimony, and to determine how to divide marital assets. If a spouse has children from a previous relationship, a prenup can protect their inheritance.

Sometimes, couples agree that one spouse won't work and that the working spouse will pay alimony if they divorce. One or both spouses may have a business they don't want to be divided or sold if they divorce. Other couples want to avoid fighting over how to split assets in a divorce by agreeing on these issues before they get married, when they're still getting along well.

What Issues Can a Prenuptial Agreement Cover in Michigan?

In Michigan, a prenuptial agreement can cover anything not prohibited by law that doesn't encourage divorce.

Prenuptial agreements can cover any of the following:

• division of property, business interests, and financial accounts
• whether each spouse will keep their retirement accounts or whether they will divide each account
• each spouse's ability to manage the couple's assets during the marriage
• whether one spouse will pay the other alimony, as well as the amount and duration of payments
• how to divide life insurance proceeds
• support or inheritance of children from prior relationships
• what happens if one spouse dies during the marriage, and
• whether one or both spouses must make a will to carry out the terms of the agreement.

Can a Prenuptial Agreement Determine Child Custody and Child Support in Michigan?

A prenuptial agreement can never determine child support or child custody in Michigan. Since the court bases child support on children's needs and their parents' ability to pay, courts won't allow spouses to agree on a child support amount ahead of time. Also, judges determine child custody based on each child's best interests at the time that parents separate, never in advance. Parents can only agree on child custody and child support at the time they separate, subject to court approval.

How Can I Ensure My Prenuptial Agreement Is Enforceable in Michigan?

The Uniform Prenuptial Agreement Act is a set of rules many states, including Michigan, use to determine whether a prenuptial agreement is enforceable.

In Michigan, for a prenuptial agreement to be enforceable, it must be:

• fair, equitable, and reasonable under the circumstances
• entered into voluntarily, with full disclosure, and all rights and waiver of rights fully understood
• free from fraud, lack of consent, mental incapacity, or undue influence
• the facts and circumstances can't have changed so much since signing the agreement so that it would be unfair or unreasonable to enforce it, and
• both spouses must sign the agreement.

Also, a court is more likely to enforce a prenup if the spouses fully disclosed their financial circumstances to each other before signing. Each spouse should prepare a financial statement, with the help of an accountant if necessary, and attach the report to the agreement. It's also best that each spouse hires an independent attorney to review the document.

Courts will invalidate an agreement if one spouse commits fraud or deceit as part of the agreement. For example, if one spouse purposely hid assets from the other when the couple signed the contract, a court is likely to throw out the prenup. The spouse who wants to challenge the validity of the agreement has the burden of proving fraud or deceit.

A spouse may challenge a prenuptial agreement if the other spouse used threats to force the other to sign the document. A threat not to marry the other spouse isn't enough to invalidate the contract. A spouse must threaten physical or psychological harm for a judge to invalidate the agreement.

If one spouse isn't mentally capable of signing the prenup, a court may refuse to enforce it. For example, if someone was mentally deficient, was suffering from a mental illness, or was intoxicated while signing the agreement, that person would not have the mental capacity to agree, so the court won't enforce it.

Judges may throw out an agreement if the circumstances have changed such that it would be unfair to enforce it. The fact that the agreement gives one spouse much more of the marital estate isn't enough to make it unenforceable. If, for example, one spouse became disabled during the marriage and can no longer work, the court may require the other spouse to pay alimony, even if the prenup excludes it. Generally, it must be that type of an extreme circumstance for a judge to find an agreement unenforceable due to unfairness.

If a marriage has been annulled or voided, courts will only enforce a prenuptial agreement if it's necessary to avoid injustice.

If you decide to amend or change the prenup after the marriage, both spouses must sign a written amendment to make any changes enforceable.

If you have additional questions about Michigan prenup, contact a local family law attorney for advice.