Prenuptial Agreements – A “Must Have” for protecting accumulated assets

For persons who have significant accumulated assets or debts, a prenuptial agreement often ensures a marriage begins on a stable foundation.   Additionally, a prenuptial may also lead to long-term balance when adequate thought and planning are done by the attorney communicating and working together with the prenuptial client.  Often, people are concerned that a prenuptial will cause their soon-to-be spouse to believe they are not confident that their marriage will last.  Contrary to this belief, prenups can often strengthen the commitment by encouraging parties to enter the marriage based on love and respect, rather than for purposes of gaining wealth, inheritance, or relief from debt. The Prenuptial Agreement can build trust and reassurance in each party that they are committed to the desire to be in a marital union with their betrothed without ulterior motives.

Sometimes people resist entering a Prenuptial Agreement because they are concerned that their marital circumstances will change and quickly cause some of the Prenuptial terms to become obsolete or outdated.  Enforceable amendments can be made to the Prenuptial Agreement so long as there is some consideration (both parties giving something to the other) contained in the Amendment.  Additionally, attorneys often use what is referred to as a “Sunset Provision” in the initial Prenuptial Agreement.  For example, a Prenuptial might state once children are born any Prenuptial provisions barring spousal support or sharing retirement are terminated.  Many other sunset provisions can be incorporated into a Prenuptial depending on the circumstances and wealth of the parties (e.g. a home or a vacation home becomes a joint asset if the marriage lasts more than 15 years or a sum certain (e.g. $500,000) of separate monies becomes jointly owned after 20 years of marriage).

Michigan Courts generally find that Prenuptial Agreements are enforceable; however, in 2017 the Michigan Court of Appeals ruled in the case of Allard vs. Allard, 318 Mich App 583 (217) that Michigan Courts always have the right to determine whether or not a prenuptial agreement goes too far in creating an inequitable post-divorce situation.  A Michigan Court may choose to disregard a Prenuptial Agreement where a party and/or the parties’ children will not be adequately supported if the prenuptial is enforced as written. Courts will generally enforce Prenuptials that: (1) do not create an Equitable post-divorce situation where the party or the parties’ children will face serious financial hardships, (2) have provided a  Full Disclosure of all Assets and Debts; and (3) both parties shall have the right, or at least be given the opportunity, to have Independent Legal Advice.

Kline Legal Group attorneys have a wealth of experience drafting Prenuptial Agreements.  We are committed to having important conversations with our clients asking the right questions so clients can make informed decisions regarding the type and scope of a prenuptial agreement that best meets their needs and wishes.