Fairness between Detroit residents is a central goal of the legal system. For instance, as discussed last week in this blog, family courts will generally attempt to divide a married couple’s assets in an equitable manner when the couple gets a divorce.
This may not always be the case, however, such as when the parties themselves choose to come to some other arrangement. Some couples enter into separation agreements in which they might split the marital assets in a certain manner, which may not be the same way the court would have done if it had decided the matter. In other cases, parties may enter into prenuptial agreements before the marriage took place.
Michigan law allows parties to enter into prenuptial agreements. There are many different reasons why individuals may find it beneficial to enter these agreements.
For instance, a prenuptial agreement can be used to protect a party’s assets or protect the person from having to assume the debts of the other spouse. Because courts will divide property equitably, this can mean that a party who has a significantly larger share of the assets may lose those assets in the divorce to the other spouse, absent a prenuptial agreement. Likewise, because the parties’ debt is typically divided equitably, an individual may wish to protect himself or herself from being assigned a large amount of debt he or she did not personally incur.
Even if the prenuptial agreement calls for a roughly equal division of the assets and debt of the parties, it can also help those who wish to avoid long and costly disputes in a divorce. Divorce cases can be bitter and drag on for quite some time while parties argue over asset distribution and other issues, and the prenuptial agreement can take away the need for these protracted disputes.
Ultimately, the decision of whether to enter into a prenuptial agreement will be a personal one that will vary based on the circumstances. If individuals choose to sign a prenuptial agreement, they should ensure they understand the terms and the potential consequences of the agreement.
Source: Michigan Legislature, “557.28 Contract relating to property made in contemplation of marriage,” accessed on Jan. 2, 2016