PRENUPTIAL AGREEMENTS
by Raymond Pater

A prenuptial agreement is a contract between two persons contemplating marriage that sets forth their property rights in the event of death or divorce. Typically these agreements focus on property owned by the wealthier of the two spouses. Antenuptial or post-nuptial agreements are similar but are made after the parties marry. A statute provides that the agreement must be in writing. MCL 566.132(c); MSA 26.922(c).

A 1982 statute provided: "[a] contract relating to property may between persons in contemplation of marriage shall remain in full force after marriage takes place." MCL 557.28, MSA 26.165 (8). That statute was not interpreted to support the enforceability of a prenuptial agreement in Michigan in a divorce until the case of Rinvelt vs. Rinvelt, (1991). Previously another statute specifically allowed such agreements in Probate. The statute provided that an agreement relating to a waiver of "all rights" means just that and "is a competent waiver enforceable in probate." MCL 700.291, MSA 27.5291.

The case of Kennett vs. Mc Kay, 336 Mich. 28 (1953) held that unless an agreement is ambiguous, it controls in the absence of fraud, lack of knowledge or consent, mental incapacity, or undue influence. A claim of lack of consideration or that the agreement is contrary to public policy fails because in addition to the actual benefits that a party derives from such an agreement, marriage alone is a sufficient consideration for an antenuptial agreement. Hockenberry v. Donovan; Richard v. Detroit TrustCo.

Three questions are initially raised as to a prenuptial agreement’s enforceability:

1. Was the agreement obtained through fraud, duress or mistake, or misrepresentation or nondisclosure of material fact?
2. Was the agreement unconscionable when executed?
3. Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?

The party challenging a prenuptial agreement has the burden of persuading the trial court that the antenuptial agreement is not enforceable. In re Benker Estate, (1982); Rinvelt vs. Rinvelt (1991). But, there are some circumstances that give rise to a rebuttable presumption of non disclosure. Failure to adequately provide for a spouse, secrecy, failure to fully disclose assets, and failure to have each party represented by independent counsel, are all factors that may give rise to a rebuttable presumption of non disclosure. In re Benker Estate, (1982); Rinvelt vs. Rinvelt (1991). Full disclosure of assets is essential. When a prenuptial agreement is made in secrecy and fails to provide for a spouse, it will be set aside. The agreement must be free of duress. Therefore, it is good practice to allow the other party to consult with his/her independent attorney and extend adequate time for complete review. An agreement pulled out of one's pocket under trying conditions such as on the morning of the planned wedding or on the steps of the church or courthouse will likely be held unenforceable.

The agreement must be fair. Giving one spouse all of his/her property and one-half of the other's property will not be considered fair. If the agreement clearly spells out what property each has and allows each party to retain that property and then makes a fair division of assets and property that are accumulated during the marriage, the agreements will likely be upheld.

The agreement should be either drafted so that it takes into account the length of marriage or the agreement is periodically revised. This is intended to cover the third factor listed in Brooks v Brooks: "Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?" Agreement that might be fair after a two-year marriage may no longer be fair after a twenty-year marriage, particularly when one spouse limits employment opportunities in order to benefit the other spouse. This would take place if one spouse remained at home and hosted frequent business parties while the other spouse developed business opportunities. The stay-at-home spouse would then have a good claim for alimony or spousal support, unless the prenuptial agreement treated him/her fairly.

The agreement must be made after full disclosure. When a party fails to disclose the full extent of his/her premarital assets, the other spouse may later successfully challenge the prenuptial agreement. Estate of Halmaghi (1990). The disclosure should not only be of the assets and liabilities that each of the parties have before the marriage, but should also disclose the rights that each party is giving up in entering into the agreement.
There are certain things that a prenuptial agreement will not and cannot change such as the legal obligation to pay child support for a child is born of the relationship.

There are normally several topics covered in the typical prenuptial agreement:

a)  Name and address of each party
b)  Description and value of real and personal property owned by each party
c)  Definition of ownership of after-acquired property
d)  Property to be held separately, jointly, or in common.
e)  The effect of death of a spouse on the terms of the agreement.
f)   That each party has had an opportunity to consult their own attorney.
g)  Effect of the agreement upon divorce or separation.
h)  Provisions relating to life insurance and pension benefits
i)   Provisions for making of a will.
j)  Who will be responsible for what debts.
k)  Severability clause.
l)   Revocation, termination, or modification provisions.
m)  A listing of rights that each spouse is waiving.
n)  Other general provisions, including the right to seek an independent appraisal of the
     value of property before signing the agreement.

Preparing a prenuptial agreement is different than preparing a standard contract. Because of the special requirements outlined in the case law, it is recommended that you seek an attorney who has expertise in family law and prenuptial agreements. Saving $200.00 in the preparation of a prenuptial agreement may be the most expensive "saving" you ever had.