Michigan Prenuptial Agreement Statute

We are told that if a married couple enters into a post-marriage contract while living together and divorce is not imminent, their agreement violates Michigan public order and is therefore unenforceable because such an agreement could promote the couple`s future divorce. Similarly, the Michigan Court of Appeals issued the recent Allard decision [Michigan Court of Appeals, No. 308194 January 31, 2017] tells us that the parties cannot enter into an enforceable marriage contract in which they waive their right to spousal support in the event of a future divorce because the Michigan Legislature has given divorce courts the discretion to provide spousal assistance. and therefore, it would be contrary to Michigan public policy to allow parties to a prenuptial contract to remove that discretion from a divorce judge. According to the Allard decision, it is in the Allard decision that public policy, allegedly reflected in Michigan`s divorce laws, nevertheless transfers to a divorce judge the discretion to grant the other spouse the discretion to grant the other spouse separate property that the spouses have retained at some point in their prenuptial agreement in future divorce proceedings. The Allard Court`s emphasis on existing laws to conclude that there is an alleged public order to invalidate agreements between spouses is, at best, the product of a selective analysis of only a few laws to achieve the desired result, while other state laws that clearly take into account and respect the contractual freedom of the spouses are conveniently ignored. Consider MCL 557.28, which juiciously states: “A property contract between persons contemplating marriage will remain in full force and effect after the marriage.” Or what about MCL 700.2205, which provides that spouses may waive statutory inheritance tax, choices against the estate of a deceased spouse, rights to a property allowance and an exempt allowance of the assets of the estate of a deceased spouse, or their right to apply to an estate judge for a discretionary family allowance on the estate of the deceased spouse “before or after the marriage by through a written contract”? Everything that can be derived from these laws has been blissfully ignored in Allard. Essentially, some rights of spouses can be set aside while others cannot, it all depends on the public policy that the Court assigns to the legislature when enacting a law. Public order can probably be derived from any law promulgated by the legislator.

The challenge, therefore, is to recognize which law carries more weight for public order than other laws. All parties to the prenups and their lawyers should be concerned about the implications of the Allard decision. In particular, the court concluded that prenuptial agreements are enforceable as long as they do not limit the power of the trial court to exercise equity. Allard stated that prenuptial arrangements are useful for the court to identify the distinct property of each party before the marriage under consideration occurs. Again, it must be borne in mind that property identified as separate property of a party entering into the marriage will not be violated unless required by justice and the good conscience of the trial judge. A good thought process here is that when entering into a prenuptial agreement, it is important to be fair in doing so and consider transferring benefits to a party that might arise after a long marriage, and also to consider that the birth of children occurs as a result of that marriage. In 2016, the Michigan Supreme Court added a new basic block to the state`s legal structure for the preparation and execution of marriage contracts. The Tribunal`s order of 25. May 2016 (Allard v. Allard, 499 Mich 932 (2016)) created a new standard and direction for the Court of Appeal on pre-trial detention to end nearly four years of contentious litigation following the judgment on the interpretation and applicability of an attenuating contract signed by the parties on September 9, 1993, two days before their wedding on September 11. 1993. The Court of Appeal issued its opinion on 31 January 2017 following the Pre-Trial Detention of the Supreme Court.

(Allard v. Allard, 318 Mich 583 (2017)). So what happened? The Allard Court agreed that the parties have the right to dismiss their property rights, but two Michigan regulations grant rights only to the courts, not to the parties themselves. In other words, the Court held that the parties cannot waive their rights under these two laws, but that they cannot either file applications for enforcement of the rights deriving from that law in divorce proceedings. Simply put, these laws can only be used by a court. The court also mentioned the well-known law that the parties cannot enter into a marriage contract that attempts to force a court to make a property settlement that is unfair. Allard has not changed any of the legal principles set out in the Rinvelt-Reed line. It was based on a narrow but fundamental rule: the parties cannot, even through a consensual and properly worded marriage contract, deprive a Michigan court of its power – and duty – under the applicable regulations to provide for a fair distribution of property in a divorce action. Prior to Allard, the parties to prenuptial agreements relied on Staple v. Staple, a Michigan Court of Appeals case that found that parties could knowingly and voluntarily waive their own legal rights contractually. The Court ruled that a contract between the parties contemplating marriage remains in full force with respect to their property rights, even after the marriage. Some lawyers have also feared widespread and large-scale attacks by Allard on prenups.

Allard eventually upheld the court`s jurisdiction to invade a party`s separate estate in order to create a fair property settlement, regardless of a properly designed and executed prenup. And what may seem “right” to a judge could be offensive to one of his fellow bankers. So far, our courts of appeal have not communicated such results. In fact, an ACO committee carefully rebuked that Allard “did not believe that a court, under the guise of fairness, could redefine the terms of a prenuptial agreement to make the agreement fairer.” Silverman v Silverman, 2018 WL 3788265 (COA case No. 336905 unpublished decision of 9 August 2018). For a marriage contract to be valid, it must be in writing and signed by each party. Result? Prenuptial arrangements are useful in court. However, according to Allard, these prenuptial arrangements cannot prevent trespassing on separate property or granting spousal support from being violated if the court considers it necessary to be just and equitable, given the duration of the marriage and what the other party receives upon dissolution of the marriage. Be sure to always consult an experienced family law lawyer, well in advance of the planned marriage, if there is a desire to protect your property from divorce. How much spousal support would be fair? Try to be both reasonable and generous when discussing this central part of all prenuptial agreements. It will also help prevent a future court from revoking your prenuptial agreement due to perceived fraud or coercion. Some lawyers argue that the Allard decision was motivated by the court`s pursuit of a particular outcome and not by the application of a legal principle that it had not previously identified.

These beliefs arose because the facts in the Allard case were harsh. The application of the prenup would have left the ex-wife about 10% and the ex-husband about 90% of the property that the parties owned and accumulated during a 16-year marriage. However, the Court did pre-empt these subjective views by basing its decision on an informed legal analysis of the applicable laws. The Allard Court based this conclusion on two statutes. The first law allows a court to grant separate property to the other party if the matrimonial property and/or property of the other party is insufficient to support the poorest spouse and/or children. The second act allows a court to grant separate ownership to the other party if that party contributed to the acquisition, improvement or accumulation of the separate property. We have long thought that we had a good grasp of Michigan`s public order with respect to marriage contracts when the Court of Appeals issued its decision in Rinvelt v Rinvelt, 190 Mich App 372, 483; 475 NW 2d 478 (1991) and actually changed the michigan public order course at the time: The Michigan Court of Appeals recently ruled in allard v. Allard that a court retains the power to allocate separate property from one party to the other party in divorce proceedings, even if the parties have entered into a valid marriage contract to protect that property […].