Do I Need a Prenuptial Agreement?
As you enter into the period before a wedding, you may wonder at some point “Do I need a prenuptial agreement?” There are many reasons you may want to consider a prenuptial agreement, and many scenarios where they may be appropriate and even necessary.
Let’s start with what a prenuptial agreement is: A legal contract between two people. It is conditioned on the marriage, and the purpose is to spell out, ahead of any conflict, each parties rights and obligations in the event of a Divorce. In Michigan, generally a prenuptial agreement will be upheld, according to MCL 557.28, which provides that “[a] contract relating to property made between persons in contemplation of marriage shall remain in full force after marriage takes place.”
However, there are requirements to a valid prenuptial agreement, and without these elements, they may not be upheld by a Court in the event of a Divorce- which defeats the purpose of the agreement! Careful and thoughtful drafting is a must.
To be upheld, the agreement must be in writing, it must be executed prior to the marriage- postnuptial agreements are not the same and have very different requirements to be upheld. The other requirements are spelled out in the case of Rinvelt v Rinvelt, 190 Mich App 372, 475 NW2d 478 (1991).
- Was the agreement obtained through fraud, duress, mistake, or misrepresentation or nondisclosure of material fact?
- Was the agreement unconscionable when executed?
- Have the facts and circumstances changed since the agreement was executed to make its enforcement unfair and unreasonable?
There are other important factors to consider when making a valid prenuptial agreement. It is highly recommended to have an attorney who regularly drafts and negotiates these contracts to ensure the highest likelihood of enforcement by a Court.
So, that brings us back to the initial question- do you need a prenuptial agreement? It is always a good idea to go into a situation such as marriage with eyes wide open, discussing your expectations and desires from the relationship. As marriages happen later in life, and as blended families are the norm, it is wise to protect yourself. Another thing a prenuptial agreement can do is protect children from a prior marriage- it is quite easy to “accidentally” disinherit your children from a previous relationship- an example being, you have your spouse on joint accounts and beneficiary of your retirement assets and/or life insurance, and you pass. Now your spouse is in control of all of your assets, to the exclusion of your children. If something happens to them, it could pass to their heirs, instead of your children. However, in a prenuptial agreement (or through thoughtful estate planning!) you can avoid that scenario. If you enter into a marriage with significant assets, it may bring peace of mind to know that they are protected in the even of a future divorce.