Prenuptial and Postnuptial agreements are valid in Michigan, as long as they meet specific criteria.
Knowing the criteria can help you establish a valid agreement and help protect your finances and assets in the event of a divorce in Michigan. We’ll explore both prenuptial and postnuptial agreements in this article, as well as help you determine if you need one and explain some common situations in which they can be helpful.
What is a prenuptial agreement?
A prenuptial agreement, or “prenup,” is a legal contract entered into by a couple before they get married. This agreement outlines the division of assets and financial responsibilities in the event of divorce or death. It is a common misunderstanding that only high net worth couples need to consider prenuptial agreements, and it could be argued that they are even more important for middle class couples.
What is the purpose of a prenuptial agreement?
Prenups help with many facets of a couple’s life. When structured properly, a prenuptial agreement can help with:
- Asset protection: As you most likely have some assets you will be bringing into your marriage, a prenup can help outline how those assets are handled in the event of a divorce.
- Debt management: While extremely common but not often discussed, you and your soon-to-be spouse have debts you will be bringing into the marriage as well. If one spouse has student loans, for example, a prenuptial agreement can help protect the other spouse from being responsible for these and other debts.
- Inheritance: If you or your spouse have children from a previous relationship, a prenup can assist in establishing rights of inheritance for your future children as well as children you have prior to your marriage. For example, if you have a child and you want them to inherit your grandfather’s watch, this can be put into a prenuptial agreement.
- Business interests: If you or your spouse-to-be own a business, it can help to outline any desired outcomes for this in your prenup. A recent case in Michigan highlights the importance of this.
How can you make sure your prenuptial agreement is valid in Michigan?
Michigan has specific criterial for prenuptial agreements. Your local divorce attorney can explain these in detail and also help you craft a valid prenup before you are wed. The basic criteria for a valid prenuptial agreement in Michigan include:
- Your prenuptial agreement must be written: Let’s say you have a cat, and the cat has a preference for either you or your significant other, you may verbally agree that the preferred pet parent will take the cat in the event of a divorce. This isn’t enforceable. You need to have this outlined in writing in your prenup. And yes, pets can be handled in a prenuptial agreement.
- Your prenuptial agreement needs to be voluntary: Both parties need to enter into the prenuptial agreement voluntarily, without any type or coercion or duress. This is why a divorce attorney should help you with your prenup.
- Your prenup needs to have full disclosure: Honesty is the best policy, and in a Michigan prenup, it is a requirement. All assets, debts and income must be disclosed by both parties. If it comes to light that one or both have hidden a debt from the other, it can invalidate the agreement.
- Your prenuptial agreement must be fair and reasonable: The terms must be fair and reasonable at the time of execution and not unconscionable at the time of enforcement. This is a bit subjective and will be handled by the court.
How is a prenuptial agreement enforced in Michigan?
Courts will enforce prenuptial agreements unless they are found to be unfair, were signed under duress, or if there was a failure to disclose assets fully. Changes in circumstances can also affect the enforceability of a prenup. This last point has given a rise in popularity of postnuptial agreements.
What is a postnuptial agreement?
A postnuptial agreement, or “postnup,” is a contract executed after a couple gets married. Like a prenup, it details the division of assets and responsibilities if the marriage ends in divorce or death. Most couples that sign a postnuptial agreement do so in light of changed circumstances such as an unexpected windfall or inheritance.
What is the purpose of a postnuptial agreement in Michigan?
Postnups have the same purpose as a prenup, but are executed after the marriage has been entered into. Postnups typically cover some different matters than prenups, including:
- Changed or changing circumstances: Throughout the course of a marriage, life happens. This means that things change, and a couple may see the need to enter into an agreement that reflects these changes. A big promotion, or the discovery of an unknown child can change how a couple views assets.
- Debt management: As you are married, you will most likely incur new debts. Outlining who is responsible for them in a postnuptial agreement can help.
- Clarification of inheritance: If you have a blended family, a postnup can provide clarification of asset distribution in the event of divorce or death.
- Marriage reconciliation: If you and your spouse experience marital problems, a postnuptial agreement can be used as a way to outline terms of reconciliation.
How can you make sure your postnuptial agreement is valid in Michigan?
Much like a prenuptial agreement, a postnuptial agreement must also meet certain criteria. It is important to note that a postnuptial agreement is subject to higher judicial scrutiny because it is entered into after the marriage is established. But for a postnup to be valid, it must:
- Be written: Much like a prenup, a verbal agreement will not be recognized by the court.
- Be voluntary: Both spouses must enter into the postnuptial agreement voluntarily, without coercion or duress.
- Be transparent: Full disclosure of assets, debts and income are also required. So if one spouse took out a loan the other is unaware of, this needs to come to light in a postnup.
- Be fair an equitable: Because it is entered into after the marriage is legal, the standard changes to “fair and equitable” to match property distribution rules in Michigan divorces.
Both prenuptial and postnuptial agreements are valuable tools for financial planning and protection within a marriage. In Michigan, these agreements must meet specific legal standards to be enforceable, ensuring fairness and transparency. Couples considering either agreement should consult with a knowledgeable family law or divorce attorney to navigate the complexities and tailor the agreement to their unique circumstances.